Preferred Provider Organizations (PPOs)

If you're an employee working for a company of good standing, you've probably heard of the term “PPO” that's usually discussed along with the many health benefits provided by your employer. PPO stands for Preferred Provider Organization, which is actually a health plan contracting a network of medical service providers available in case you need some tuning up. Referrals and primary care physicians are no longer required to approach PPOs.

Depending on your customized health plan, you might have to shoulder annual deductibles and co-payments upon visiting a member of your company's PPO. However, opting to stick to your family doctor or a medical specialist not in the preferred network will mean more deductions to your health privileges. Going out-of-network means you'll have to pay the doctor directly and file a claim with the PPO for reimbursements.

Health insurances also come in the form of HMOs. You shouldn't confuse PPO with HMO, or Health Maintenance Organization. Unlike PPOs, HMOs do not give reimbursements to employees who consult with doctors outside of the network. HMOs also require a referral from your primary care physician to see a specialist and have your medical expenses covered. Filing a claim with the HMO beforehand is also necessary to receive payment from your company.

PPO is just one of the many words you'll encounter concerning health benefits. Don't just sign agreements without reviewing their terms.