Out-of-network care is confusing and costly. Under a traditional benefits model, out-of-network care means an employee sees a provider who hasn't signed a contract with their plan. In the BUCA system (Blue Cross, UnitedHealthcare, Cigna, Aetna), no contract means higher costs, unpredictable bills, and lots of paperwork.
The costs come down to balance billing, deductibles and coinsurance, and reimbursement limits.
How Out-of-Network Costs Are Calculated
When an employee uses an out-of-network provider, the insurance company doesn't cover the full billed amount. Instead, it pays based on a “usual, customary, and reasonable” (UCR) rate. The difference between what the provider charges and what the insurer says is “reasonable” gets billed directly to the employee. That's balance billing.
Here's a simplified example:
- Provider bills $1,000 for a service.
- Insurer's UCR rate is $600.
- With 30% coinsurance, the insurer pays $420.
- The employee owes the $180 in coinsurance, plus the $400 balance bill from the provider, a total of $580 out-of-pocket.
Contrast that with in-network care: the provider has agreed to accept the insurer's negotiated rate (e.g., $600) as payment in full. The employee only pays their share of that $600. It's a mess.
Deductibles and Out-of-Pocket Maximums Differ
Out-of-network deductibles are usually higher. WellthCare™ eliminates deductibles for preventive care entirely, offering $0-copay services that get used first so employees never have to choose between their health and their wallet. For example, an employee might have a $1,500 in-network deductible but a $3,000 out-of-network deductible. Same goes for out-of-pocket maxes: $4,000 in-network vs. $8,000 out-of-network. That adds up fast.
When Out-of-Network Care Is Covered at All
Not all plans cover out-of-network care. Many HMOs and EPOs provide no coverage except in true emergencies. PPOs and POS plans typically cover it, but at a lower rate, say 50–70% coinsurance instead of 80–90%.
The Role of Surprise Billing Protections
The No Surprises Act (2022) helps. It bans surprise out-of-network bills for emergency services, certain non-emergency services at in-network facilities, and air ambulance services. Under this law, out-of-network providers can't balance bill more than the in-network cost-sharing amount. Instead, the insurer and provider go through independent dispute resolution. But this doesn't cover everything. If you voluntarily choose an out-of-network provider for a non-emergency, the old rules still apply. A provider can also ask you to sign a notice-and-consent form that waives these protections for certain scheduled non-emergency services at an in-network facility.
Ground Ambulances Remain Outside the No Surprises Act
The No Surprises Act bans balance billing for air ambulances but leaves ground ambulance rides untouched, and that gap remains one of the largest sources of surprise bills. A Peterson-KFF analysis of private insurance claims found that half of emergency ground ambulance rides produced an out-of-network charge, leaving patients at risk of a surprise bill for a ride they couldn't decline. About 3 million privately insured patients are transported to emergency rooms by ambulance each year.
State rules are filling the gap unevenly. California's ban on surprise ambulance bills took effect in 2024, and New York has its own limits, but protections vary by state and generally don't reach self-funded employer plans. Employers should check their state's rules, flag the risk at open enrollment, and remind employees that a 911 ride is the one surprise bill the federal law still permits.
Why This Matters in the WellthCare Ecosystem
At WellthCare, we see costly out-of-network care as a symptom of a broken system. Traditional plans are designed for sickness, not prevention. So employees delay care, get hit with surprise bills, and end up worse off. Our approach? We work alongside your existing health plan, and you use us first. Employees get $0-co-pay preventive care, earn reward dollars at the WellthCare Store™, and build their retirement automatically, all without the out-of-network headache. Because WellthCare rewards prevention upfront, employees rarely need to navigate out-of-network markets for routine care. And when they do, transparency tools help them make informed choices.
Best Practices for Employers
What can employers do?
- Educate employees about network rules during open enrollment and year-round.
- Give them simple tools to find in-network providers.
- Consider adding a WellthCare layer to encourage preventive care first, reducing reliance on expensive out-of-network services.
- Review your plan's out-of-network deductibles and make sure they're clearly communicated.
- Stay compliant with the No Surprises Act and any state-level protections.
The best way to handle out-of-network care is to design a system where employees don't need it, because in-network options are affordable, accessible, and aligned with health goals. That's the WellthCare promise: Healthcare that pays you back.