Types of Health Insurance Networks

A health insurance network is the group of doctors, hospitals, pharmacies, and other providers that have contracted with a health insurance company or health plan to provide care, often at a discounted rate. Your plan's network can affect which medical providers you can see, whether you need a referral to see a specialist, and how much you'll pay for care.

In this article, we'll review the four common types of health insurance networks to help you choose health coverage that works best for you.

In this blog post, you'll learn:

• How HMO, PPO, EPO, and POS health insurance networks work.
• The key differences in referrals, provider access, out-of-network coverage, and costs.
• How to evaluate network types when shopping for individual insurance plans through a CHOICE Arrangement, formerly known as an ICHRA.

Health insurance network types at a glance

The four common types of health insurance networks are health maintenance organizations (HMOs), preferred provider organizations (PPOs), exclusive provider organizations (EPOs), and point of service (POS) plans.

The biggest differences between HMO, PPO, EPO, and POS health plans come down to referrals, out-of-network coverage, and cost.

These are general characteristics, not guarantees. A plan's actual premium, deductible, copays, coinsurance, provider network, and referral rules can vary. It’s important to review your plan’s summary of benefits and coverage (SBC), drug formulary, and provider lists.

Network type also isn't the same thing as a plan's metal level. For federal health insurance Marketplace plans, Bronze, Silver, Gold, and Platinum categories describe how the carrier and member split healthcare costs.

What is an HMO?

An HMO is a type of health plan that generally limits coverage to care from doctors who work for or contract with the HMO. Routine out-of-network care generally isn't covered, except for emergency care. Some HMOs may also require you to live or work within a specific service area.

According to KFF’s 2025 Employer Health Benefits Survey, 12% of workers with employer-sponsored coverage enrolled in an HMO¹. Remodel Health’s 2026 National ICHRA Report also found that 45% of our customers’ employees enrolled in an HMO individual plan.

How an HMO works

With an HMO, you typically select a PCP who coordinates much of your care. Depending on the plan, you may need a referral from your PCP before seeing a specialist.

For example:

• If you need to see a dermatologist, you must visit your PCP first to get a referral.
• You would then choose a dermatologist within your HMO's network and pay the applicable cost-sharing for the visit.
• If you choose an out-of-network dermatologist for routine care, your HMO generally won't cover the service.

HMO cost trade-offs

The main trade-off with an HMO is cost versus provider choices. Because HMOs generally use narrower networks and limit out-of-network coverage, they may offer lower premiums or other lower costs than plans with more provider flexibility.

Potential advantages of an HMO include:

• Lower premiums or out-of-pocket costs compared with some more flexible plans
• Coordinated care through a PCP
• Predictable costs when you stay within the network

Potential drawbacks include:

• Limited provider choice
• Little or no routine out-of-network coverage
• Referrals may be required for specialist care
• Less flexibility when traveling outside the plan's service area

An HMO may be a good fit if you have preferred providers who are already in-network, don't expect routine out-of-network care, and want to keep medical costs manageable.

What is a PPO?

A PPO is a health plan that contracts with doctors, hospitals, and other providers to create a network. You'll generally pay less when you use in-network providers, but you can also use out-of-network providers for an additional cost. PPOs typically don't require referrals to see specialists.

How a PPO works

Suppose you need to see an orthopedic specialist. With a PPO, you can generally choose an in-network specialist and make an appointment without first getting a referral from your PCP.

You can also choose an out-of-network specialist. However, you'll generally pay more for that care through higher deductibles, coinsurance, or other cost-sharing.

This flexibility can be especially useful if you have a preferred provider outside your plan's network or frequently travel outside your plan's local service area.

PPO cost trade-offs

The primary trade-off with a PPO is higher potential costs in exchange for greater flexibility. PPOs often have higher premiums than plans with more restrictive networks, and out-of-network care typically costs more.

Potential advantages of a PPO include:

• Broad provider choice
• Out-of-network coverage
• No referrals for specialist care in most plans
• More flexibility for people who travel

Potential drawbacks include:

• Higher premiums in many cases
• Higher costs for out-of-network care
• More cost-sharing when using providers outside the network

A PPO may be a good fit if you value provider choice, regularly see specialists, travel frequently, or want the option to receive out-of-network care.

PPOs are the most common type of employer-sponsored group health plan. According to KFF's 2025 Employer Health Benefits Survey, 46% of covered workers were enrolled in PPOs. However, this share is lower for individual plans. Our 2026 National ICHRA Report found that 17% of our customers’ employees enrolled in an individual PPO plan.

