Health Maintenance Organization

• A health-maintenance organization (HMO) is a managed-care organization that provides a form of health coverage offered through hospitals, doctors and other providers with whom the HMO has a contract. Employers with 25 or more employees must offer HMO options as directed in the Health Maintenance Organization Act of 1973.
  You must choose a primary care physician, through whom you access medical services. You can access health care only through those medical professionals, who treat you according to the HMO guidelines and restrictions.
  
  

Preferred Provider Organization

• A preferred-provider organization (PPO) is a managed-care organization in which a group of doctors, hospitals and others have an agreement with an insurance company or a third-party administrator to provide health care to its members. This subscription-based coverage is available at a substantial discount from the medical professionals who are contracted by the PPO.
  
  

High-Deductible Health Plan

• A high-deductible health plan (HDHP) is a health insurance plan with a lower premium and higher deductibles than a conventional insurance option; the minimum deductible is $1,150 for individuals and $2,300 for families. HDHPs got a boost with the Medicare Modernization Act in 2003, which granted tax benefits for money set aside to pay for medical expenses. This benefit was granted only to those who enrolled in a HDHP plan with a minimum deductible of $1,000 for individuals and $2,000 for families.
  
  

Indemnity Insurance Plan

• An indemnity insurance plan reimburses medical expenses without any stipulation regarding the service provider, though the coverage may be limited. Different methods are used to specify the amount to be reimbursed, ranging from full reimbursement to a percentage of the actual expenses or specific amounts paid on a daily basis.
  Unlike PPOs or HMOs, the indemnity plan gives you the freedom to choose your own doctor or hospital. This kind of plan costs more, but it offers more control over your care.
  
  

Medical Savings Account

• A medical savings account (MSA) is a type of savings account in which deposits can be made specifically for health-care expenditures. The withdrawals from the MSA are tax-free if they're spent for medical expenses. The MSA must be linked to an HDHP, and the funds can be used at any time (there's no use-it-or-lose-it provision).