When it comes to health insurance, there are different plans designed to meet different needs. The specific options available to you depend on your employer and your personal situation. Listed below are the five most common health plans and some basic information about each.
A type of health plan where you pay less if you use in-network providers. However, you do have the option to use doctors, hospitals, and providers outside of the network without a referral for an additional cost. Premiums and deductibles associated with this plan type are usually higher, but that comes with greater flexibility.
A type of health insurance plan that usually limits coverage to providers who work for or contract with the HMO. This type of plan generally won't cover out-of-network care except in an emergency. You’ll likely pay less in premiums for an HMO compared to a PPO – sometimes significantly less – but you will sacrifice flexibility for the lower upfront costs.
An HDHP can vary depending on the specific plan. These plans typically have lower premiums, so they cost less – as long as you don’t require a lot of medical care. The deductible is usually higher compared to other plans, and you need to pay this amount in full before the insurance provider chips in. To take advantage of a health savings account (HSA) you must be enrolled in a HDHP.
A type of health plan where you must select a primary care physician that belongs to the plan’s network, but have the option to use out-of-network providers for an additional cost.
A managed care plan where services are covered only if you use doctors, specialists, or hospitals in the plan’s network (except in an emergency).
Regardless of which health insurance plan type you select, chances are you will incur out of pocket costs – in the form of deductibles, copays, coinsurance, etc.
Tax-advantaged benefit accounts – such as health savings accounts (HSAs) and flexible spending accounts (FSAs) – allow you to save money, tax-free, for eligible healthcare expenses.
Simply enroll in one of these accounts to reduce your taxable income and stretch your dollars an average of 30% further (depending on your tax bracket).
For information about the health insurance plan options and associated tax-advantaged benefit accounts available to you, please speak with your employer and refer to your plan documents.