Main types of insurance plans

  • Usually includes an annual deductible and coverage begins after it has been fully paid. Coverage is sometimes available prior to meeting that deductible for services such as doctor visits (which require a low Co-pay).
  • Includes a network of physicians, hospitals, and specialists that have agreed to offer services at a reduced fee.
  • No referral from a primary care physician is required to see a specialist.
  • Allows the flexibility to visit providers outside the network for a slightly higher fee and a separate deductible.
  • Often requires a claim to be filed before your benefit reimbursement can be made.
  • Co-pays and monthly premiums are typically higher than that of an HMO plan (see below) due to the flexibility.
  • HMO plans usually have co-pays and monthly premiums that are lower than those of a PPO plan.
  • There is a network of physicians, hospitals, and other specialists offering services at a reduced fee.
  • The patient chooses a primary care physician who helps coordinate the patient’s care. This physician must provide a referral for the patient to see an in-network specialist.
  • No coverage for providers outside of the HMO network of physicians, hospitals, and specialists, meaning you’re charged the full fee if you choose to visit them, with the exception of medical emergencies.
  • Few or no claims to be filed, since the insurance company pays the provider directly.
  • Tax-favored savings account that can be used with an HSA-eligible health insurance plan to help make healthcare more affordable.
  • To contribute to an HSA, you first have to enroll in a High Deductible Health Plan – an IRS name for a certain type of health insurance plan. With these types of plans, premiums are lower than standard health insurance policies, but the deductible is higher.
  • Once you purchase the eligible health plan, you go to a banking institution to open this account.
  • Intended for individuals to put away savings that will be used for qualifying health-related expenses, such as co-pays and deductibles.
  • Funds are in an interest-earning, tax-free account with no use-it-or-lose-it limits; that means if you don’t spend all of your contributions in a year, the balance rolls over to the next year and continues to build interest, while maintaining its tax-free status.
  • Money is meant to be withdrawn for medical expenses. It can be withdrawn to be spent on non-medical expenses, but will be taxed as normal income and may be subject to withdrawal penalties.
  • The Affordable Care Act brought some changes to this option starting in 2011. As a result, over-the-counter (OTC) medications without a prescription no longer qualify for HSA spending. Also, the penalty for withdrawing money from the HSA account for non-qualified expenses increased from 10 percent to 20 percent1.
  • 2014 HSA Contribution Limits, Deductibles, and Out-of-Pocket Expenses:
    • HSA holders can choose to save up to $3,300 for an individual and $6,550 for a family (HSA holders 55 and older get to save an extra $1,000 which means $4,300 for an individual and $7,550 for a family). These contributions are 100% tax deductible from gross income.
    • Minimum annual deductibles are $1,250 for self-only coverage or $2,400 for family coverage.
    • Annual out-of-pocket expenses (deductibles, co-pays and other amounts, but not premiums) cannot exceed $5,950 for self-only coverage and $11,900 for family coverage2 .

  1. “Frequently Asked Questions,” HSA Resources, (accessed 1 May 2013)
  2. U.S. Department of the Treasury, (accessed 15 October 2014)

As a result of the Affordable Care Act there are different levels of plans with increasingly more benefits and higher costs. These plan levels are: Bronze, Silver, Gold, and Platinum.

There is an additional level for “catastrophic” or very basic plans. To be eligible to purchase these lower-priced plans, you must be under 30 years of age or face financial hardship.

Individuals are able to view and buy health insurance either on the Health Insurance Marketplace (also known as the Exchange) or through an insurance carrier such as Humana. The Marketplace is a website where you can compare different insurance policies from a variety of insurance companies. Depending on your income you may be eligible to purchase a plan at an even lower cost. The open enrollment period for this year will begin Nov. 15, 2014, and runs through Feb. 15, 2015, for coverage in 2015. It’s mandatory for individuals to have health insurance, and there are tax penalties for those who don’t enroll.


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