Group PPO plans for employers

For an employer, a group PPO is not a separate market from other small-group or large-group coverage. It is a way the medical plan organizes access to care. The same group can often be quoted as a PPO, an HMO, an EPO or POS plan, or more than one of those, depending on what issuers offer in your state.

What it is

HealthCare.gov describes a PPO as a plan that contracts with medical providers to create a network of participating providers. You pay less if you use providers in that network. You can use doctors, hospitals, and other providers outside the network for an additional cost.

In employer coverage, that design is written into the group policy or the plan document. Employees usually receive a provider directory and a summary of benefits that states the in-network and out-of-network deductibles, copayments, and coinsurance. Preventive services required by the Affordable Care Act are covered in-network without cost sharing on non-grandfathered plans, including group PPOs.

A group PPO can be a fully insured small-group or large-group policy, or it can be the network a self-funded or level-funded plan uses to process claims. The funding method and the network design are separate choices.

Who it fits

A group PPO is often a fit when employees see a mix of providers, travel, or live in more than one area, and you want a plan that still pays a benefit if someone uses a doctor who is not in the directory. It is also a common design for companies with a multi-state workforce, because out-of-network coverage can matter when a local network is thin.

It is not the only fit. An HMO or EPO can be the better match when most care will be taken inside a defined network. We will look at where your people actually get care before we recommend a design.

How it works for employers

You sponsor the plan and contribute toward the premium or the plan cost in whatever amount you choose, subject to any issuer or state participation and contribution rules that apply. Employees enroll during the group's enrollment window, choose a PPO option if more than one medical plan is offered, and use the directory to find in-network care.

Claims for in-network care are generally billed at the plan's contracted allowed amount. Out-of-network claims are paid under the out-of-network schedule in the plan, and the employee may owe a larger share. Referral is not required to see a specialist in the usual PPO design HealthCare.gov describes, though some plans still encourage a primary-care relationship.

The No Surprises Act also applies to group health plans, including PPOs. CMS states that emergency services must be covered without prior authorization even when the facility or provider is out of network, that the enrollee's cost sharing for those emergency services cannot exceed the in-network amount, and that the out-of-network emergency provider cannot balance-bill the enrollee for the rest. Certain non-emergency services at in-network facilities are also protected. We will point you to the plan's No Surprises notices rather than invent a claims example.

If the plan is a non-grandfathered small-group policy, it must include essential health benefits and is issued at a metal tier. A PPO can also be built as an HSA-qualified HDHP when the deductible and out-of-pocket limits meet the IRS rules.

How it compares

Each network design is a legitimate fit for some groups.

• A PPO emphasizes in-network contract rates and still pays toward out-of-network care, usually without a referral.
• An HMO generally concentrates coverage on the HMO's contracted doctors and may use a primary-care physician and referrals.
• An EPO generally covers in-network care except in an emergency. A POS plan generally costs less in-network and requires a referral for specialists.

The comparison is about access, not about which design costs less. We will not describe a PPO, or any other network type, as cheaper in the abstract.

Named PPO-style networks we help employers compare include UnitedHealthcare Choice Plus and Florida Blue options. See how to check a group-plan network.