Group EPO and POS plans for employers

What it is

HealthCare.gov describes an EPO as a managed care plan where services are covered only if you go to doctors, specialists, or hospitals in the plan's network, except in an emergency.

It describes a POS plan as a plan in which you pay less if you use doctors, hospitals, and other providers that belong to the plan's network. POS plans also require you to get a referral from your primary care doctor in order to see a specialist.

In practice, an EPO often feels like a PPO in the sense that employees can usually see an in-network specialist without an HMO-style referral, and like an HMO in the sense that non-emergency coverage is concentrated in the contracted network. A POS plan often combines an in-network primary-care and referral structure with a benefit for some out-of-network care.

A non-grandfathered small-group EPO or POS plan must include essential health benefits and is issued at a metal tier. Either design can also be built as an HSA-qualified HDHP when the IRS deductible and out-of-pocket rules are met.

Who it fits

An EPO is often a fit when employees can receive most of their care inside a defined network and you want in-network specialist access without a referral, with emergency coverage if someone is treated outside the network. A POS plan is often a fit when you want an in-network medical home and a referral process, plus a benefit if someone uses an out-of-network provider.

A PPO is often the better match when out-of-network access is a regular need. An HMO is often the better match when the group is concentrated in one service area and is comfortable with the HMO's contracted doctors. We will look at directories and work locations, including for a multi-state workforce, before recommending a design.

How it works for employers

You sponsor the plan and contribute toward the premium or plan cost, subject to any issuer or state participation and contribution rules that apply. At enrollment, employees use the directory to confirm their doctors and hospitals are in network. In a POS plan they typically select a primary care physician who provides referrals. In an EPO they generally go directly to in-network specialists.

As with an HMO, it is worth checking the directory against the providers your people already use before you adopt the plan. Emergency care is covered when it meets the plan's emergency standard.

The No Surprises Act applies here as well. CMS states that emergency services must be covered without prior authorization even when the facility or provider is out of network, that cost sharing for those services cannot exceed the in-network amount, and that the enrollee cannot be balance-billed for the rest. That protection is especially relevant to an EPO, because non-emergency coverage is otherwise concentrated in the contracted network.

If both an EPO and a POS plan are offered in your market, we will put them on the same proposal, next to a PPO and an HMO when those are also available, so you can see the access rules side by side for the same census.

How it compares

Each network design is a legitimate fit for some groups.

• An EPO generally covers in-network care except in an emergency.
• A POS plan generally costs less in-network, uses a primary care referral for specialists, and pays toward some out-of-network care.
• A PPO pays a higher share in network and also pays toward out-of-network care, usually without a referral.
• An HMO generally covers care from the HMO's contracted doctors, except in an emergency, and may require employees to live or work in a service area.

The comparison is about access, referrals, and service area, not about which design costs less.