Understanding HMO Basics: A Guide for New HR Managers in SMEs

A strong HMO plan is more than a benefit—it’s a commitment to employee well-being.

Navigating healthcare plans can be overwhelming for new HR managers, especially in SMEs where resources may be limited. Understanding the basics of health maintenance organizations (HMOs) is crucial for managing employee benefits effectively and ensuring staff receive the care they need. This primer simplifies HMO terms, coverage details, and best practices so you can start 2025 prepared.

Key HMO Terms Every HR Manager Should Know

1. Premiums:
   The regular payments made by the employer or employee to maintain HMO coverage. Most SMEs in the Philippines cover premiums for their employees and offer shared plans for dependents.

2. Maximum Benefit Limit (MBL):
   The maximum amount covered per year for illnesses, treatments, or procedures. Purple Cow, for instance, offers 100% coverage for pre-existing conditions up to the MBL.

3. Accredited Providers:
   Hospitals, clinics, and doctors within the HMO network where employees can avail of cashless services.

4. Outpatient vs. Inpatient Care:

   • Outpatient Care refers to consultations, laboratory tests, and minor procedures that don’t require hospitalization.

   • Inpatient Care covers treatments that require hospital admission, including surgeries and recovery stays.

5. Letters of Guarantee (LOG):
   Documents issued by the HMO to hospitals ensuring payment for covered services, reducing the need for out-of-pocket expenses.

Best Practices for Managing HMO Plans

1. Educate Employees About Their Benefits:
   Host orientations or send out guides to ensure employees understand what’s covered and how to use their plans.

2. Keep Records Organized:
   Track utilization rates, claims history, and feedback to measure the effectiveness of your HMO plan.

3. Promote Preventive Care:
   Encourage employees to use annual physical exams (APEs), routine tests, and vaccinations to stay healthy and avoid costly treatments later.

4. Streamline Access to Digital Tools:
   Platforms like Purple Cow’s SmilePH make it easier to check coverage details, file claims, and book appointments.

5. Partner with a Flexible HMO Provider:
   Look for providers offering customizable plans that include add-ons for mental health, dental care, and life insurance.

Why HR Managers Should Prioritize Healthcare Planning

For SMEs, a well-managed HMO plan isn’t just about compliance—it’s a way to attract and retain talent while promoting productivity. Employees who feel supported in their health are more motivated and engaged at work.

Ready to Empower Your Workforce?

Managing healthcare plans doesn’t have to be complicated. By understanding the basics and working with a reliable provider, HR managers can confidently build health benefits that make a difference.

Explore Resources for Smarter Healthcare Planning

Explore Purple Cow’s essential healthcare resources and get the tools you need to manage HMO plans effectively for your SME!