Medical Programs

Self Insured (ASO)
Self Insurance is an alternative to paying fixed monthly insurance premiums.
Increasingly self insured plans are offered by employers who directly assume the major cost of medical claims for their employees. Some self-insured plans bear the entire risk.

Other self-insured employers insure against large claims by purchasing stop-loss coverage. Many self-insured employers contract with insurance carriers or may use a third party administrator to handle claims processing, pay providers, and manage other functions related to the operation of medical plan.

An HMO plan is generally the least expensive approach as the patient has the lowest level of freedom with the provider care selection.

Indemnity (Traditional)
The Indemnity plan is a traditional fee-for-service plan that offers hospitalization and medical/surgical services with supplemental major medical coverage.  In the Indemnity plan members have the freedom to see specialist/doctor and facility of their choice.  The traditional plan totally eliminates the physician network scenario. One downside to this type of plan is that there is no negotiated fee schedule and claim forms will always have to be filed by either the doctor’s office or the patient.  This plan is also the most expensive.

Preferred Provider Organization (PPO) A PPO incorporates a network composed of participating hospitals, doctors and health care providers. There is no primary care physician (PCP) to coordinate care. A PPO offers patients the flexibility and freedom to seek care from any provider or facility of their choice in the network without a referral.  Network providers accept pre-negotiated fees from insurance carriers as payment for various services, with the patient responsible for copayments, deductible and/or coinsurance.

If the patient uses a non-network provider, he or she must satisfy the deductible and coinsurance requirements, and therefore assume a larger portion of the cost.  Usually the PPO networks are larger than the HMO or POS networks.

Some of the benefits of a PPO include but are not limited to: Members can see a specialist without a referral. Members can choose any In-Network doctor or hospital. Members do not have to choose a PCP.

Point of Service (POS)
Point of Service plans like an HMO requires a member to select a primary care physician (PCP).  Unlike the HMO the insured person may utilize services from an out-of-network provider of their choice.  Network providers accept pre-negotiated fees from insurance carriers as payment for various services, with patients being responsible for a copayment at the time the service is provided.  If the patient uses a non-network provider, he or she must satisfy the deductible and coinsurance requirements, and therefore assume a larger portion of the cost.

In an Open Access POS plan there are no referrals, therefore employees have direct access on a self-referred basis to all specialists within the network. 

Health Maintenance Organization (HMO)

An HMO is a managed care health plan that uses an established network of health care providers- doctors, specialists, hospitals, laboratories, etc. in which provider network participants have agreed with the insurance carrier to provide health care services for a negotiated price.

Generally, the only out-of-pocket expense for the patient is a co-payment made at the time the service is received.  In an HMO, the patient must choose a primary care physician (PCP) who provides most of the services and must authorize the use of other services, such as hospitalization, referrals to specialists, and testing.  An HMO plan is generally the least expensive approach as the patient has the lowest level of freedom with the least flexibility.

There are various other HMO plans that give members more flexibility such as Open Access plans where the referral process to see a specialist is eliminated.  Members are free to see any doctor or specialist and utilize any facility within the network without a referral from a primary care physician (PCP).

Consumer Driven Healthcare
CDH plans encourage employees to make more cost efficient healthcare decisions. This lowers the employer’s insurance cost while providing a reasonable level of coverage for more severe medical conditions. CDH plans make use of Health Savings Accounts (HSA) and Health Reimbursement Accounts (HRA.)

Health Savings Account (HSA) HSA’s are individually owned savings account, with similar features to an IRA or 401(k) plan.  The funds would be used to pay for the qualified medical expenses on a tax free basis.

An underlying High Deductible Health Plan is used in conjunction with an HSA. The employee controls the money and must contribute funds; the employer may or may not contribute funds into an HSA.  Any amount withdrawn to pay for non-qualified expenses are subject to taxation and/or penalty tax from the IRS.  Some HSA qualified expenses include but are not limited to:

• Medical and dental deductibles and copayments.
• Routine physical and gynecological exams.
• Eye exams, eyeglasses, contact lenses, corrective Lasik eye surgery.
• Professional services, Hospital services, Medical Treatments.
• Dental services, Laboratory Exams/Tests.
• Equipment and Supplies.
• Over the counter medications, with certain restrictions.

1.  Please visit our Health Savings Account FAQ.

2.  For a complete list of “qualified medical expenses” covered by an HSA, please visit the www.irs.gov. Enter “502” in the Search Forms and Publications field.

Health Reimbursement Account (HRA)
Unlike an HSA, an HRA is an employer owned account.  This account is normally used in conjunction with a high deductible plan and employees can be reimbursed for qualified medical expenses.  The employer contributes the money to the account and this provides more control for the employer who determines the services to be covered, sets the contribution level and retains control over any unused funds. 

Any amounts left over in an HRA account can be rolled over from year to year as long as the employer offers the program, participants remain enrolled, and they don't reach any established rollover maximums or account caps.

Prescription Drug Coverage (Rx)

Prescriptions are subject to co-payments and/or deductibles. Drug Cards can offer different co-pays for generic, preferred brand name, and non-preferred brand name drugs. Prescription Mail Order Programs provide a ninety day supply of maintenance drugs at lower total cost to the insured.