In a few short weeks, October will be upon us and with it, the Open Enrollment season for employee benefits. In addition to the alphabet soup of health insurance coverage options, there are new provisions of the ACA to consider. Selecting a plan from these options has become increasingly difficult as the provisions seem to overlap.
Most employees expect that these plan abbreviations will signify the level of coverage, access to providers outside of a plan’s network, or cost sharing, among other provisions. Unfortunately, there are no industry wide definitions that correspond to these plan types and, as is the case with most health insurance plans, state standards can vary. Depending on the state and the carrier, some of these plans look alike. Generally:
Health maintenance organizations (HMOs) cover only care provided by the plan’s network of providers. Often an HMO will require that a participant get a referral from a primary care doctor in order to see a specialist.
Preferred provider organizations (PPOs) cover care provided both inside and outside the plan provider’s network. Participants typically pay a higher percentage of the cost for out-of-network care.
Exclusive provider organizations (EPOs) operate like HMOs. Most of the time, they don’t cover care outside of the provider network. Unlike HMOs, however, participants may not need a referral to see a specialist.
Point of Service (POS) can vary, but they are usually a hybrid HMO/PPO. Participants may need a referral to see a specialist, however, they may use out-of-network providers with higher cost sharing.
Although your health insurers may identify plans with these names in the plan summaries, it is critical that you compare the underlying provisions. If you are offered more than one PPO, the networks may be entirely different. The cost sharing may also be higher. It is also possible for an HMO to offer an out-of-network option which makes them look like PPOs. EPOs, although the name may indicate otherwise, most often don’t offer out-of-network benefits and can be confusing.
Before selecting a plan for 2015, consider the following:
Is there out of network coverage and what is the cost sharing arrangement?
Do participants need a referral to see a specialist?
Does out-of-network spending accrue toward the participant’s out-of-pocket maximum?
Also, note that employer sponsored plans (unless grandfathered) will begin to offer Essential Benefits which will include preventative services. Keep in mind that although these services are most often without cost sharing, providers will likely be limited.
Still unclear? Be sure to study plan coverage summaries carefully and ask questions.
For additional information, contact EAB HealthWorks.