• HMOs (Health Maintenance Organization plans)
  – HMOs are usually the lowest-cost option but provider selection is restricted. HMOs require that the insured use a primary care physician from the insurance company’s approved provider list. A referral from your primary care doctor is required to see a specialist who must also be on the insurance company’s approved list;
   
• PPOs (Preferred Provider Organization plans)
  – allow the insured to use any physician or hospital in the insurer’s network without the necessity of a referral. Providers outside the network can be used but with an additional copay or other financial penalty;
   
• HDHPs (High Deductible Health Plans)
  – are PPO plans with a higher deductible ($1,000 or more annually but often $2,500 or $5,000). Selecting a higher deductible can substantially reduce the premium. Certain HDHPs also qualify for HSA (Health Savings Accounts) treatment which gives the insured a tax-advantaged way to pay for everyday medical expenses with pre-tax dollars.

Through the co-employment contract, a PEO can deliver a consistent national health insurance plan regardless of where the employees live. Geographic availability of each option may vary depending on the health insurance company the PEO uses. The PEOs AGU contracts with are insured by large, well-known national companies and can cover employees in all states.

In addition to expanded choice, because a PEO is a large group, rates are usually much better than a small company could obtain on its own.

Some PEOs also offer low-cost limited medical health insurance plans to hourly, part-time and seasonal employees who are not eligible for major medical.

FSAs (Flexible Spending Accounts) and Section 125 Plans are offered by many PEOs to help employees direct their health care dollars to the kinds of benefits they most need and do so on pre-tax basis.