When you start out looking for group coverage plans, you have to realize that you will see many of them and it might be pretty confusing. Broadly speaking you might run into HMO’s and PPO’s, but you cannot clearly distinguish between the two due to the overlapping characteristics.
There was time when all you had to do was go to your nearest doctor and get a prescription. Your insurance provider would cover all or a portion of the costs as agreed upon in the insurance policy. This was called fee for service or traditional indemnity coverage. But these days it is not like that. It is all about managed care nowadays. Under managed care which includes HMO’s and PPO’s, the insurance company pays the medical centre directly for all or a portion of the costs incurred. And obviously on each visit you would have to pay your co pay. In some situations, the insurance company will pay the doctor a fixed amount irrespective of the number of times that particular employee goes to the clinic. And the costs will be compensated for by those who do not go to the clinic at all.
Health maintenance organizations
These are the cheapest of the lot. They do not offer much flexibility, but the costs are negligible. In HMO’s you will have to select your primary care provider (PCP) who will be your one point of contact for all your medical needs and conditions. But in cases of emergency, you can always go to the nearest medic. You will also be required to pay small co-pay after every visit. The HMO will cover all the service cost and medical equipment cost.
Preferred provider organizations
PPO’s offer much more flexibility than a HMO. But the costs are slightly higher and even the co-pay will depend on whether you deal within the network or out of it. But all the same you do have the option of venturing outside your network to get your medical needs catered to.
Health savings account
This is not an insurance policy, but a means to save up in order to provide for emergency medical care. Federal legislation authorized in 2003 created the HSA. This plan is usually associated with a high deductible insurance plan. High deductible plans are cheaper but you will have to pay a huge sum in case of treatment from out of your pocket. Its something like a public provident fund. The money that goes into the HSA is tax free. Both the employer and the employee can contribute. But in case the employee wants to remove the money, he has to incur a penalty if it is not for medical purposes. But this penalty will be waived if the employee is 65 or above or if he or she has passed away.
And remember to compare group health insurance quotes before you purchase insurance.