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An Exclusive Provider Organization (EPO) may not be as well-known as a Health Maintenance Organization (HMO) or a Preferred Provider Organization (PPO); however, with a bit of research, you might find an EPO is the perfect health insurance plan option for you and your employees.

What’s an EPO?

An EPO is a type of health plan that offers a full-network of doctors and hospitals from which to choose.

Like a HMO, an EPO gives your employees access to a select network of medical providers. If they go to a provider in-network, they have limited out-of-pocket costs. If they go outside of the network, the plan offers limited, if any, benefits and your employees’ costs are higher.

Like a PPO, your employees with EPO coverage don’t need to get a referral from a Primary Care Physician to visit a specialist, so long as the doctor is part of the EPO network.

An EPO in Action


Benefits of an EPO

The most well-known benefit of an EPO is its ability to apply the strengths of both an HMO and a PPO in a single option. An EPO offers more flexibility than an HMO because you don’t need a referral from your primary care physician (PCP) to receive specialist care. An EPO is also priced competitively, frequently offered at more affordable premiums than a PPO. For many, it’s a happy medium between an HMO and a PPO.

EPO Plans Available through CaliforniaChoice

The Anthem Blue Cross EPO coverage through CaliforniaChoice includes member access to the Anthem Prudent Buyer Network, which offers 90% of doctors and hospitals in the United States through the national BlueCard® Program. Some of the in-network premier California facilities include:

Oscar Health offers EPO plans in all four metal tiers through CaliforniaChoice. Oscar’s EPO network in Southern California includes top hospitals and providers in Los Angeles and Orange counties, including:

Talk With an Agent to Learn More

You can get details on the EPO, HMO, PPO, and other options available to you and your business from an employee benefits agent. If you don’t already have an agent, you can look for one here.

With 3.6% unemployment, the lowest rate in more than four decades, employers face increasing competition in recruiting and retaining top employees. While many businesses are responding by increasing wages, others are also making changes to their employee benefits programs to address changing demographics and health care needs.

As evidenced by the Society for Human Resource Management (SHRM) 2019 Employee Benefits Survey, offerings that were not a part of the typical benefits package a few years back are increasing in popularity.

Health Care & Wellness

Employers continue to emphasize health care and retirement benefits. In the latest SHRM survey, health-related benefits were increased by 20% of employers since 2018, regardless of size. Wellness benefits were more likely to be broadened by larger employers (those with 500+ employees), as compared to small businesses (1-99 employees).

Eighty-five percent of employers offer a Preferred Provider Organization (PPO) insurance plan. High Deductible Health Plans (HDHPs) linked to a Health Savings Account (HSA) or Health Reimbursement Account (HRA) continue to grow, with more than half (59%) of employers offering at least one HDHP offering. That could decline in next year’s SHRM survey, as the Kaiser Family Foundation reported in October 2019 that employers are scaling back on HDHPs, finding instead that a more generous plan with a lower deductible is an attractive recruitment tool.

Leave and Flexible Working Benefits

There is a growing demand for flexible work hours and the ability to work remotely. Employers have responded by increasing the availability of telecommuting and flextime. According to the SHRM 2019 survey, 69% of employers allow telecommuting on an ad-hoc basis (up from 56% in 2015). Forty-two percent allow telecommuting on a part-time basis (up from 36% in 2015). More than one-fourth (27%) of SHRM respondents said they allow full-time telecommuting (up from 22% in 2015).

While just 15% of SHRM survey respondents offer a four-day workweek, there is growing interest in the idea among employees. As reported in Q1 2019 by CNBC, approximately two-thirds of workers want to work less than five days a week, but just 17% have that option. The idea recently generated buzz because of a 2019 experiment by Microsoft for its workers in Japan. Productivity jumped by 40% when electronics store employees switched to a four-day workweek. The company also said it lowered its electric costs (by 23%) and reduced printed pages (by nearly 60%). Similarly, a New Zealand firm found its move to a four-day week boosted productivity and reduced electric costs.

While a four-day workweek is likely not an option for all firms, it could be worth considering depending on the needs and expectations of your customers as well as your flexibility in responding to employees’ interest in a compressed work schedule.

Personal Growth/Career Advancement

Educational assistance, tuition reimbursement, and management training can help you recruit and retain cream-of-the crop talent. A new education-related benefit is also growing rapidly: student loan repayment assistance. Forbes called it the hottest employee benefit of 2018 and Employee Benefit News advocated for the addition of student loan repayment benefits in 2019.

SHRM found eight percent of employers offered such a program in 2019, doubling the number from the three prior years. That compares to 56% of employers that offer undergraduate or graduate tuition assistance (the same percentage as in 2015) and 83% that offer professional development, including both offsite and onsite opportunities.

The employer cost need not be significant. As noted in a post by Gusto, even an extra $100 per month would help the average recent college graduate pay off his or her student loans nearly three years early.

Pet-Friendly Workplaces

As Employee Benefit Adviser said in an online article in November 2019, the modern workplace is going to the dogs. In response to millennial workers’ growing affection for pets, more employees are looking to their employers to offer them access to pet insurance and on-site or nearby pet care. SHRM says about 15% of U.S. employers offered a pet insurance benefit in 2019, up from nine percent in 2015.

