Health care plans

Correct Answer: Preferred Provider Organization (PPO)

A Preferred Provider Organization (PPO) plan offers employees flexibility in choosing healthcare providers and minimizes out-of-pocket expenses for in-network services. Additionally, PPOs allow employers to maintain some control over overall healthcare costs through negotiated rates with providers. Other plan types, such as Health Maintenance Organizations (HMOs), typically restrict provider options and require referrals for specialists, limiting flexibility. Exclusive Provider Organizations (EPOs) restrict coverage to in-network providers without the option for out-of-network services. Point of Service (POS) plans combine features of HMOs and PPOs but may not align as closely with the objective of maximizing provider flexibility while controlling costs.

Correct Answer: Defined Contribution Health Plan

The Defined Contribution Health Plan provides a set contribution from the employer, allowing employees to choose their own insurance coverage options within the allocated funds. This flexibility empowers employees to select plans that best suit their individual needs. In contrast, a Self-Funded Health Plan involves employers paying for health care claims directly, while a Fully Insured Health Plan requires employers to pay premiums to an insurance carrier. Health Reimbursement Arrangements (HRA) are employer-funded accounts that employees can use to pay for qualified medical expenses.

Correct Answer: Health Maintenance Organization (HMO)

A Health Maintenance Organization (HMO) typically requires members to select a primary care physician and obtain referrals for specialist services. This structure facilitates coordinated care and helps manage healthcare costs. In contrast, a Preferred Provider Organization (PPO) offers more flexibility by allowing members to see specialists without needing referrals. An Exclusive Provider Organization (EPO) also provides some flexibility compared to HMOs but usually does not cover out-of-network services. A Point of Service (POS) plan combines features of both HMOs and PPOs, allowing members to choose between using in-network or out-of-network providers, often requiring referrals for out-of-network specialists.