Understanding How Health Care Financing Works

A new health insurance plan year has just kicked off, so you may be getting questions from your employees about how their health plans work.

At Further, we know that while health care finance can feel complicated, it doesn’t have to be complicated. We're committed to helping people seamlessly manage their money, health and life.

Now is the perfect time to help your employees improve their health care insurance knowledge. When people understand how to be better consumers of health care, they can make the most of their health spending accounts.

To jump start that learning, we’ve developed How it works: the health care spending process, which walks through the four steps of the health care financing cycle. Your employees’ understanding of health care spending will go from 0 to 60 with this simple-to-read graphic illustration that brings the process to life.

Here’s a quick overview:

Feet with arrows pointing in two directions

Plan selection

By this time, your employees have already chosen a health plan that fits their specific situation. Whether it’s an HSA-eligible plan or a preferred provider organization (PPO), there are certain basic terms that all health care consumers need to understand to pay for and use these plans.

Paying (and saving) for health care

There are several payment options that most employees can choose from to help pay or save for future health care-related expenses. These options – HSA, FSA, HRA and Limited Purpose FSA or HRA – each have their own advantages. Beneficially, all have tax advantages. More in-depth information can be found here.

Person pulling money out of a wallet
Person getting a blood pressure reading

Visiting a provider

If there is an area where employees can get most frustrated, it may be understanding whether a specific health care provider has a contract with a chosen plan. While consumers can choose any health care provider, if cost is an issue, it is imperative that employees understand the difference between in-network and out-of-network providers and the financial ramifications of choosing a provider from either category. This is especially true if a new health plan is offered in the new year.

The paperwork

Is there anyone who likes paperwork? The paperwork a consumer receives after seeing a provider is designed to offer explanations and transparency. Knowing how the paperwork all works together to support the payment process will help in understanding.

Person doing paperwork


Take a look at the infographic and consider passing it on to your employees. We hope it helps them gain a better understanding of key terms – and when they’ll most likely hear them – as they use their health insurance.

P.S. Your employees want to dig in even deeper? We have a complete glossary of terms that provides even more explanations, helping them spend wisely every day!

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