Welcome to part four of our series in insurance terminology you should definitely know — especially if you’re a new buyer of any kind of insurance. It never hurts to brush up when you’re rusty. Today we will look at a few terms like HMO, HRA, and HSA that are abbreviated to become more confusing than they have to be.
What is an HMO?
HMO stands for “Health Maintenance Organization.” When you see HMO on your plan, it means you can only go through the specific HMO providers outlined by that plan. Usually, this means choosing one doctor in the network to be your primary care physician. Should you need to see a specialized doctor, your primary care physician will provide you with the right referral.
What is an HRA?
HRA stands for “Health Reimbursement Account.” An HRA is usually a benefit shared through an employer, and it allows you to deposit money from your paycheck to funnel toward healthcare expenses as needed — but this is purely a savings account with no tax benefits. It’s good for people who have trouble hanging onto their money for more than a day.
What is an HSA?
HSA stands for “Health Savings Account.” Another benefit normally shared through an employer, but an HSA normally allows the user to avoid federal taxes on anything deposited into the account. Funds deposited into an HSA do not need to be spent in a given timeframe, which makes them a great way to complement insurance.
What is a PPO?
PPO stands for “preferred provider organization.” A PPO is similar to an HMO, except they usually cost more through higher premiums — and also provide limited coverage for when healthcare providers are used outside of the network. These plans are great for people who like to travel or move often for work, because they still offer some coverage in case you’re not where you normally are.