Health maintenance organizations (HMOs) are a type of health insurance plan that usually limits coverage to care from doctors who work for or contract with the HMO. It generally won't cover out-of-network care except in an emergency. An HMO may require you to live or work in its service area to be eligible for coverage. HMOs often provide integrated care and focus on prevention and wellness. In addition to the monthly premium (which may be shared by the employer and employee), participants usually need to pay a small fee at the time of service called a copay (often in the range of $10 to $40), while the HMO covers 100% of the services provided.

What is covered? 

Usually comprehensive.

Whom can you see? 

Limited network; no benefits for services outside network. Generally, services must be referred by primary care physician (some exceptions such as preventive gynecological exams, emergency services, etc.).

Cost-sharing at time of service: 

Typically low copayments at time of service ($10 to $40); no co-insurance.

Monthly premium*: 

Typically medium range; averages roughly $575.


Makes sense when employees are willing to give up flexibility in provider choice and accept greater management of their care. Also offers benefits in terms of ease of administration. Less attractive if some or many employees feel strongly about having access to a wide selection of providers.

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