Balancing Cost, Access, and Care in Health Care Offerings

Most employers (82%) surveyed in the SHRM 2024 Employee Benefits Survey use a preferred provider organization (PPO) for employee health care. PPOs dominate employer-sponsored health care offerings, but this approach isn’t the only way employers can build out their total rewards and compete in the talent market. In fact, having a combination of offerings can help keep employees healthy and allow employers to stand out to job seekers.

Employers should review alternative health care offerings to ensure their current approach makes the best sense and to find ways to improve their total rewards — especially as new innovations come to market. Three alternatives in particular offer insight into the span of options.

1. Consumer-Directed Health Plan (CDHP) 

A CDHP is typically combined with a high-deductible health plan that has tax-advantaged health savings accounts (HSAs) or flexible spending accounts (FSAs). 

Pro: Employees can cover higher-than-anticipated costs with HSA funds while getting help to offset premiums and deductible costs. 

Con: Chronic conditions or health needs requiring more services can put a strain on HSA funds. 

2. Point-of-Service (POS) 

In this framework, health care costs are paid for at the time of service. Employers can contract with third-party administrators to handle claims and direct primary care providers to cover basic care for a set price.

Pro: Employees with chronic conditions can more easily access care without worrying about co-pays and deductibles. 

Con: There may not be direct primary care practices in the desired geographic area.

3. Exclusive Provider Organization (EPO) 

Similar to a health maintenance organization (HMO), EPOs offer employees care from a select group of providers.

Pro: This offers lower premiums and out-of-pocket costs than many PPOs and grants access to a larger network than HMOs typically offer. 

Con: Except for emergencies, out-of-network care is not covered.

Total rewards strategies for health care can be customized to fit the unique needs of an organization. Employers have options to build a total rewards package that supports current employees while attracting new talent, whether that package focuses on total cost, access to care, or general employee wellness.