Typically require employees to access care within its referral network of healthcare professionals, hospitals and labs for tests. Coverage for out-of-network services are ineligible. However, there are exceptions made for out-of-area emergencies.
HMOs place a major emphasis on preventative care as they encourage routine wellness visits with primary care providers.
Offer more flexibility than HMOs as they provide in-network and out-of-network benefits. While in-network services mirror HMOs, in that the primary care provider coordinates employee's care via plan specialists, hospitals and treatment centers, out-of-network benefits give patients the freedom of provider selection. In short, in-network care is less expensive than going outside the provider network as employees will experience an increase in out-of-pocket expenses.
Premiums tend to be higher for PPO Plans, however increased cost may be offset by making adjustments to plan designs and/or deductibles.
Are becoming more popular as many employer groups (with over 50 employees) are gravitating to cost-containment strategies. With a self-funded plan, the employer (not the insurance carrier) is responsible for paying the medical claims and operating the health insurance plans with the help of vendors, who are known as third-party administrators (TPA). Basically, the employer chooses a self-insured health plan as it can result in significant savings on premiums.
In most cases, the employer is able to retain the plan design and provider network of their major medical plan. The major difference is that, instead of paying fixed premiums to an insurance carrier, the employer is escrowing money through the TPA. So, the employer is only paying for medical services rendered. If the employer's medical claims exceed actuarial projections, a reinsurer (stop loss carrier) will pay the deficit. And, if the claims experience is less than projected losses, the employer may be entitled to a rebate, minus any outstanding expenditures.
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