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If you've lost your job, don't panic yet about losing your health coverage, too. You could be eligible for the continuation of your health insurance benefits.
A federal law known as COBRA (short for the Consolidated Omnibus Budget Reconciliation Act of 1985) provides a vital bridge between health insurance plans for qualified workers, their spouses, and their dependent children when their health insurance might otherwise be cut off. Because of that security, COBRA has been hailed as a much-needed safety net for families in the midst of crisis, such as unemployment, divorce, or death.
Continue reading "Know Your COBRA Rights" »
What determines the cost of a health policy?
Most Group health insurance plans do not use underwriting for individual plan participants. Once the Group is offered health insurance coverage, individuals who are members of the group automatically qualify for the insurance (often with open enrollment periods to switch coverages at a particular time during the year).
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What is the difference between coinsurance and copayment?
On occasion, these terms have been used interchangeably. However, it is preferable to define the two terms differently, despite their similarity of purpose. Under a copayment or copay provision, the insured usually is required to pay a set or fixed dollar amount (e.g., $10, $20, or $30) each time a particular medical service is used. Copay provisions are frequently found in medical plans offered by health maintenance organizations (HMOs) where a nominal copayment is applied to each office visit and to each prescription that is filled.
What is the coinsurance clause in medical expense plans and how does it work?
Coinsurance, sometimes called "percentage participation," requires the insured to share in the cost of medical care. Under an 80/20 coinsurance provision, the medical expense plan pays 80 percent of eligible medical charges above any deductible. The insured is required to pay the remaining 20 percent. Other coinsurance arrangements, e.g., 70/30 or 90/10, are sometimes used. In the event of large or catastrophic medical expenses, an insured might suffer severe financial hardship due to the operation of the coinsurance clause. To compensate for this possibility, many major medical expense plans contain a coinsurance cap, or stop-loss limit. This provision places a limit on the insured's out-of-pocket costs in a given year arising from the operation of the coinsurance clause. The size of the coinsurance cap generally ranges from $2,000 to $3,000, depending on the plan, although limits as low as $1,000 are sometimes used. Once the coinsurance cap has been reached, all eligible expenses above this amount are paid in full, up to the plan's overall limit of coverage.
What are some common cost-containment procedures used by insurance companies?
In order to curtail health insurance costs from spiraling out-of-control, most insurance companies have instituted a variety of cost-containment features to their Individual and Group health insurance plans. Common cost-containment procedures, under which coverage may be denied or restricted, include:
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What kind of exclusions and limitations might be in my health plan?
There are a variety of exclusions and limitations with respect to health insurance. Common exclusions include pre-existing conditions (subject to portability of insurance as discussed below), substance abuse, attempted suicide, mental illness, reimbursement through a Workers' Compensation insurance program, cosmetic or elective surgery and procedures, optical and dental coverage, prescription medicine, and procedures determined to be preventive care.
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What services and items might be paid for under my health insurance?
Medical expenses as the result of accident, illness, injury, and disease are typically covered by medical insurance. The particulars of how much coverage for each expense incurred is determined by the provisions of the particular health insurance policy.
Typically doctor visits, surgeon and surgery expenses, costs of hospitalization, and follow-up therapy are covered by health insurance. Some plans provide for psychiatric care, drug and alcohol rehabilitation programs, and prescription medicines.
What types of group health insurance coverages are available?
Group health insurance makes individual coverages available on a group basis. A primary advantage is the purchasing power of the group that achieves reduced acquisition costs for the insurance company. The insurance company is then able to reduce the rate it charges to provide insurance for each individual member of the group. The Group is in a better position to bargain with the insurance company for additional benefits for its members. There are a variety of types of group health insurance plans, the major distinctions being the mechanism used for purchasing the insurance. Common varieties of group health insurance plans include:
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What types of individual health insurance policies are available?
There are a variety of policies which insurance companies offer on an individual basis. Some of the more common types of policies include:
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How can I get health coverage?
Employer-sponsored group insurance
Millions of people obtain their insurance through their employment. Upon reaching the eligibility requirement (such as a full-time employee working more than 40 hours per week for a six month continuous basis), the employee becomes covered under the employer's group insurance policy and the employee is issued an insurance certificate or health insurance card. Medical insurance is a very common fringe benefit of employment. Some employers will provide coverage solely for the employee, some employers pass along the cost of dependent coverage to the employee, while other employers pay the entire cost of medical insurance for the employee and his/her family.
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The difference between primary and secondary coverages.
Since many people have available medical insurance from more than one plan (such as two employed spouses covered under group health insurance plans), insurance companies do not want insureds to profit through their health insurance. To prevent double recovery, most health insurance plans have provisions which determine how primary versus secondary coverage will be determined.
The basic difference between individual and group health insurance coverages
With a group health insurance policy, the group is the master insured and the insurance company contracts with the group. Insurance certificates, issued to a participating member, act as your policy. Often group health insurance costs less than would have been charged had the insurance company sold individual policies to each member separately. In addition, group health insurance often contains special coverages that are not available or are very expensive on an individual basis. The purchasing power of the group makes this economically feasible.
If you've lost your job, don't panic yet about losing your health coverage, too. You could be eligible for the continuation of your health insurance benefits.
A federal law known as COBRA (short for the Consolidated Omnibus Budget Reconciliation Act of 1985) provides a vital bridge between health insurance plans for qualified workers, their spouses, and their dependent children when their health insurance might otherwise be cut off. Because of that security, COBRA has been hailed as a much-needed safety net for families in the midst of crisis, such as unemployment, divorce, or death.
Continue reading "Know Your COBRA Rights" »
What determines the cost of a health policy?
Most Group health insurance plans do not use underwriting for individual plan participants. Once the Group is offered health insurance coverage, individuals who are members of the group automatically qualify for the insurance (often with open enrollment periods to switch coverages at a particular time during the year).
Continue reading "What determines the cost of a health policy?" »