What is an EPO?

An EPO is a managed care plan that generally covers services only when you use doctors, specialists, or hospitals in the plan's network, except in an emergency.

How an EPO works

An EPO is similar to an HMO because it generally doesn't cover routine out-of-network care. However, EPOs typically give you more freedom to see specialists without going through a PCP first.

For example, if you need to see a cardiologist, you can generally choose an in-network cardiologist without getting a referral. But if you choose a cardiologist outside the EPO's network, the plan generally won't cover the service unless an exception applies.

Because out-of-network coverage is generally limited, checking the network before receiving care is particularly important with an EPO.

EPO cost trade-offs

An EPO can offer a middle ground between a narrower-network plan and a PPO. You may have the convenience of seeing specialists without referrals while accepting that routine out-of-network care generally isn't covered.

Potential advantages of an EPO include:

• No specialist referrals in many plans
• Potentially lower costs than plans with broader provider access
• Straightforward in-network coverage
• Direct access to specialists

Potential drawbacks include:

• Limited provider network
• Little or no routine out-of-network coverage
• Potentially high costs if you receive non-emergency care outside the network

An EPO may be a good fit if you have access to a strong network of local providers, want to see specialists without referrals, and don't expect to need routine care outside your network.

Our 2026 National ICHRA Report found that 34% of our customers’ employees enrolled in an individual EPO plan.

What is a POS plan?

A POS plan combines features of HMO and PPO plans. You generally pay less when you use in-network providers, while out-of-network care may cost more. POS plans typically require a referral from your PCP to see a specialist.

How a POS plan works

With a POS plan, you'll typically choose a PCP to coordinate your care. If you need to see a specialist, you'll generally need a referral.

You can typically choose an in-network specialist and receive the plan's lower in-network cost-sharing. Depending on the plan, you may also be able to see an out-of-network specialist, but you'll generally pay more.

POS cost trade-offs

The main advantage of a POS plan is that it combines elements of both HMO and PPO coverage. You get the coordinated care approach of an HMO while retaining some ability to use out-of-network providers.

Potential advantages of a POS plan include:

• Lower costs when using in-network providers
• Some out-of-network coverage
• Coordinated care through a PCP
• More provider flexibility than a traditional HMO

Potential drawbacks include:

• Referrals are generally required for specialist care
• Out-of-network care typically costs more
• More rules to navigate than some other plan types

A POS plan may be a good fit if you prefer having a PCP coordinate your care but still want some access to out-of-network providers.

KFF found that 9% of workers with employer-sponsored group health coverage enrolled in a POS plan in 2025, the least common option among these four types (KFF doesn’t report on EPO separately and instead pairs it with HMOs). Our 2026 National ICHRA Report also found that POS plans were the least popular individual plan option, with only 4% of our customers’ employees enrolling in an individual POS plan.

How network type affects individual insurance plan shopping

Understanding network types matters most when you're shopping for individual health insurance plans through a CHOICE Arrangement, formerly known as an ICHRA.

With a CHOICE Arrangement, an employer can provide employees with tax-free contributions for qualified individual health plan premiums. Instead of picking one group health plan for everyone, employees can choose qualifying individual coverage that fits their needs.

That makes the network type an important part of the individual plan-shopping process.

For example:

• One employee may choose an HMO because their preferred doctors are in-network and the plan fits their budget.
• Another employee may choose a PPO because they want the flexibility to see out-of-network providers.
• An employee who wants specialist access without referrals may prefer an EPO, while someone who values coordinated care but wants some out-of-network flexibility may consider a POS plan.

HealthCare.gov recommends reviewing a plan's provider directory, covered drug list, and SBC when comparing health insurance options². The summary of benefits and coverage is designed to make apples-to-apples comparisons of costs and coverage easier.

For employers and brokers implementing a CHOICE Arrangement, helping employees understand these differences can make individual plan shopping more approachable and help employees make informed coverage decisions.

Conclusion

The right health insurance network depends on your budget, healthcare needs, and preferred providers. HMOs and EPOs generally offer more limited networks, while PPOs and POS plans provide more flexibility for a higher cost.

For employees using CHOICE Arrangements (formerly ICHRA), understanding these differences can make plan comparisons easier and help them find coverage options that fit their needs and budget.

References

1. KFF’s 2025 Employer Health Benefits Survey
2. HealthCare.gov: How to pick a health insurance plan