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HMO - Health Maintenance Organization |
A medical plan providing healthcare which is coordinated through a primary care physician. This pre-selected primary care physician can be an independent practitioner or belong to a medical group or physician association and coordinates any medical care for the HMO member and is responsible for referring the member to a healthcare specialist if needed.
This type of health plan provides the lowest out of pocket expenses for its members compared to other types of medical plans. An HMO plan can be employer sponsored (a group plan) or set up on an individual or family basis. |
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PPO - Preferred Provider Organization |
A medical plan that is designed to give its members incentives to use health care providers designated as "preferred providers," that provide services at discounted rates but also gives members substantial coverage for medical services received from any health care providers. A PPO plan primarily differs from an HMO plan in that a PPO does not require its members to select a Primary Care Physician and it allows its members to see any healthcare provider without a referral from a PCP. A PPO plan can be employer sponsored or set up on an individual or family basis. |
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POS - Point of Service |
A medical plan that provides different levels of cost for medical services. These levels are usually a combination of HMO type benefits coupled with PPO type benefits. At the point when a POS member needs medical care, the member chooses which level of service they wish to access. It could be the HMO level with low out of pocket expenses with medical care and referrals coordinated through a
primary care physician. It could also be the PPO level with the freedom to self-refer to any healthcare provider at an increased cost of the total medical bill. A POS Plan can be employer-sponsored or set up on an individual or family basis. |
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Self-Funded & Partially Self-Funded Medical Plan (EPO, ISO, etc.) |
A medical plan that utilizes company-subsidized funding for payment of medical claims up to specific amount per employee and also up to an total aggragate amount per company. Amounts above these "caps" can be insured by special reinsurance carriers. When this type of plan is designed correctly, the employer's potential liability is "capped" at some predetermined amount per year while providing potentially larger savings for the employer in years where claims are low. In addition to cost savings, these plans can provide more flexibility in
design. This type of plan is best suited for an employer with more than a hundred employees. |
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