What is health insurance?
Health insurance is a contract between you and your insurance company. You buy a plan or policy, and the company agrees to pay part of your medical expenses when you get sick or hurt. A typical health insurance policy also covers preventive care, such as vaccines and checkups, to keep you healthy. To buy insurance, you will pay a set amount – a premium – usually every month and you will have other costs, such as deductibles, co-pays or co-insurance. Health plans will typically provide access to a provider network – a group of doctors, clinics, hospitals and other medical sites. If you seek care outside of this network of providers, your insurance may not pay for the services or pay a much lower amount.
There are many different types of networks and benefit payment options.
Health Maintenance Organization (HMO) Is a type of health insurance plan that usually limits coverage to care from doctors who work for or contract with the HMO. It generally won’t cover out-of-network care except in an emergency. An HMO may require you to live or work in its service area to be eligible for coverage. HMOs often provide integrated care and focus on prevention and wellness.
Preferred Provider Organization (PPO) This is a type of health plan that contracts with medical providers, such as hospitals and doctors, to create a network of participating providers. You pay less if you use providers that belong to the plan’s network. You can use doctors, hospitals and providers outside of the network for an additional cost.
Exclusive Provider Organization (EPO) This is and arrangement consisting of a specified group of providers who have a contract with an insurer, employer, third-party administrator, or other sponsoring group. A health plan utilizing and EPO network typically restricts all coverage for payment and reimbursement to services rendered within the network except in qualified emergency situations.
Health Reimbursement Account (HRA) These are employer-funded group health plans from which employees are reimbursed tax-free for qualified medical expenses up to a fixed dollar amount per year. Unused amounts may be rolled over to be used in subsequent years. The employer funds and owns the account. Health Reimbursement Accounts are sometimes called Health Reimbursement Arrangements.
Health Savings Account (HSA) This is a medical savings account available to taxpayers who are enrolled in a qualified High Deductible Health Plan. The funds contributed to the account aren’t subject to federal income tax at the time of deposit. Funds must be used to pay for qualified medical expenses. Unlike a Flexible Spending Account (FSA), funds roll over year to year if you don’t spend them
Flexible Spending Account (FSA) This is an arrangement through an employer to pay for out-of-pocket medical expenses with tax-free dollars. These expenses include insurance copayments and deductibles, prescription drugs, insulin and medical devices. You decide how much of your pre-tax wages you want taken out of your paycheck and put into an FSA. You don’t have to pay taxes on this money. The employer’s plan sets a limit on the amount you can put into an FSA each year.
There is no carry-over of FSA funds. This means that FSA funds you don’t spend by the end of the plan year can’t be used for expenses in the next year. An exception is if your employer’s FSA plan permits you to use unused FSA funds for expenses incurred during a grace period of up to 2.5 months after the end of the FSA plan year.
We are work with all the major carriers offering benefits throughout Colorado. Please contact one of our certified specialists to help you navigate through the vast array of carriers, plans and payment options.