The Employee’s Guide to Health Plans

Definition
Primary Care Physician (PCP)
Network of Providers
Referrals
Deductibles, Coinsurance, Copayments, Claim Forms
Fee-for-Service (FFS)
Reimburses health care providers for services. Tends to be the most costly for employers. Not required; employees can choose any provider. No network; can choose any provider. Not required Deductibles & coinsurance may be required. Claim forms may be used.
Health Maintenance Organization (HMO)
Covers services performed by providers in a network & tends to be a low-cost,  restrictive system. Required; the PCP coordinates all medical care and must make referrals to specialty providers for employees. Services by out-of-network providers are not typically covered under the plan. Required; PCP coordinates all medical care May require employee cost-sharing through deductibles, co-pays or coinsurance.
Preferred Provider Organization (PPO)
A network of providers & allows the use of providers outside of the plan’s network, more flexible than an HMO, but more expensive. Not typically required. Some PPO vendors offer incentives for employees to visit a PCP to coordinate medical care. Network & the plan allows for use of out-of-network providers with greater cost-sharing by employees. May not be required Coinsurance, deductibles & co-pays are the standard; usually, lower when using in-network providers.
High Deductible Health Plan (HDHP)
Usually paired with a tax-advantaged account to pay for medical expenses. Common options are HRAs & HSAs savings accounts. Not required but there are incentives for using providers that are reasonably priced. Not required but are offered to bring savings to employers & employees. Not required Typically low or no coinsurance after the deductible is met. Deductibles are substantially higher than other plans.
Health Savings Account (HSA)
A tax-advantaged account used to pay for qualified medical expenses. An HSA must be used with an HDHP. Funds remaining in the account at the end of the year are rolled over. Not Required. May be used to pay for qualified medical expense. Not Required. May be used to pay for qualified medical expense. Not required, may be used to pay for any qualified medical expense. N/A
Point-of-Service Plan (POS)
Combines elements of an HMO & PPO. When employees need health care, they can choose how it will be received. If an employee initially sees a PCP & stays in-network, then more substantial benefits will be received versus not seeing a PCP first. Required when accessing HMO-like benefits of the plan. Not required when accessing PPO-like benefits of the plan. Employees must stay in-network Required for the HMO portion of the plan; not required for the PPO portion. No deductibles; minimal coinsurance or co-pays for HMO portion. Deductibles, coinsurance & co-pays are typical for the PPO portion—lower for in-network providers.
Health Reimbursement Arrangement (HRA)
Allows employers to set aside an amount of funds to reimburse participating employees for medical expenses & often combined with another health plan. May not be required. Subject to the paired health plan and employer. May not be required. Subject to the paired health plan & employer. May not be required. Subject to the paired health plan & employer. N/A
Health Flex Spending Account (Health FSA)
Allows employees to contribute funds that are not subject to payroll tax. Any unused funds are lost after a grace period. Employers have the option of allowing employees to carry over up to $500 of unused funds from one year to the next. May not be required. Subject to the paired health plan. May not be required. Subject to the paired health plan. May not be required. Subject to the paired health plan. N/A
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