Common types of health insurance plans

 

Your first step in deciding what health insurance plan to offer at your organization is knowing the different types that are out there.
The types of health insurance plans you should know are:

• Preferred provider organization (PPO) plan

• Health maintenance organization (HMO) plan

• Point of service (POS) plan

• Exclusive provider organization (EPO)

• Health savings account (HSA)-qualified plan

• Indemnity plans

Alternative health benefits, such as health reimbursement arrangements (HRAs) and employee stipends , are also available for organizations of all sizes.
The type of health plan that’s best for you depends on what you and/or your employees want, how much you're willing to spend, and what medical expenses you want to be covered. In the following sections, we'll briefly cover each type of plan.
Preferred provider organization (PPO) plans
The preferred provider organization (PPO) plan is the most common insurance coverage plan offered by employers. According to the Kaiser Family Foundation (KFF)1, 49% of surveyed individuals with an employer-sponsored plan have a PPO.
With a PPO plan, employees are encouraged to use a network of preferred doctors and hospitals to care for their medical needs at a negotiated or discounted rate. Employees generally aren't required to select a primary care provider (PCP) and have the choice to see any doctors within their network.
Employees have an annual deductible they must meet before the health insurance company begins covering their medical bills. They may also have a copayment for particular services or a co-insurance where they're responsible for a percentage of the total charges. Services outside of the network typically result in higher out-of-pocket costs.
A PPO plan is best for your organization if your employees:

• Want the freedom to choose any primary care doctor and healthcare facility within your insurance company's network of doctors

• Want the option to have some out-of-network costs covered

• Want to be able to see a specialist without a referral from a PCP