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HMO, PPO, POS: What networks should you offer?

Choose networks that match your employees' needs.

When configuring your benefits strategy, one of the most important things to consider is what networks you’ll provide to your employees. Health plans typically offer several different networks to choose from, and you can choose one or several based on the needs of your employee population.

Generally, the differences between health plan networks include the number of health care providers covered under the plan, how much your employees will pay for care, and availability of out-of-network benefits.

By knowing the basics of different health care networks, you’ll be able to guide your employees toward high-quality care at the lowest possible cost to achieve better overall health — which saves them (and you) money in the long-run.

Network type #1: HMO (State-based)

Health maintenance organizations — or HMOs, for short — give your employees access to doctors and hospitals in a specific area and only cover out-of-network care in emergencies. Your employees may need to choose a personal doctor to help manage their care throughout the network and receive preventive care at no cost to them. Because HMOs are more local, they improve care coordination. They're also less expensive for you and your employees because health plans are able to negotiate lower health care costs with providers in a single service area. An HMO is ideal if your employees work at one or multiple locations within a single state.

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Sate-based: Wellmark BlueSM HMO Network, Coverage in all 99 counties plus bordering counties in surrounding states, 100 percent of hospitals, 97 percent of doctors.

Source: Consortium Network Compare Findings.

Network type #2: POS (out-of-network)

Point-of-service (POS) networks are similar to state-based HMOs, but provide a cost-share option if your employees want access to national and worldwide benefits. POS networks offer flexibility for your employees by providing in-network coverage from local doctors and hospitals, while allowing out-of-network coverage from participating doctors at a higher cost share. Keep in mind that for any out-of-network services, your employees will have to do some of the legwork: Fill out any paperwork, send in bills for provider payment, and keep track of service receipts. A POS network is a moderately priced option for your business, as most care is provided within the network and any out-of-network care comes with higher out-of-pocket costs for your employees.

Wellmark will be offering a new POS network, Wellmark Blue POSSM, for Iowa small group employers in 2020. A POS network may be right for your employees if they live in one area, but may need out-of-network care when they're traveling.

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Network type: state-based with national access

New in 2020

Wellmark Blue POSSM coverage in all 99 counties plus bordering counties in surrounding states.

100 percent of hospitals in Iowa, 97 percent of doctors in Iowa

96 percent of hospitals nationwide, 96 percent of doctors nationwide*

*Nationwide providers are covered at a higher cost-share for your employees

Source: Consortium Network Compare Findings.

Network type #3: PPO (national)

A preferred provider organization (PPO) network offers the most flexibility for your employees when they seek care. They will be able to see any doctor or go to any hospital nationwide as long as it’s in-network. Costs will be lower for in-network services, but PPO plans also pay a portion of out-of-network costs. Compared to other options, PPO plans are the most expensive. But, if your employees live, work or spend long periods out-of-state, and are more likely to need medical care when they’re traveling, a PPO network may be the best fit.

The Wellmark Blue PPOSM Network is available to groups in Iowa and South Dakota:

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Network type: national

Wellmark Blue PPOSM

100 percent of hospitals in Iowa, 97 percent of doctors in Iowa

100 percent of hospitals in South Dakota, 99 percent of doctors in South Dakota

96 percent of hospitals nationwide, 96 percent of doctors nationwide

Source: Consortium Network Compare Findings

Help answer employee questions

If you plan to offer access to more than one network in your benefits package, your employees will likely have questions about which network is the best fit for their needs. Download this free guide Opens in a new window to help your employees choose between an HMO, POS, or PPO network — just by answering a few simple questions! You can also direct them to this BlueSM online Opens in a new window article for more information.

Are you prepping for open enrollment? Start the conversation with your authorized Wellmark Blue Cross and Blue Shield account representative to make your workplace's open enrollment easy.