How to Handle the HMO Plan

Posted on: December 16, 2019 by iSure

Welcome back to our series on the types of group health insurance coverage! Last week we took a deep dive into the details of PPOs, and now we’re going to do the same for HMOs.

Understanding what a healthcare maintenance organization (HMO) is and how they work is critical when choosing a health plan during open enrollment as well as when using an HMO after members are enrolled. The first step is to obtain a group health insurance quote

A primary care physician will be the member’s main doctor and will coordinate all care, so the relationship with them is very important in an HMO. Employees will be able to choose their own primary care physician as long as they are in the HMO’s network. If they don’t choose, insurers will assign one.


The primary care physician will decide whether or not their patient needs other types of care and must make a referral to receive it, such as seeing a specialist, getting physical therapy or obtaining medical equipment such as a wheelchair. Requiring a referral ensures the treatments, tests and specialty care are medically necessary. Without a referral, the HMO won’t pay for them.

The benefit of this system is that patients receive fewer unnecessary services. But the drawback is that patients have to see multiple providers (a primary care physician as well as the specialist) and pay copays or other cost-sharing for each visit.

This rule is not set-in-stone, as some modern HMOs don’t always have this requirement. 

In-Network Providers 

Every HMO has a list of health care providers that are in its provider network. Those providers cover a wide range of health care services including doctors, specialists, pharmacies, hospitals, labs, x-ray facilities, and speech therapists. Those obtaining care out-of-network, the HMO will not cover costs; members will be obligated to pay the entire bill themselves.

Accidentally getting out-of-network care can be a very expensive mistake when you have an HMO. Filling a prescription at an out-of-network pharmacy or getting blood tests done by the wrong lab will leave individuals stuck with a bill for hundreds or even thousands of dollars. It is the member’s responsibility to know which providers are in-network with their HMO. 

If employees plan any sort of medical treatment, they must ask lots of questions in advance in an effort to ensure that everyone who will be involved in the care is in-network.


Cost-sharing like deductibles, copayments, and coinsurance has historically been kept to a minimum with an HMO. Some employer-sponsored HMOs don’t require any deductible (or have a minimal deductible) and only require a small copayment for some services. Because of their low cost-sharing and low premiums, HMOs are considered one of the most economical health insurance choices.

However, in the individual health insurance market, HMOs tend to have much higher deductibles and out-of-pocket costs. In an employer-sponsored market, network design choice remains more robust. Get a group health insurance quote to get an idea of how this plan could be very well worth it for your business.  

About iSure Insurance Brokers

After serving leaders in the Greater Miami market for more than three decades, iSure Insurance Brokers has become the provider of choice for discerning commercial clients and individuals alike. Because no two insurance programs are or should be alike, you can be sure that iSure will craft a comprehensive approach to protection that is as unique as you are. We welcome the opportunity to protect what you have worked so hard to build. Please contact us at (305) 223-2533 to learn more about what we can offer you.

Posted in: Blog Employee Benefits Group Health Healthcare Insurance