Overview of Coverage

Health insurance policies typically cover the treatment of illness, disease, and accidents, including doctors' office visits, prescriptions, diagnostics (e.g. x-rays, blood tests), hospitalization, surgery, and emergency services. Maternity care is also covered by most policies. Preventive care may or may not be covered in a basic policy, depending on the type of plan.

Optional plan provisions can often be added to the policy, such as coverage for routine vision and dental care, mental health care, or chiropractor services.

Most policies do not cover elective cosmetic surgery, experimental procedures, or work-related injuries covered by workers' compensation insurance.


An HMO (Health Maintenance Organization) is a type of managed care plan that typically works in the following manner:

The HMO consists of a network of health care providers, which means these providers receive set monthly payments for each plan member (such as your employees), regardless of how frequently their services are used.

Your employees are required to choose a Primary Care Physician (PCP) to perform many of their health care services and refer them to specialists when necessary. They are only referred to specialists within the HMO's network, except in special circumstances.

Your employees are only responsible for a small co-payment (e.g. $10) for visits to their PCP or specialists to whom they've been referred. In most cases, no deductible is required.

If your employees visit another physician without a referral from their PCP, they won? receive any coverage, except in certain emergencies.


In general, POS (Point of Service) plans have similar rules to HMOs, though they tend to be more flexible in offering referrals outside of the network and providing some coverage for self-referrals. Thus, if your employees visit their Primary Care Provider (PCP) and receive referrals to specialists when necessary, their costs and coverage are likely to be similar to an HMO. However, if they refer themselves to a specialist or doctor outside of the plan? network, they may need to pay a deductible and coinsurance (a portion of the medical fees).

Example: Under a POS plan, your employees may only be responsible for a $20 co-payment if they visit their PCP or a referred specialist inside or outside of the network. However, they may be responsible for a deductible and 20% coinsurance if they refer themselves to a network physician or 30% coinsurance if they visit an out-of-network physician.


PPOs (Preferred Provider Organizations) typically consist of a network of providers that have agreed to provide services to plan members at discounted rates. These are generally considered the most flexible managed care plans because they usually don't require members to choose a Primary Care Physician (PCP). This means your employees receive the same coverage for any provider within the network, including specialists. They can also choose a provider outside of the network and receive coverage, though the out-of-pocket expenses will likely be higher, as demonstrated below.

Example: Under a PPO plan, your employees may be responsible for 20% coinsurance (based on discounted rates) and $150 deductible if they visit any physician within the network, or 30% coinsurance (based on non-discounted rates) and $300 deductible if they visit a physician who is not in the network.

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