Managing Your Money

Open enrollment: EPO, HMO, or PPO? What's the difference?

This month employees across the country are going to start getting big'ol packets of information to narrow down a choice for health care. The decisions can be tough. The wrong checkbox could lead to you paying a lot more money in each paycheck for unnecessary benefits, or worse it could lead to you having to pay a lot during an emergency. The first question you have to ask during open enrollment: What type of plan to get?

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Most plans fall into three types -- EPO, HMO, and PPO. The differences between the three is largely based on the need to stay in a network of physicians and the need for a primary physician, among other details. Before you make any decisions talk with your human resources representative to see what fits your unique situation. Here's a breakdown of what each generally means:

An HMO -- short for Health Maintenance Organization -- starts with subscribers generally signing on with a primary care physician, who will act as a gatekeeper to other services and referrals. Services in an HMO are generally provided by a network of participating providers. Mercer Health officials said typically services received from non-participating providers are not covered by the plan.

An EPO -- short for Exclusive Provider Organization -- is similar to an HMO in that it is a health care plan that covers eligible services from providers and facilities inside a network. Generally, an EPO does not pay for any services from out-of-network providers and facilities except in emergency or urgent care situations, which is similar to an HMO. People using an EPO generally are not required to have a primary care physician nor referrals, as HMO members are.

A PPO -- short for Preferred Provider Organization -- is a health care plan that allows people to see doctors or get services that are not part of a network. Those out-of-network services are at a higher rate, though. Plans are structured so that members will pay less money out-of-pocket when they use in-network providers, Mercer Health said. In a PPO, members typically do not need to choose a primary care physician, said Paul Fronstin of the Employee Benefit Research Institute. He said they are also typically required to pay a deductible.

There can be other types of plans, but generally those three are the ones you'll be looking at. To help you make your decisions, we created a guide to some of the jargon you'll encounter in those health care packets. Learn more about flexible spending, preventative care, and co-pays.

What terms have you run into or questioned during your health care enrollment period? Discuss your frustrations and questions in our comments section.

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