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Glossary of Medical Plan Terms Health Maintenance Organization (HMO) Point of Service (POS) Preferred Provider Organization (PPO) Indemnity Major Medical Traditional Copays Out of Pocket Maximum Deductible Co-Insurance

HEALTH MAINTENANCE ORGANIZATION HMO

• Each individual signs up with a primary care physician. In order to have coverage, all care must be directed by the primary care physician. Care will be provided within the provider network of the HMO. There is no coverage for treatment outside of the network.
• Can be very high level of benefits, but is most restrictive for employees.
• Usually least expensive due to restrictions within network.

POINT OF SERVICE POS

1. Each individual signs up with a primary care physician. In order to receive the highest level of benefits available, primary care physician must direct all services. However, plan does allow employee opportunity to receive coverage outside of network, but will have additional out of pocket costs, i.e. deductibles, co-insurance, etc.

2. Can be very high level of benefits within network with significant out of pocket costs when out of network.

3. In most cases, more expensive than HMO due to out of network benefits.

PREFERRED PROVIDER ORGANIZATION PPO

1. The level of benefits received is determined at time of service. If provider is in the particular network, in network (higher level) of benefits paid. If provider not in network, lower level of benefits paid. You do not elect a primary care physician at time of enrollment.

2. Can be very high level of benefits within network with significant out of pocket costs when out of network.

3. In most cases, more expensive than POS or HMO in that there is no primary care physician directing care and steering within network.

INDEMNITY MAJOR MEDICAL TRADITIONAL

1. No network of providers for employees to choose from to receive higher level of benefits. Benefits are at same levels throughout.

2. Most expensive in that there are no negotiated discounts with providers and insurance carriers. Have become less and less popular due to costs.

Copays

Amount patient pays to provider at time of service before benefits are paid, usually at 100%.

( i.e. $10 doctor copayment, $50 hospital emergency room copayment, $10 prescription drug copayment; THESE ARE NOT SUBJECT TO DEDUCTIBLES. MOST OFTEN, DO NOT COUNT TOWARD OUT OF POCKET MAXIMUMS)

Out of Pocket Maximum

Maximum amount an individual or family will have as out of pocket expenses in calendar year; most often, does not include copayments

Deductible

Amount an individual or family must incur during calendar year before insurance carrier begins payments; does not apply to copayments listed above

Co-Insurance

Percentage amount employee pays, after the deductible, up to certain maximum;

(i.e. 90\10 employee pays 10%, 80\20 employee pays 20%, 70\30 employee pays 30% etc.)

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