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Types of Healthcare Coverage in U.S.

Flexible Spending Account (FSA)

Flexible spending accounts allow members to use pre-tax dollars for certain eligible medical and dependent care expenses. Members fund their FSAs with contributions that come out of their paycheck.

Health Maintenance Organization (HMO)

A Health Maintenance Organization (HMO), is a health care system that assumes or shares both the financial risks and the delivery risks associated with providing comprehensive medical services to a voluntarily enrolled population in a particular geographic area, usually in return for a fixed, prepaid fee.

Health Savings Account (HSA)

Health savings accounts (HSA) allow members to save money into tax-advantaged accounts. Qualified contributions made to HSAs are tax-deductible, and funds withdrawn to pay for qualified medical expenses are tax-free. More information about qualifying expenses and the HSA regulation, Section 213(d) of the IRS Tax Code is available on the IRS website.

Health Reimbursement Arrangement (HRA)

Health reimbursement arrangements (HRA) are accounts that employers can establish for employees to reimburse a portion of their eligible family members' out-of-pocket medical expenses, such as deductibles, coinsurance and pharmacy expenses.

Indemnity and Traditional Coverage

Traditional insurance provides members with the most freedom of choice, and offers the most control over your health care. Traditional insurance, also known as indemnity or fee-for-service, allows members to select any provider

Point-of-Service (POS)

A point of service plan, or POS plan, is a type of managed care health insurance system. It combines characteristics of both the HMO and the PPO. Members of a POS plan do not make a choice about which system to use until the point at which the service is being used. Point of service plans (POS) are sometimes called an ‘open ended HMO’ or an ‘open ended PPO’.

Preferred Provider Organization (PPO)

A preferred provider organization (PPO) is a healthcare benefit arrangement designed to supply services at a discounted cost by providing incentives for members to use designated healthcare providers who contract with the PPO at a discount. Members enrolled in PPO coverage can also receive coverage for services by healthcare providers who are not part of the PPO network.

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