Eighty-seven percent of polled employers say being dog-friendly helps them attract and retain employees, according to the Mars Petcare 2019 report, Better Cities for Pets. It cites several benefits of a pet-friendly workplace:

SHRM’s 2019 survey found 11% of employers allow pets at work – up from 8% in 2015. “Take Your Dog to Work Day,” held annually in June, is a good way to test out the idea of pets in the workplace. Just be sure to check with your office property owner and develop some rules about who is eligible to take part (e.g., socialized dogs up-to-date on vaccinations). Also, be sure you have supplies on hand to help employees with the necessary clean-up tools, which are sure to be needed.

Purina offers additional suggestions in its article, 5 Steps to a Pet-Friendly Workplace.

More Changes Likely

There is no doubt employee preferences are driving benefit changes in the workplace. That is sure to continue, as long as the economy continues to thrive and unemployment remains low. For more information about how employers are responding and what are the most common employee benefits, read our blog post, The Most Common Employee Benefits.

To get help on developing a winning employee benefits package for your business, talk with your insurance and benefits agent. If you do not have one, you can search for one here.

Today’s workplace is evolving quickly as are employee salary and benefit expectations. Employers should take note and consider what these changes mean in practice, today and for the coming year. We’re looking ahead to 2020 and making five predictions for small business employee health insurance that could impact employers in a big way.

Increased Demand for More Options

Changing demographics make it more challenging for employers to find a single health plan that’s right for all employees. The workforce is more generationally diverse than ever before. It’s not uncommon to find four generations working side by side: Baby Boomers, Generation X, Millennials, and Generation Z. 

With greater diversity comes a variety of health care needs. Your young, unmarried employees starting their professional careers are likely to want something different than their older co-workers who may be married, parents, or even empty nesters.

As an employer, offering options can help you attract and retain employees in an increasingly competitive environment. More and more, employees expect to have a greater say in their health care and other benefits. With a multi-carrier health care exchange, you can easily address diverse employee needs. That’s because an exchange delivers access to multiple health plans – and plan designs – giving your employees the freedom to choose what’s right for them.

Increased EPO Membership

Among the many options available through a private exchange is an Exclusive Provider Organization (EPO), which combines some of the benefits of a Health Maintenance Organization (HMO) with other benefits of a Preferred Provider Organization (PPO).

An EPO gives your employees access to a select network of doctors, hospitals, and other health care providers like an HMO. If employees stay in-network, they typically have lower or no out-of-pocket costs; however, if they go out of network, the EPO offers limited benefits and employees pay higher out-of-pocket costs.

A big advantage for EPOs is that, as with a PPO, members don’t need a referral from a Primary Care Physician to visit a specialist, as long as the specialist is part of the EPO network.

Where five years ago, only seven percent of employers offered an EPO, today nearly twice as many (13%) offer EPO coverage, according to the 2019 Employer Benefits Survey by the Kaiser Family Foundation. Expect that number to keep climbing in 2020.

More Value-Added Benefits Offerings

More is the theme of 2020. We predict employees will expect access to more wellness products and services like gym memberships. We’re already seeing the effects of employee expectations in this area. The state’s private exchange and many health insurers offer value-added benefits like fitness discounts. Health Net, Western Health Advantage, and CaliforniaChoice all have affiliations with the Active&Fit Direct program that includes membership discounts at more than 10,000 fitness centers nationwide.

CaliforniaChoice anticipated the increased demand for additional benefits by launching its Member Value Suite for its members. In addition to Active&Fit Direct, the Member Value Suite offers entertainment discounts through the Cal Perks® program, reduced fees on dental services at participating Dentegra® dentists, discounts on vision exams, frames, and lenses through the EyeMed® Vision One Eyecare program, discounted hearing services, and more.

When you’re considering a benefits program, be sure you look at the big picture and compare any added benefits that carriers and exchanges provide.

Modernization of Health Insurance Technology

Most health plans offer provider network search tools on their websites to simplify the search for in-network doctors, specialists, and hospitals. Some plans and administrators will take it a step further in 2020. For example, in addition to offering online provider searches and prescription drug searches, CaliforniaChoice’s Automated Choice Profiler allows prospective and current members to search for coverage that best matches their specific health care needs — or projected needs — from the dozens of plan options available through the private exchange.

We’re also projecting a push for greater cybersecurity. With data breaches and system hacks dominating the headlines, you can expect insurance and related companies to invest heavily in protecting member information. Make sure your health insurance provider is cybersecurity certificated through a reputable organization like HITRUST.

Greater Employer Cost Control

Fortunately, double-digit annual premium increases on group health coverage are no longer the trend in California. However, controlling health care costs remains a focus, particularly for small businesses. Defined Contribution is one solution. Defined Contribution allows you to set the amount you want to contribute toward the premium for your employees’ health benefits. It gives you more flexibility than what you may find with a carrier-direct program.

There could also be an increased focus on Section 125 Premium Only Plans (POP) as an additional cost-saving measure. A POP plan allows employees to pay for their premiums with pre-tax income. The benefit of a POP is two-fold. First, it results in a lower tax bill on employees by reducing their taxable income. For employers, it lowers the cost of payroll taxes and Workers’ Compensation.

Plan Now for 2020

An employee benefits agent can help you prepare for the changes coming in 2020 – and share other predictions and updates on trends affecting employee benefits. If you do not already have an agent, it’s easy to search for one here.