HMO, PPO, EPO, Captive, MVP, and Restricted Benefits
The Employers Guide to Health Benefits
Choosing the right health coverage for your business is more than a compliance requirement. It’s a strategic decision that impacts cost management, employee satisfaction, and workforce stability. Today’s employers have a range of plan types to consider, each with distinct structures, cost profiles, and administrative requirements.
This article offers a clear, structured comparison of six major coverage options—HMO, PPO, EPO, Captive Plans, Minimum Value Plans (MVP), and Restricted Medical Coverage—designed to help employers navigate their options and select the approach that best aligns with their workforce needs and business goals.
Understanding the Plan Types
What Is an HMO?
A Health Maintenance Organization (HMO) plan emphasizes cost containment and network coordination. Employees must select a primary care physician (PCP) and obtain referrals to see specialists. Services are limited to in-network providers, except in emergencies.
Key Characteristics
- Requires referrals for specialist care
- Services limited to in-network providers
- Typically lower premiums and out-of-pocket costs
What Is a PPO?
A Preferred Provider Organization (PPO) provides employees with more flexibility in provider selection. It allows both in- and out-of-network care and does not require PCP referrals for specialist access.
Key Characteristics
- Broad provider network
- No referral required for specialists
- Higher premiums and more flexibility
What Is an EPO?
An Exclusive Provider Organization (EPO) blends aspects of HMO and PPO structures. It offers network-based care without requiring referrals but does not cover out-of-network services except in emergencies.
Key Characteristics
- In-network only coverage
- No referral required for specialists
- Balanced cost and access
What Is a Captive Plan?
A Captive Plan is a form of self-funding in which a group of employers pools their resources to form a private insurance entity. Captive arrangements provide transparency, shared risk, and customizable design.
Key Characteristics
- Offers long-term cost control through pooled risk
- Enhanced data transparency for claims management
- Requires stable claims experience and long-term commitment
What Is an MVP Plan?
Minimum Value Plans (MVPs) are designed to meet the Affordable Care Act’s definition of minimum essential coverage. MVPs typically cover at least 60 percent of the total allowed cost of benefits and include substantial inpatient and physician services.
Key Characteristics
- ACA-compliant
- Lower monthly premiums
- Ideal for meeting mandate requirements
What Is Restricted Medical Coverage?
Restricted Medical Coverage offers essential, high-utility healthcare benefits at a lower cost. These plans often include preventive services, office visits, urgent care, basic labs, and limited prescription drug coverage.
Key Characteristics
- Focused on everyday care needs
- Lower premiums compared to major medical
- Ideal for part-time, hourly, or high-turnover workforces
- Scalable across industries and sizes
SBMA supports Restricted Medical Coverage with a comprehensive administrative platform that enables simple onboarding, ID card delivery, claims management, payment tracking, and employee support. This makes offering coverage efficient and compliant for employers of all sizes.
Plan Comparison: Key Differences
| Feature | HMO | PPO | EPO | Captive | MVP | Restricted |
|---|---|---|---|---|---|---|
| Network Type | In-network only | In- and out-of-network | In-network only | Custom network | In-network focus | In-network, focused scope |
| Referrals Required | Yes | No | No | Varies | No | No |
| Employer Cost | Lower | Higher | Moderate | Varies based on structure | Lower monthly premiums | Lower premiums with practical coverage |
| Administrative Complexity | Low | Moderate | Moderate | High | Low | Low with SBMA platform |
Minimum Enrollment Requirements and Administrative Efficiency
Traditional group health plans often require a minimum number or percentage of eligible employees to enroll in order to activate coverage. This can present challenges for employers with part-time or seasonal staff, high turnover, or lean operations.
SBMA offers health coverage solutions with very low or no minimum enrollment requirements, which provides significant flexibility for employers across industries. Paired with an efficient administrative system—covering onboarding, ID cards, offboarding, claims, and billing—this makes implementation and management more predictable and less resource-intensive.
Affordability: Legal Definition and Practical Impact
Under the Affordable Care Act (ACA), an employer’s offer of coverage is considered affordable if the employee’s share of the premium for self-only coverage does not exceed 8.39 percent of their household income in 2025.
This is a compliance benchmark, but practical affordability depends on more than just premium cost. Deductibles, out-of-pocket maximums, and access to everyday care all influence whether a plan is truly usable.
Plans like Restricted Medical Coverage are designed with real-world application in mind, often avoiding high deductibles in favor of more accessible first-dollar coverage for preventive and routine care.
Which Plan Is Right for Your Business?
There is no universal solution. The right health plan depends on your workforce, your cost structure, and your long-term strategy. Use the following as a guide:
Choose an HMO if your team values structure, and you want predictable, lower-cost premiums.
Choose a PPO if your employees want the freedom to choose providers and access out-of-network care.
Choose an EPO if you want in-network coverage with fewer restrictions but lower cost than a PPO.
Choose a Captive Plan if you have a stable, benefits-engaged workforce and want long-term control over healthcare spending.
Choose an MVP Plan if your goal is to meet ACA compliance with lower monthly premiums and minimal disruption to payroll.
Choose Restricted Medical Coverage if your workforce includes hourly, part-time, or high-turnover employees who benefit from simple, everyday care access at an affordable rate. With SBMA’s platform, employers can scale this coverage with confidence and efficiency.
Choosing The Right Coverage For Your Business
Employers are navigating a more complex benefits environment than ever before. With rising healthcare costs and shifting workforce expectations, plan selection must go beyond compliance and base premiums. It requires clarity, structure, and a system that supports both your business operations and your employees’ health.
SBMA provides the tools, support, and plan options that help employers lead with confidence. When the structure is clear and the delivery is efficient, health benefits become a competitive advantage—not a cost center.
