Types of Health Care Plans

Health Maintenance Organization (HMO) – a health benefits plan requires subscribers to obtain their medical services only through providers who are participating members of the HMO network. All of the subscriber’s health care is coordinated through the efforts of a primary care physician. Most services with the exception of emergency services must be performed by in-network providers. Typically, services completed by out-of-network providers aren’t covered unless special circumstances apply.

Health Reimbursement Arrangement (HRA) – a health insurance account that is designed to reimburse employees for specific health care expenses as the services are performed by licensed providers. They are fully funded by the employers who have obtained them.

Health Savings Account (HSA) – An HSA is a specialized group health account that reimburses a company’s employees for specific health care expenses. HSAs are flexible, and they can be funded by an employer, the HAS plan member, or someone else. The money held in your HSA plan belongs to the plan member and can be used to cover eligible medical expenses – current and future. As long as the health savings account follows the guidelines established under the Internal Revenue Code, all of the member’s contributions, earnings and withdrawals taken to cover eligible expenses are not subject to taxes, including both federal income and employment taxes.

Individual Plan – this type of plan refers to insurance policies that are sold to individuals, who have not been able to obtain medical insurance through a group policy or who believe they need more coverage than their group health care plan provides.

Preferred Provider Organization (PPO) – this type of health care plan enables subscribers to select a provider of their choosing, one who is not necessarily associated with the plan. However, it provides higher levels of coverage for medical services that are obtained through an in-network provider. This is due to the fact that in-network providers have contracted with the PPO network to accept pre-negotiated reimbursement rates.

Self-Funded/Self-Insured Health Care Plans – refers to those health plans in which the insured’s employer or a different group sponsor is held financially responsible for all medical claims and plan expenses created by the members. The insurance company through which the plan is obtained only performs administrative services.