What is Individual Health Insurance?
Individual health insurance is a policy that is made available to individuals and families, rather than to employer groups. Business can also offer individual health insurance to their employees, usually at a much lower rate.
What is Group Health Insurance?
Group health insurance is a medical plan that an employer purchases on behalf of employees. Typically the employer will pay at least 50% of the cost and the employee pays the remainder through payroll deduction.
What is Accident Health Insurance
Accident Health pays for accidental injury or illness. It can be purchased with a Critical Illness Rider to cover Chemotherapy, Cancer, HIV. This product is purchased on it's own, or in conjunction with a Individual Health policy. Accident Health can complement many of the high deductible gaps on individual health insurance.
What is a PPO?
A PPO or Preferred Provider Organization is a network of doctors and hospitals that have agreed to provide discounted services to an insurance company. A health insurance policy that includes a PPO will encourage you to use the PPO.
What is an HMO?
An HMO is a "Health Maintenance Organization". An HMO combines an insurance company with providers of medical care (Dr's, hospitals, etc.) HMO's are the most restrictive of all health plans where an insured must choose a Primary Care Physician (PCP). This must be chosen prior to enrolling in the plan and this Dr must be seen first before any specialty care is provided. There is generally no coverage for going to a provider outside the HMO network of providers, unlike a PPO, which provides coverage both in and out of network.
What is a POS?
A POS is a "Point Of Service" plan which is a hybrid of an HMO and a PPO. It's less restrictive than an HMO but more restricted than a PPO. A POS plan may or may not make you choose a PCP (see HMO above) and may or may not provide any out of network benefits.
What is an Indemnity Plan?
An indemnity plan is a health plan, which allows you to see any provider (Dr or hospital) you choose without having to pick one in a network. This is the least restrictive of all health plans but is generally the most expensive as well and is not currently a very popular choice for most.
What is an HSA?
An HSA is a "Health Savings Account" which is a tax sheltered account used to pay medical expenses now and in the future. In order to open this account you must have an HSA compatible health insurance plan. These plans are regulated by the state and federal government and must have minimum and maximum deductible amounts.
What is an HRA?
An HRA is a "Health Reimbursement Arrangement" which is an employer-sponsored arrangement. Unlike an HSA, this is not an account that funds are paid into, but rather an arrangement between the employer and employee. The HRA is set up to fund a portion or all of an employee's deductible, out of pocket, co-pay etc. By the employer taking a plan with a higher deductible or out of pocket these premiums are generally less freeing up money to help the employee fund this extra out of pocket.
What is a Premium?
A payment to an insurance company for health insurance coverage.
What is a Deductible?
The deductible is the amount you must pay before the insurance coverage will start paying benefits.
What is Coinsurance?
Coinsurance is the percentage of covered expenses you share with the insurance company after you have satisfied the deductible. 80/20 coinsurance means the insurance company pays 80% and you pay 20%. A policy will have a co-insurance maximum ceiling of say $2,000. So for a $20,000 hospital bill and a $5,000 deductible you will only be responsible for $2,000 remaining, even though 20 % of $15,000 is $3,000.
What is a Copayment or "Co-Pay"?
Copayment is sometimes used to describe coinsurance, although most of the time it is a fee you pay to access medical care without first having to satisfy your deductible. Co-Pays are optional benefits to your health insurance policy for things like office visits and prescriptions. An example would be a $75 co-pay for Emergency expense. You pay the $75 co-pay then your deductible applies. Co-pays are payments in addition to other expenses.
What is Out-of-Pocket Maximum (OOP Max)?
This is the maximum amount per calendar year you pay for covered charges. Once you reach the out-of-pocket maximum, the insurance company will pay the remaining covered charges at 100%. Not all company's include deductible and co-pays towards OOPs maximum.
What is a Pre-Existing Condition?
Legal definitions of pre-existing conditions vary by state, but in general, these are medical conditions that a person has been treated for, is receiving treatment for, or that a prudent person would seek treatment for, during a specified period of time immediately preceding the purchase of health insurance.