A Simple Plan:
PPO, HMO, EPO, and POS plans: Which is the Most Suitable Plan for Your Employees?
In most states, it is the employer’s obligation to provide medical insurance to their employees. The medical care plan you offer your employees should meet the needs of the employee. Employees who would love to have a primary doctor manage their health need HMO while those who visit several specialists but they would rather not go through their primary care doctors will take PPO or POS. PPO, HMO, EPO and POS plans have been discussed in length below.
Fee-for-Service (FFS) policy or an indemnity plan allow the employee to choose the doctor and hospital to get medical care. The insured is reimbursed by the insurer after the insured has paid the medical bills. The policy is more affordable when it is under the employer’s plan unlike when the employee takes privately. You will pay co-payments and deductibles, but the amount will be determined by the premium rates of your state and the plan coverage.
Preferred Provider Organization (PPO) policy does not limit you to the doctors and hospitals that are in the PPO network when you need medical services. However, you will pay more when you get treated by doctors and hospitals that are outside the PPO network compared to those who are within the network. Although the PPO plan pays a percentage of the medical expenses, the percentage it pays is less than the percentage of the bill that the insured will pay from his or her pockets. PPO also charges deductibles and co-payments. The rate of deductibles in PPO is higher than in HMO.
The most affordable health care plan for employees is the Health Maintenance Organization (HMO) policy because it has the lowest premiums, co-payments, and deductibles. The insured is not allowed to seek medical services from doctors and hospitals that are outside the HMO network. The insured will be denied compensation when he or she gets medical services from doctors and hospitals that are outside the HMO network. HMO plan has an exemption that it covers medical bills for emergency medical services that the insured received if he or she was far away from the immediate doctor and hospital that is in the HMO network when the emergency occurred.
Point of Service (POS) plan has features of HMO, and PPO. Under POS, one can be treated by doctors and hospitals that are within and outside the POS network, but when the services are offered by doctors and hospitals that are outside the POS network, the cost is higher. HMO premiums are lower than POS premiums, but PPO premiums are higher than the POS premiums. POS does not charge deductibles for in-network services. POS policyholder is charged in-network co-payments of around $10 to $25 per appointment.
The Exclusive Provider Organization (EPO) plan policyholder is restricted to doctors and hospitals that are in the EPO network because this policy has no out-of-network benefits. An employee who has long term health conditions that need a specific doctor and hospital to manage his or her health should be offered an EPO plan.