Group Health Plans: Understanding Provider Networks & Plan Types

A good insurance agent can help guide you when choosing the right employer-sponsored health plan, but it’s helpful to have an understanding of your options going in. On this page, you’ll find information about the major types of managed care health coverage options available, including PPOs, HMOs, EPOs and POS plans. These acronyms get thrown around rather liberally in the health insurance world and it’s important to understand the differences and similarities between them.

 

Preferred Provider Organizations (PPO) – A PPO insurance plan allows customers to choose between a provider within the network or outside of it. Since these plans are contracted with the in-network providers, the greatest savings are realized by visiting a health care provider from within the network. Out of network services may still be covered in some instances, but the out-of-pocket cost for those services will be higher.

 

PPO plans are good option if you want to offer a combination of savings and flexibility to your employees and are especially good for those who want to choose their own health care providers or want to see a specialist without a referral.

 

For a simple breakdown of the difference between an HMO, PPO and EPO plan, see this resource from the California Department of Insurance.

 

Health Maintenance Organizations (HMO) – A health maintenance organization is a type of health coverage plan that partners with a network of doctors. In order to get health care services covered under an HMO, employees must go to a medical provider from within the network, with the exception of urgent care and emergency services.

 

One aspect of an HMO that is different from a PPO is that patients must choose a primary care physician (PCP) with an HMO. The PCP becomes the patient’s main health care provider and must write a referral in order for the patient to see a specialist. With a PPO, employees will not have to choose a primary care doctor and can see a specialist without a referral in most cases.

 

Exclusive Provider Organizations (EPO) – An EPO combines some of the best elements from a PPO and HMO. As with a PPO, insured parties don’t have to choose a primary care physician and don’t typically need a referral to see a specialist. Like an HMO, an Exclusive Provider Organization plan means that services are limited to a network of doctors and medical professionals (again, emergency services are an exception). Going outside the network of approved providers with an EPO means that you’ll be responsible for the full cost of treatment.

 

Point of Service Plans – (POS) – A point of service plan combines aspects of both an HMO and PPO as well. Members of a POS plan do have to choose a primary care doctor, who can then write referrals if a patient needs to see a specialist or a health care professional outside of the network. As with a PPO plan, out-of-network services are covered to a lesser extent than receiving health care from a doctor that’s part of the network.

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