Managed Care Plans

PPO - A preferred provider organization (PPO) is a network of health care providers that have contracted with the network management organization and have agreed to provide services for certain price and delivery parameters. These negotiated rates are intended to give consumers the buying power of larger groups. Unlike HMOs, PPOs allow plan participants to go outside the network and still receive coverage, although the benefits will be more limited out-of-network.

HMO - A health maintenance organization (HMO) is a managed care organization that consists of a management organization and of medical providers that have agreed to provide care for members on pre-arranged financial terms. HMOs typically will be the lower cost option for the employees and the employer. This is because the HMO typically restricts the doctors a patient can see to those in the provider network.

POS - A point of service plan (POS) is slightly more comprehensive than an HMO plan. With a POS plan, health plan members still have to see a primary care physician to coordinate their care and are dependent upon them for referrals. Unlike an HMO, health plan members can seek care outside of the plan’s network.

Consumer Driven Plans

High-Deductible Health Plan - As an alternative to traditional self-funded and managed care plans, more companies are considering implementing a high deductible health plan, known as an HDHP, alongside an HSA or HRA. Its purpose is to lower health care premiums by pushing plan members to analyse their health care decisions. An HSA or HRA would be used with the HDHP to help pay for the deductible costs.

Health Reimbursement Arrangement - A HRA is when an employer agrees to provide reimbursement for certain employee medical expenses. This process has always enjoyed a tax favored status as employer payments for reimbursement of IRS qualified medical expenses are deductible to the employer and not considered taxable income to the employee.

Health Savings Account - A Health Savings Account (HSA) is one of the newest and best ways for many to set aside money for inevitable health care expenses. There are many benefits for the employers and the employees when they use HSAs. They create tax-free money for un-reimbursed medical expenses and also earn tax-deferred growth. HSAs are also excellent ways to create supplemental retirement income.

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