PEPM vs PMPM, defined.

PEPM stands for per employee per month. It is a pricing model commonly used in employer-sponsored healthcare and digital health programs. A vendor charges a fee for every eligible employee in the covered population, regardless of whether that employee actually uses the service.

PMPM stands for per member per month. Same structure, different denominator: the rate applies to every covered member, which usually includes spouses and dependents, not only the employees on payroll. Health plans, managed care organizations, and capitated contracts quote in PMPM. Employer benefits deals quote in PEPM.

PEPM vs PMPM: the difference

Both models charge a fixed monthly rate for a covered population, and neither cares whether anyone used the service that month. The difference is who gets counted.

Contracts blur the two more often than they should. If a proposal quotes PEPM but the eligibility file includes dependents, you are paying PMPM under a different name. Pin the denominator down in writing before you sign.

A worked example

Take a 400-employee company buying a virtual care benefit at $6 PEPM. The bill is 400 × $6 = $2,400 a month, $28,800 a year, whether 15 employees log in or 380 do. Now price the same population PMPM. With spouses and children enrolled, those 400 employees might mean 900 covered lives. At $3 PMPM the bill is 900 × $3 = $2,700 a month, $32,400 a year.

Same company, same service, 12.5% more spend, and the only variable that changed was the denominator. The per-unit rate alone tells you nothing. A low PMPM rate on a big member count can cost more than a higher PEPM rate on employees only, and vendors know which framing looks cheaper in a deck.

If a deck quotes a cheap PMPM and the file includes dependents, you are not comparing the same population. Get the denominator in the contract.

Where each model shows up in telehealth contracts

PEPM is common in employer benefits programs, broker-mediated offerings, and B2B digital health platforms sold to HR teams. If the buyer is an employer and the pitch is a benefit, expect PEPM. Vendors selling into health plans and managed care organizations quote PMPM instead, because a plan thinks in covered lives, not payroll.

Direct-to-consumer telehealth mostly uses neither. A D2C brand charges patients a subscription or a per-visit fee, and pays its platform vendor a flat fee or a per-transaction cut. You will still meet both acronyms in D2C, usually when an employer or a payer channel partner wants to buy your program for their whole population.

Why operators care

PEPM affects how a service is packaged, sold, forecasted, and supported. Operators picking a pricing model decide which buyer they are selling to and how revenue compounds. An employer deal priced PEPM grows with someone else's hiring plan. A payer deal priced PMPM grows with enrollment. A consumer subscription grows with your own funnel.

Flat platform pricing, compared

The same denominator question applies when you buy infrastructure. Some telehealth platforms price per employee, per member, or per patient, so the software bill climbs as the covered population grows. Remedora prices the platform flat, from $200 a month, with storefront, intake, licensed providers in 50 states plus Puerto Rico, e-prescribing, pharmacy fulfillment, and payments included. At 400 patients or 4,000, the platform line is the same line. A per-head fee is a tax on growth. A flat fee is not.

FAQ

Related terms

For the broader pricing context, read our telehealth pricing guide, or visit the glossary index.