HMO plans provide predictable cost-sharing and simplicity for participants. Members pay a monthly premium and a small copay for things like doctor visits, medical treatment and preventative care, from providers in a more selective network than other plans. The member’s Primary Care Physician (PCP) is the ‘hub’ for his/her medical care. The PCP can refer the member to a specialist when those services are needed.

PPO plans provide your employees with a larger choice of providers than HMOs, and the premiums are similar. Members do not need a PCP, though many members select one. The PPO plan does not require members to have a referral to receive services from a specialist. There is usually a deductible – a certain amount a member pays out of pocket before insurance pays for services. After the deductible is met, the member will either pay a copay However, the out-of-pocket cost is generally higher and a bit more complicated. PPOS will allow participants to go outside of the provider network without a referral from a primary care physician.

A POS can best be described as a hybrid of an HMO and PPO. It requires a participant to select a PCP, like an HMO. However, like a PPO, participants may choose to receive services outside of the provider network but will have to pay most of the costs without a referral from the PCP.

With certain health plans known as High Deductible Health Plans, members can open and maintain a Health Savings Account (HSA). An HSA allows members tosave pre-tax dollars to pay for qualified medical expenses. As the employer, you can choose to contribute to the member’s account, as an additional incentive to use this kind of plan. Unlike other savings options, the HSA is connected to the member, not the employer or the health plan. This means that the member can roll over their savings year over year, and if the member changes jobs, the the account – and the money in the account – travels with him. Other savings options are available for your employees, and you can learn more about these on our recent blog post about medical savings options.