Health Insurance Questions & Answers
- How do you get protection in the form of health insurance?
As well as being involved in group insurance plans, government aided and sponsored programs like Medicare and Medicaid, organizations like Blue Cross/Blue Shield, health maintenance organizations (HMOs) and preferred provider organizations (PPOs) can all be used to cover any individual seeking health coverage. There is also the option of private insurance, or credit unions and other professional associations if none of the above are to your liking.
- What are the benefits of group insurance over individual insurance?
Most employers will seek to obtain health insurance for its workforce, so group insurance is perfect for their needs as no medical exams are required. Employees with health issues, and who would struggle to obtain individual insurance are guaranteed coverage under a group plan. New employees may find that there are restrictions placed on them, but usually all members of that particular workforce will become insured the moment they become eligible. Also, because the insurance company benefits from so many clients, a group policy will work out much cheaper per head than a comparable individual plan. Finally, group policies trump individual ones for benefits and flexibility.
- In terms of group insurance, what types are offered by employers?
Most employers offer four different types of insurance (each with variations). They are; life insurance, (A, D & D) or accidental death & dismemberment, health or medical and disability insurance. Occasionally, you will have an employer that offers extra coverage like travel accident, dental insurance and optical insurance.
- How does a labor union go about providing group insurance?
They can do this via a policy issued to the union, with the union being proclaimed as the policyholder. It can also buy group insurance either for members who belong in the same company, or ones that are in different workplaces. Any vocation that potentially involves working for several employers in a year such as construction will benefit enormously due to union-bought group insurance. Yet, despite all this, not many unions purchase group life insurance, instead they prefer to negotiate with employers in order to procure insurance for their members. This leads to union members being the beneficiaries of group insurance plans paid for by several different employers.
- What is the function of an HMO?
A health maintenance organization (HMO) is responsible for its members insurance, giving them coverage in return for a fee. The members agree to pay a set amount over a period of time, and enjoy full health insurance.
- What is the function of a PPO?
A preferred provider organization (PPO) works in conjunction with healthcare professionals such as doctors and hospitals, providing medical care at rates agreed by all parties, usually at discount prices.
- Does an employer have the ability to deal directly with an insurance Company?
Yes, an employer can directly buy group health insurance with the aid of a group sales representative. The problem is that the whole insurance process is extremely complex, with premium rates varying wildly from one insurance company to the next, and the cover provided usually has different stipulations. This makes shopping around almost impossible, except for extremely specific purchases.
As a result, most employers prefer to use a middleman to ensure they get the insurance they desire. Small employers in particular, require professional help, otherwise they would be out of their depth. This expert middleman can help them discover the type of coverage they need, how much they are able to spend, and find a prudent way of spending this money, whilst ensuring that the employer gets the best quote available by using their skills to shop around the maze that is health insurance.
- Define a 'risk'?
The insurance company takes a 'risk' when it insures a group because there is the potential for the cost to outweigh the income generated from the group. They calculate this before deciding if they should agree to give coverage to a group. As every group is likely to contain members with poor health, the company assesses the risk involved and charges what they feel is a fair price for coverage. This is acceptable for the group as it is likely that some of them would either have to pay even more, or else have no chance of getting any kind of insurance due to ill health.
- What can influence insurance plan designs?
Any employee who is deemed to meet the acceptable standards for participation in an insurance plan is said to be eligible. As these definitions depend completely upon a particular employer's decision, being eligible in one company does not mean you will be in another.
- Do insurance companies omit particular employees from group policies?
There is usually an understanding between an insurance company and the group being insured that no full-time employee gets left out. What is standard practice amongst insurers however is for every employee who is involved in the group plan to register for a contributory plan within the required timeframe, and also to be an active employee the day the plan comes into effect.
- Does Federal Law stipulate that all employers must purchase group insurance for its employees?
At this moment in time, there is no law forcing employers to buy group insurance. However, Congress has spoken about initiating a law that will require every employer to provide their workers with a minimum amount of health insurance, and it is likely that there will be alterations in this field to protect the workers.
- Define a mandate benefit?
This is a particular, specialized type of coverage that all insurance companies must, by law, include in their contract. A good example of a mandate benefit is insurance for substance-abuse treatment. Other benefits of this kind are mental and nervous disorders, and cover for new-born kids.
- Is there an upper or lower limit for the amount of employees allowed to be included in a group insurance plan?
There is usually a lower limit of about ten employees allowed to be involved in any group insurance plan. This is to prevent the selection of a handful of health risks amongst a smaller group. Having a larger group generally reduces the risk involved for the insurance Company therefore, there can be a limitless amount of people covered by a group insurance plan.
- What is a base plus plan?
This is a health insurance plan with two sections. The first section is coverage for the basic medical requirements such as price of hospital, doctor's fees, x-rays and surgical procedures. Though you may be limited to the number of days you can spend in hospital, or types of surgery, none of these items will cost you anything after you have been insured, as all the bills will be settled by your insurer.
The second section is known as major medical insurance and has less in the way of limits, but you will not be refunded your medical costs until a deductible has been issued.
- What are the pros of a Base plus plan?
For any employee, the base plus plan suits them better due to the lack of deductibles involved in the first section, basic medical.
- Comprehensive plan: What is it and how does it benefit you?
