Asked by Tanya on May 2, 2018
Answered by Amy , Hiring Expert at Textron Inc., on May 2, 2018
A health savings account (HSA) is a pre-tax savings account for those enrolled in high deductible health plan. Money in the savings account can help pay for the deductible, as well as current and future medical expenses. With an HSA account, your health insurance premiums are normally much lower than a typical PPO plan. However, because of this you may have a higher major medical deductible. The IRS sets a limit on how much you can put into it each year. You can usually find the limits in your health plan documents and at irs.gov. However, there is not a limit to how much you can save over time.
A PPO, which stands for Preferred Provider Organization, provides maximum benefits if you visit an in-network physician or provider, but still provides some coverage for out-of-network providers. With a PPO your monthly premium will be higher and you will have to meet your deductible before your health insurer starts paying. You will also have to pay more out-of-pocket if you visit a provider who is not part of your PPO network.
An HMO, or Health Maintenance Organization, typically offer lower costs, but you will have a more restrictive provider network, and you will have to coordinate your medical care through a primary care physician. HMO’s are the lowest out-of-pocket costs and monthly premiums. Depending on the plan, you may have no deductible or a low deductible. However, you will need to be prepared to pay 100% of costs if you use a provider who is not part of your HMO network.
Hope this helps!