BASIC TYPES OF GROUP HEALTH PLANS:
A Health Maintenance Organization (HMO) requires group members to obtain their health care services from doctors and hospitals affiliated with the HMO. Generally with an HMO members are required to designate a primary care physician who treats and directs health care decisions and who coordinates referrals to specialties within the HMO network. HMOs offer access to a comprehensive package of covered health care services in return for a prepaid monthly amount (or “premium”). Most HMOs charge a small co-payment depending upon the type of service provided.
A Preferred Provider Organization (PPO) does not require group members to designate a particular provider, however, if they use providers within their network, they will save the most money on their healthcare services. If providers outside of the network are used, it is possible that those services may not be covered at all, so it is a good idea to check first with your PPO. Keep in mind that deductibles must be met on this plan before some services will be covered. PPOs generally require a co-pay for physician visits.
A Health Reimbursement Account (HRA) combines high deductible/low premium health insurance with a tax favored savings account. Employers contribute to the savings account. Money in the savings account can help fund co-pays and other qualified expenses prior to the deductible being met. Money left in the savings account earns interest and can be carried to the next year.