As the name implies, comprehensive covers the vast majority of medical expenses, and only uses one type of payment. No employee can claim any refund on expenses that are covered until a deductible is issued, and coinsurance comes into the equation for covered expenses until the employee has reached the point where they have paid their limit in out-of-pocket expenses. Employees have to share from the start regarding the cost of medical expenses, so this plan is an inducement for them to be more prudent with the health-care they look for. Basically, it is a deterrent to anyone looking to fleece a company.
- What is covered in terms of outpatient costs?
It covers a trio of expenses: Lab and x-ray research, surgical procedures and emergency treatment.
- What does a group health insurance plan cover in terms of services?
Base plus and comprehensive insurance plans are different depending on the insurance company, but there are a certain number of services that are covered, regardless of the company:
- Fees charged by doctors in general
- What the hospital charges for having a patient stay in the ward per night
- The cost of having surgical procedures
- The fees due to any nurses for their services
- When you receive treatment at home
- Any work performed by a physiotherapist
- The price of anesthetics and their administration
- X-rays, radium treatment, or any other cost associated with diagnostic laboratory procedures
- The administration of, and use of Oxygen
- The cost of blood transfusions
- Prescription drug and medicines
- Cost of any ambulance used
- Cost for rental of any mechanical equipment used for therapeutic purposes
- Any type of artificial or prosthetic limb, though the cost of replacement is not included in this
- Any casts, crutches, splints, braces and other equipment necessary for setting broken bones or straightening teeth etc.
- Cost of the rental of a wheelchair or any similar device
- Define a deductible?
A deductible is simply an amount predetermined by the insurance company that you must pay before they start refunding your expenses. A high deductible naturally means you will pay less for your health insurance.
- Does the deductible have to be paid by all employees in a group insurance plan in order for them to be refunded?
Everyone who is covered under a group insurance plan is required to satisfy a deductible before any expenses incurred by the group are reimbursed. What normally happens though is that there is a specific family deductible included in order to cut the costs paid by the family or group in question. It is usually double or treble the amount of an individual deductible, with group expenses combined in order to meet the deductible requirement, ensuring a lesser deductible to be paid by all. Some insurance companies insist on one individual fulfilling the full deductible amount within the group deductible however.
- What is coinsurance?
Although it is not implemented in all group insurance plans, coinsurance is included in the vast majority, and it determines by percentage, how much the insurance company has to pay, and how much the insured person has to pay regarding covered expenses. 80 percent coinsurance is among the most popular coinsurance plans available, and simply means the employee will be liable for 20 percent of the covered expenses, with the insurance plan covering the other 80 percent.
- Define a covered expense, and what are its limits?
A covered expense is a legitimate expense incurred by the insured person under the terms of a group health insurance plan, but will be either fully or partially refunded by the plan. If for instance, you are insured and visit a doctor, you will be covered for their fee but only as far as the set limit outlined in your insurance plan. Therefore, this would be considered a covered expense, and it is worth remembering that insured expenses are not unlimited.
Regardless of whether you are using a base plan or a comprehensive plan, you will be limited on the amount of expenses you can incur. Also, deductibles and coinsurance can be added. Insurance companies like to put a cap on covered expenses by imposing a strict limit on the amount of money you will be reimbursed for particular surgeries or procedures. Another way to limit covered expenses is by only allowing a certain number of visits by nurses and doctors to home help patients, or by insisting on a standard charge.
- Is dental care covered by any health insurance plans?
Good quality dental care has not been covered by health insurance traditionally, as it was considered to be an expense that should be taken care of by the individual themselves. It was however, added to the health care plans of employees in the 1970s due to its spiraling costs. Depending on the employer, you can get dental coverage on your medical plan, or else it can be covered separately. Generally though, employers will cover its workers for essential dental work, which may be necessary for example after an accident. Other plans allow for coverage when the individual is forced to go to hospital for a serious dental procedure like removing wisdom teeth.
- What is direct repayment for dental care?
This is a dental program that is not insured, yet the employer decides to pay for an agreed amount of the dental expenses, for which the employee must have a receipt. This is a useful way for smaller companies to avoid the complex paperwork and sometimes prohibitive cost that can occur with an insured program. They realize that there is little in the way of risk involved as dental care is not prone to costly emergency procedures in the same way as health care sometimes is.
- Are you covered for all types of dental expenses?
Generally no. What happens with dental expenses is that they are divided up into three coverage groups. Level 1 covers your bi-annual examinations and cleaning, as well as any x-rays performed. Level 2 is regarded as basic services coverage and takes care of fillings, crown repairs, root canals, and other such procedures. Level 3 is considered to be major services and includes dentures and bridges and their replacement. As a means of emphasizing the message that prevention of major surgery is the best way of protecting yourself, Level 1 procedures to keep your teeth healthy offer far more in the way of reimbursement than either of the other two levels.
- How do employers cover vision care?
In general, health insurance plans will take care of injuries or ailments associated with your eyes, but do not cover anything like eye exams or contact lenses. Vision care is similar to dental care insofar as it is also a reasonably new benefit. Like dental care, it was once considered superfluous, but now, companies with the means to do so, can cover their employees with benefits that were at one time not even considered worthy of adding. It is usually covered by assigning a fixed amount for certain things like frames and lenses. As vision care is deemed to be a selective process, it is non-contributory.
- Do health plans cover all prescription drugs?
As a rule, employers will only cover drugs that are used in the treatment of illnesses or injury, with the requisite deductibles and coinsurance elements catered for. Drugs like those used for contraceptives or nicotine patches are considered frivolous and therefore, are not covered.
- What different drug plans are available?
There are numerous options, such as, mail order, open and closed panel and prescription drug plans.
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