Tiered Benefits

Tiered Health Insurance Benefits (Networks)

What are tiered health insurance networks?

Tiered health insurance networks are structured systems where healthcare providers (hospitals, doctors, clinics) are grouped into tiers by the insurance company. Each tier represents a different level of cost and quality, typically based on factors like cost-efficiency, quality of care, and performance.

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How do the tiers work?

Most tiered networks include:

Tier	Description	Your Cost
Tier 1	Preferred or high-performance providers; selected for cost-efficiency and quality outcomes	Lowest copays and coinsurance
Tier 2	Standard in-network providers; meet basic quality benchmarks	Moderate copays and coinsurance
Tier 3 (or out-of-network)	Out-of-network or non-preferred providers	Highest cost, or no coverage at all (except in emergencies)

Example: A visit to a Tier 1 specialist might cost you $25, while a Tier 2 provider could cost $50. A Tier 3 provider might result in a $100+ bill—or you may pay the full price if they’re not covered.

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Why do insurance companies use tiered networks?

Tiered networks aim to:

• Control healthcare costs for both the insurer and the member
• Encourage use of high-quality, cost-effective providers
• Provide transparency about provider options and cost differences
• Help members make value-based care decisions

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How do I know what tier a provider is in?

You can confirm your organization's tier by:

• Referencing your group's Payer Contract
• The insurance company’s provider directory (usually online)
• Calling the insurance provider service number

It’s important to check the tier before each visit, since tiers can change annually or even mid-year.