Network Type Comparison
| Network Type | Provider Choice | PCP Required? | Referrals Required? | OON Coverage? | Relative Cost |
|---|---|---|---|---|---|
| PPO | Any provider; in-network preferred | No | No | Yes (higher cost-sharing) | Highest |
| HMO | In-network only | Yes | Yes (for specialists) | No (except emergencies) | Lower |
| EPO | In-network only | No | No | No (except emergencies) | Medium |
| POS | In-network preferred; OON allowed | Yes | Yes (for in-network specialists) | Yes (higher cost-sharing) | Medium |
Choosing the Right Network Type
Network type selection should be driven by workforce demographics and geographic distribution. A workforce concentrated in a single metro area with strong HMO networks may benefit from an HMO offering. A geographically dispersed workforce with employees in rural areas needs a PPO with broad national network access.
The PPO Default Problem
IQ Insight
Most employers default to a PPO because it is familiar and employees expect it. But PPOs are the most expensive network type — and the broad provider choice they offer is often not fully utilized. Many employees see the same 3–5 providers year after year. An EPO or narrow network PPO that includes those providers at a lower cost may deliver the same practical access at significantly lower cost.