Medical & Prescription Benefits

Health Maintenance Organization (HMO):
Health Maintenance Organizations (HMO) provide a low out of pocket costs to employees while offering comprehensive coverage.  Referrals for specialty care are usually required in an HMO Plan.

Employees must select a Primary Care Physician (PCP) to manage all their care and treatment unless the HMO is an open access one where referrals are not needed.

Employees are restricted to the In-Network selection of providers.

Point of Service (POS) Plans:
Point of Service (POS) Plans allow employees to choose their own doctors when utilizing the out of network benefits

Carriers offer POS provider networks giving members the advantage of seeking In-Network care to minimize their out of pocket costs and maximize their benefits. 

To use In-Network benefits, employees choose a Primary Care Physician (PCP) to manage their care and coordinate their specialty needs unless the POS is an open access one where referrals to specialists are not needed.

Members have the option to seek Out of Network care from non-participating providers, which has a higher out of pocket costs.

Preferred Provider Organizations PPO Plans:
Preferred Provider Organizations (PPO) allow employees to choose their own doctors when utilizing the out of network benefits. 

Carriers offer PPO provider networks giving members the advantage of seeking In-Network care to minimize their out of pocket costs and maximize their benefits. No referrals for specialty care are required in a PPO plan.

Members have the option to seek Out of Network care from non-participating providers, which has a higher out of pocket costs.

Consumer Driven Health Care Plan (aka High Deductible Health Care Plan):
Consumer Driven Health Care Plans (CDP) provide low cost premiums and carry high deductibles and out of pocket costs.

In a CDP plan, no benefits are paid out by a carrier for any services until a member satisfies the deductible.  The only exception to this rule is for Preventive Care.

These plans can be offered using PPO, POS, or HMO styled plans as described herein.

There are numerous ways an employee or employer can fund these high deductibles and maximum out of pocket expense limits.  Examples are below:

Health Savings Account (HSA):
A Health Savings Account (HSA) is a bank account that can be funded with pre-tax dollars and used to pay for eligible medical expenses incurred in a Consumer Driven Health Care Plan (CDP).  This account can be funded by employees or their employer, or both. 

Some expenses the HSA can be used for are deductibles, coinsurance, and in some cases, health care premiums.

The account is owned by the employee and is portable, even if the employee leaves their job.

Health Reimbursement Account (HRA):
A Health Reimbursement Account (HRA) is an Employer funded account used to pay for deductible and coinsurance out of pocket costs for an employee enrolled in a Consumer Driven Health Care Plan (CDP).

These accounts are not portable, and will only be funded based on actual medical claim dollars spent.

Flexible Spending Account (FSA):
A Flexible Spending Account (FSA) is tax advantage plan that allows an employee to pay for medical and dependent care expenses on a pre-tax basis.

An employee sets aside a portion of their pre-tax earnings into an account and draws on those funds to cover eligible medical expenses (copays, deductibles, coinsurance, non-covered items, etc.).

Employees must use caution when deciding how much money to elect each year, as any unused dollars are forfeited.

Prescription Drug Plans can be offered as part of a medical plan or on a stand alone basis.

Prescription Drug Copay Plans:
Provides comprehensive prescription drug coverage when using a participating pharmacy. 

Copay plans can be offered with many different plan designs:

• Single Tier Copay – member pays a flat copay for prescription drugs
• Two Tier Copay – member pays a lower copay for using generic drugs and a higher copay for brand name drugs
• Three Tier Copay – member pays the lowest copay for using generic drugs, a higher copay for using preferred brand drugs, and the highest copay for using non-preferred brand drugs.

Defined-Contribution Plans/Private Exchange Plans:
Defined-Contribution plans are a way to offer employees a broad choice of health plans while containing overall costs.

Employers offer a competitive health benefit with set, predictable costs. Employees choose from a menu of plan options to meet their individual needs.

The employer decides how much to spend on health benefits for employees (the defined contribution) and select a suite of health plans to offer (including ancillary options like dental and vision care if desired).

The employee uses an online benefit ‘shopping tool’ to review and select a plan option. They “spend” their defined contribution amount on a health plan and any ancillary benefits. Any cost above the defined contribution is identified as the employee’s responsibility.