• Health insurance is insurance coverage that pays for health-related expenses, such as medical treatments due to illness or injury. Health insurance coverage is often considered an important job benefit since it can be very expensive and everyone is likely to need health care at one time or another. There are a variety of different types of health care plans that each function somewhat differently.
  
  

Traditional Insurance

• Traditional insurance is a type of health care insurance that allows the insured party to pick and choose doctors and visit specialists without getting approval from a doctor. Traditional insurance can offer more flexibility than other insurance plans that force users to use medical facilities that fall within a certain umbrella covered by the plan. Traditional insurance may carry higher premiums (annual costs) and higher deductibles (out of pocket costs to receive care) than other plans.
  
  

HMOs

• A health maintenance organization or HMO is a type of health care plan that provides care using a specific network of health care providers. HMOs attempt to reduce the cost of health care by reducing paperwork and streamlining the process of receiving care. This can be advantageous for those whose doctor and favorite facilities are within the network covered by the HMO. Medical care received outside the network of providers is not covered.
  
  

Point of Service

• Point of service or POS plans are similar to HMOs in that both have a certain network of providers that are generally cheap to use, but POS plans will cover certain types of care received from providers outside the network. Receiving care outside the network often requires paying your deductible and a certain portion of the cost of coverage, or coinsurance.
  
  

PPOs

• Preferred provider organization or PPO plans are similar to POS plans in that they offer more flexibility than HMOs, but less flexibility than traditional health insurance plans. With PPOs, there is a network of preferred providers but you can choose to receive care outside of the preferred network and incur higher co-payment costs. According to the U.S. Agency for Healthcare Research and Quality, "you may have to pay the total cost of care right away and then file a claim with your insurance company to get the allowable reimbursement for out-of-plan care."
  
  

HDHPs and HSAs

• A high deductible health plan or HDHP describes health insurance plans with a high deductible ($1,150 for self-coverage and $2,300 for family coverage, according to the U.S. Office of Personnel Management). High deductible health insurance plans are sometimes called "catastrophic" plans since they protect against expensive procedures but less expensive medical care may not exceed the deductible. Health savings accounts or HSAs are an option available to people with HDHPs that allow contributions to be made to an account on a pretax basis which can be used to cover health expenses, such as deductibles and coinsurance, as they arise.