1. A flexible spending account (FSA) generally allows an employee to:

Set aside pretax dollars for eligible medical expenses

An FSA lets employees fund eligible out-of-pocket medical costs with pretax dollars, subject to use-it-or-lose-it rules.

2. Under a capitation arrangement, an HMO pays a contracted provider:

A fixed amount per member per month regardless of services used

Capitation pays the provider a set fee per enrolled member each month, shifting some utilization risk to the provider.

3. A traditional fee-for-service (indemnity) medical plan generally:

Reimburses covered services with broad freedom to choose providers

A fee-for-service plan reimburses for covered services and lets the insured choose providers fairly freely.

4. Precertification (prior authorization) in a managed care plan is used to:

Review the medical necessity of a service before it is provided

Precertification reviews whether a proposed service is medically necessary before it is rendered to control costs.