Thursday, November 15, 2012

What are EPO & PPO Health Plans?

By:  Tonya Williams, Employee Relations Specialist
School District of Janesville

Currently the School District of Janesville self-funds an indemnity plan.  An indemnity plan is also called a “fee-for-service” plan.  With indemnity plans, the individual pays a pre-determined percentage of the cost of health care services, and the self-insured employer pays the other percentage.  The fees for services are defined by the providers and vary from physician to physician.  Indemnity health plans offer individuals the freedom to choose their health care professionals.

In previous years, the District has taken steps to implement programs to help sustain the costs of our self-funded insurance.  In 2002, the Alliance network was introduced to provide network savings to our claims.  In September 2008, a wellness plan was introduced to promote healthy lifestyles by encouraging staff to participate in wellness activities throughout the year.  In January 2008, Navitus, our prescription benefit manager was introduced to save the District money in drug costs as well as to members who participate in certain drug programs they offer.  In November 2011, the District implemented Coordinated Health Care to help employees navigate through a complex medical system; therefore, eliminating redundant testing and services that cost you, the consumer, and the District more in claims.

This year the Boyd Consulting Group (BCG) has recommended several plan designs to the District to save money in claims and to also maintain great coverage at a cost-effective rate for our members.  This has been no easy task!  On November 13, BCG recommended three plans for the Board of Education to consider.  One plan is an Exclusive Provider Organization (EPO), and the other two are a Preferred Provider Organization (PPO).

As a member of an EPO you can use the doctors and hospitals within the EPO network, but you cannot go outside the network for care.  There are no out-of-network benefits.  An EPO can be an attractive plan to members who wish to save money in premiums, but don’t need the flexibility to go to doctors outside of the exclusive network.  An EPO saves the District money in claims because the exclusive network provides a much lower negotiated rate than an HMO or PPO plan offers.

As a member of a PPO you can choose to see doctors within a preferred network of medical care providers.  A PPO offers members much more flexibility to see doctors outside of an exclusive network.  The premiums for a PPO are higher because you are paying to have the flexibility to choose doctors within the preferred network.

If the District decides to offer more than one plan for members to choose from, keep in mind that there will be a designated open enrollment time period each year giving you an opportunity to change your plan each year. 

To view the three recommended plans please visit the School District of Janesville's Website.  You can contact me at 743-5021 if you have questions regarding the recommended plans. 

**Disclaimer:  The District is currently exploring the use of an EPO and PPO.  An EPO or PPO plan has not been recommended at this time.  This blog is an informational piece and intended to educate members on healthcare insurance.

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