The keystone for most benefit plans is medical insurance. Medical insurance comes in three different forms:
PPO Preferred Provider Organization. Employees have the option of using doctors, hospitals, labs and other facilities in the network or outside the network. They receive a higher benefit if they use providers in the network. Employees can refer themselves to a specialist of their choosing.
POS Point Of Service Employees have the option of using doctors, hospitals, labs and other facilities in the network or outside the network. Employees general receive HMO style benefits if they access care from the network of providers. If they access care outside the network, they receive a lower benefit. Depending on the insurance company, employees may have to get a referral from a Primary Care Physician to be seen by a specialist.
HMO Health Maintenance Organization. Employees receive care from a network of doctors, hospitals, labs and other facilities. If employees access care outside the network of providers, they generally receive no benefit. Some HMOs require a referral from a Primary Care Physician to be seen by a specialist.
Medical plans may contain the following elements:
Deductible The deductible applies to the first dollars of medical expense paid in a calendar year by an employee. Co-pays do NOT apply to the deductible.
Co-pay A medical plan may have a co-pay for the following medical expenses:
- Doctor’s visit
- Inpatient and/or out-patient hospital care
- Pharmacy expenses
Employees pay the co-pay at the time of service. The insurance company pays some or all of the balance of the expense. Co-pays do NOT apply to the deductible.
Co-insurance Once the deductible has been paid by the employee, the insurance company pays a portion of the balance of the medical expenses. Co-insurance levels may be different for in-network expenses and out-of-network expenses. The co-insurance is applied to the Stop-loss.
Stop-loss The amount of medical expense to which the co-insurance is applied is known as the Stop-loss. Medical expenses that exceed the Stop-loss are paid in full by the insurance company.
Out-of-pocket The out-of-pocket amount is calculated by applying the co-insurance to the Stop-loss.
Primary Care Physician often referred to as “Gatekeepers”, over see all your care and coordinate referrals to specialists when necessary. HMO’s are your only choice for comprehensive maternity coverage.
Medical insurance companies require that an employer pay between 75% and 50% of the employee cost and 0% of the dependent cost. They also require that at least 75% of the eligible employees enroll in the medical plan.