Why choose an HMO Plan?
Published on April 17, 2017
Small business owners strive to find competitive health care solutions for employees – particularly ones that improve their benefits plans. A good place to start that journey is by researching the established health care plans available for purchase. There are different kinds of plans to choose from. For example, what is an HMO plan and what are the benefits for a small business and its employee?
What is an HMO Plan?
A health maintenance organization, or HMO, plan is a managed care health insurance plan that generally requires small business employees to make specific choices when it comes to health care providers. The HMO structure works towards coordinated care. What this means for members is that all their care is typically coordinated through a primary care physician. While some other types of insurance programs don’t require you to pick one doctor to coordinate your care, an HMO is built around the model of a primary care physician working within a specific network of medical providers.
What Coordinated Care Means for Small Businesses
It is the coordinated care framework that really makes the HMO plan stand out for small businesses. When they sign up for insurance, your employees will pick a primary care physician from a list provided by the insurance company. That doctor takes charge of the employee’s health care. Everything the employee needs generally goes through that one doctor. For example:
- If your employee gets a cold, they see the primary care physician first.
- If that cold turns out to be related to a sinus infection, the primary care doctor may send that person to see an ENT specialist within the insurance company’s network for a consultation.
- If that cold turns into pneumonia, the employee might need advanced care like a respiratory therapist. The primary care doctor would provide a referral for that care.
With an HMO plan, members are generally not covered if they see specialists without a referral from their primary care physician, though exceptions are typically made in case of emergency care.
Staying In Network with an HMO Plan
HMOs usually require your employees to receive their medical care “in-network”. This means choosing a primary care doctor and hospital that has a partnership with the insurance provider. While some insurance plans (PPO plans, for example) often allow you to go out of network if you are willing to pay more toward covered care, HMOs don’t usually offer that service. If you receive non-emergency medical care outside of the network, you may be required to pay the full bill yourself.
It is often easy to stay in-network with an HMO plan, however, because of the primary care system. A primary care doctor serves as a gatekeeper that provides referrals that help keep your employees in the network with little fuss.
Key Benefits of an HMO Plan
With an HMO plan, your employees can expect:
- Less fuss – While HMOs are not known for their flexibility, they can be simpler to work with because everything is typically more coordinated than some other types of systems. There is usually less paperwork, as well, because you often do not need to file claims.
- Lower premiums – HMOs generally come with lower premiums and less out of pocket expense compared to plans that let you go outside of a specific network of service providers.
- Preventative care – HMOs tend to have incentives to focus on preventive services like regular check-ups and screenings.
An HMO plan is a practical choice for the small business looking to keep costs down for employees. Some HMO plans offer low or no deductible programs. Check with a licensed insurance broker to find out if an HMO is the right choice for your small business.