Most Americans get health insurance through their jobs or are covered because a family member has insurance at work. This is called group insurance. Group insurance is generally the least expensive kind. In many cases, the employer pays part or all of the cost.

Some employers offer only one health insurance plan. Some offer a choice of plans: a fee-for-service plan, a health maintenance organization (HMO), or a preferred provider organization (PPO), for example:
What happens if you or your family member leaves the job? You will lose your employer-supported group coverage. It may be possible to keep the same policy, but you will have to pay for it yourself. This will certainly cost you more than group coverage for the same, or less, protection.

A Federal law makes it possible for most people to continue their group health coverage for a period of time. Called COBRA (for the Consolidated Omnibus Budget Reconciliation Act of 1985), the law requires that if you work for a business of 20 or more employees and leave your job or are laid off, you can continue to get health coverage for at least 18 months. You will be charged a higher premium than when you were working.

You also will be able to get insurance under COBRA if your spouse was covered but now you are widowed or divorced. If you were covered under your parent’s group plan while you were in school, you also can continue in the plan for up to 18 months under COBRA until you find a job that offers you your own health insurance.

Not all employers offer health insurance. You might find this to be the case with your job, especially if you work for a small business or work part-time. If your employer does not offer health insurance, you might be able to get group insurance through membership in a labor union, professional association, club, or other organization. Many organizations offer health insurance plans to members.

There are five types of health plans available in the marketplace:

1. Traditional Indemnity

People who want pure freedom in the selection of their medical providers and who are willing to pay more for insurance may choose these plans.
Advantages:

• The plan allows an individual to choose any health care provider they wish
• They have few restrictions

Disadvantages:

• There are no financial incentives to reduce patient financial responsibility
• The absence of cost containment features creates high premiums and employee contribution costs
• You may be subject to Usual and Customary reductions if the health plan feels your physician charged too much

2. Health Maintenance Organization (HMO)

These plans have become very popular due to their low cost and comprehensive health insurance coverage.
Advantages:

• There are no deductibles or coinsurance expenses, only a co-payment
• The cost of premiums and employee contributions are low due to the high presence of cost containment features
• Paperwork is practically eliminated for the patient as there are no claims to submit and no Explanation of Benefits (EOB) to receive

Disadvantages:

• You can only see a physician within the HMO network
• You must select a Primary Care Physician who acts as a “gatekeeper” to specialists
• There is a larger number of cost containment elements in the plan (authorizations, referrals, etc.)

3. Preferred Provider Organization (PPO)

These plans offer financial incentives for staying within the plan’s network of physicians. The cost of this plan is “higher than average.”
Advantages:

• The plan offers financial incentives to see physicians in their preferred provider network
• Many services require the patient to pay just a co-payment, such as for outpatient visits or prescriptions
• A person may continue to see a physician who is not part of the preferred provider network, but at a reduced payment and higher out of pocket cost.

Disadvantages:

• Deductibles and coinsurance do apply for many services, such as hospitalizations and out-of-network services
• Claims are submitted by the medical provider, making it important for the health plan to pay the claim correctly
• The premiums and employee contribution costs are higher than those of any HMO, but lower than a Traditional Indemnity Plan

4. Point of Service Plan (POS)

These plans are considered a hybrid of an HMO and PPO plan. The cost of this plan is slightly more expensive than an HMO Plan, but less or similarly priced to a PPO plan.
Advantages:

• Like a PPO Plan, this POS plan lets you go out of the network,
• Your cost of going out of network, may be expensive, unless you obtain approval from your primary care physician

Disadvantages:

• Like an HMO plan, you must select an in-network physician to be your primary care physician
• If you do go out of network without a primary care physician referral, you may have to pay a higher share of the costs

5. Health Savings Account (HSA)

These plans are the next generation of Medical Savings Accounts (MSAs). An HSA is a tax-sheltered savings account similar to an IRA, but specifically created for medical expenses and works in conjunction with a high deductible HSA eligible health insurance plan.
Advantages:

• Having an HSA with a high deductible will typically have a lower premium
• Pre-tax money is deposited each year into your HSA and can be withdrawn anytime for qualified health expenses
• Your employer can contribute to your HSA

Disadvantages:

• The HSA is tied to the IRS Code
• If you withdraw for non-qualified medical expenses or non-medical expenses, you would pay taxes on that money