EHBS Types of Health Plans and Definitions
The survey will ask about the health plans and benefits your firm offers. There are several types of health plans that employers may offer their employees. Below are definitions of different health plans and benefits and other common terms associated with these plans.
Health Maintenance Organization (HMO) – with an HMO, a person must receive their care from an HMO physician; otherwise, the expense is not covered. The survey defines an HMO as a plan that does not cover nonemergency out-of-network services.
Exclusive Provider Organization (EPO) – with an EPO, employees must receive their non-emergency care only from physicians and hospitals who have a contract with the health plan. Unlike HMOs, a referral may not be needed to visit a specialist.
Preferred Provider Organization (PPO) – with a PPO, employees have lower deductibles and copayments if they use physicians or hospitals in the preferred provider network. The survey defines PPOs as plans that do not require a primary care gatekeeper to screen for specialist and hospitalist visits.
Point of Service (POS) – POS plans as those that have lower cost sharing for in-network provider services, but do require a primary care gatekeeper to screen for specialist and hospital visits.
Conventional or indemnity health plan – under conventional or indemnity health insurance, there are no preferred provider networks, and a person faces the same cost-sharing regardless of which provider they choose.
High Deductible Health Plan (HDHP) – High deductible health plans are defined in the survey as plans with an annual single deductible of at least $1,000 and a family deductible of at least $2,000 for in-network or preferred providers. HDHPs are often paired with a savings option such as an HRA or HSA. HDHPs paired with savings options are treated as a distinct plan type even if the plan would otherwise be considered a PPO, HMO, POS plan, or indemnity plan.
Health Reimbursement Arrangement (HRA) – HRAs are medical care reimbursement plans established by employers that can be used by employees to pay for health care. HRAs are funded solely by employers. They are often offered along with high-deductible health plans.
Health Savings Account (HSA) – HSAs are savings accounts created by individuals to pay for health care. An individual may establish an HSA if he or she is covered by a “qualified health plan”: a plan with a high deductible (at least $1,600 for single coverage and $3,200 for family coverage in 2024 that also meets other requirements. Both employers and employees can contribute to an HSA, up to the statutory cap of $4,150 for single coverage and $8,300 for family coverage in 2024.
Primary care gatekeeper – a physician who must approve visits to specialists and hospitals.
Preferred provider network – the health plan’s list of doctors and hospitals that should be used for a member to have the lowest cost-sharing.
Individual Coverage Health Reimbursement Arrangement (ICHRA) – arrangement that allows employers to reimburse employees tax-free for their individual health insurance.