Agent – A health insurance agent markets and sells health insurance to families on behalf of the insurance company. They typically work exclusively for one insurance company, but are not an employee of that insurance company. They are independent contractors who are paid a commission from the insurance company for each family that they enroll in that insurance company’s health plan. The commission is usually a percentage of the total premium that you pay to the insurance company. Agents do not usually charge an additional fee for their service, so the family insurance premium you pay is the same as it would be if you purchased your family health insurance directly from the insurance company.
Basic Hospital Coverage – Some families are only interested in purchasing health insurance to cover major hospital expenses in the event of an unforeseen accident or illness. They are willing to pay the full cost of doctor’s visits, prescription drugs and routine health care. The type of family health insurance that primarily protects against a “catastrophic” health care expense is called Basic Hospital Coverage. The premium for Basic Hospital Coverage is considerably less than more comprehensive family health insurance, thus allowing healthy families the ability to pay for the occasional expense of routine health care. This type of coverage may not be the most effective for families that have members with health issues or are at high-risk for medical conditions or the need for regular physician’s care.
Broker – A health insurance broker is very similar to an agent, but they represent multiple insurance companies. A broker will work with his clients to help them shop the family health plans available from multiple insurance companies. Working with a broker saves you time from dealing with multiple agents and insurance companies. Since a broker represents multiple insurance companies, they should provide an unbiased and knowledgeable opinion on which insurance company best meets the specific needs of your family.
Claims – Whenever you or a family member seeks medical care while insured under a family health insurance policy, the treating physician will file a claim with the insurance company to seek compensation and reimbursement from your insurance company. When using participating providers, you are often unaware of this claims process because the doctor will collect from you in advance your share of cost and file the claim on your behalf. In some cases, usually when using non-participating providers, you may need to pay the doctor in full at the time of service and then file a claim with the insurance company for reimbursement of the portion of the costs for which the insurance company is responsible.
COBRA – In 1986, Congress passed a law called the Consolidated Omnibus Budget Reconciliation Act (COBRA) that addresses the steps that must be taken by employers and insurance companies to provide continuation of health insurance coverage to any person that has been insured under the company’s group health insurance policy and is no longer eligible due to loss of job, retirement or prolonged illness. Federal COBRA only applies to companies with more than 20 employees, but many states have mini-COBRA laws that place similar guidelines on smaller companies. The length of time you or a family member may continue being covered under the group plan will depend on several factors, including the size of the company and the state in which your family resides.
Comprehensive Coverage – A comprehensive family health insurance policy will provide a full range of benefits, including regular office visits, prescription drugs, out-patient surgeries, preventive health care, dental and vision benefits, and much more. HMO plans typically offer the most comprehensive coverage with the lowest out-of-pocket costs to the family insured under this type of plan.
Co-payment – Most family health plans will require you to make a small payment toward any medical services provided that is part of your health insurance benefits. This amount is referred to as your co-payment and represents the entire amount for which you will be liable, regardless of the amount billed to the insurance company by the doctor. Co-payments are most frequently required for routine office visits and prescription drugs and are paid directly to the treating physician at time of service.
Employer/Employee Contribution – If your family is insured under your employer’s group health plan, the employer may offer to pay a portion of the total monthly premium required to insure all of your family members. Payment is made to the insurance company by the employer and any amounts that you owe toward your premium are collected from you by your employer. The amount that is paid by your employer and not collected from you is called the “employer contribution.” The amount that you pay toward insuring yourself or any family member is called the “employee contribution.” The employer contribution, combined with the employee contribution, equals the premium amount that is required from the insurance company for you and your family to be included on the group health plan.
Guaranteed Issue – Guaranteed issue means that the insurance company must accept and insure any person or family that applies for insurance and pays the required monthly premium. The most common example of this is group health insurance. If you wish to insure any family member under your group health plan, they may not be denied coverage by the insurance company, thus making the issuance of coverage “guaranteed.” Other types of guaranteed issue coverage include COBRA, high-risk health plans and Medicare. A few states, such as New York, have legislation that requires all individual and family health plans to be offered on a guaranteed issue basis. Guaranteed issue does not always guarantee that the insurance company will cover all medical expenses. Pre-existing medical condition waiting periods may also apply to guarantee issue health plans.
HIPAA – The Health Insurance Portability and Accountability Act of 1996 (HIPAA) is federal legislation designed to protect the consumer’s rights to health care access, portability, renewability, protect against health care fraud, and protect a patient’s privacy. Under federal HIPAA regulations, every state must provide access to health care to families that have lost their group health insurance or exhausted their COBRA benefits and are uninsurable due to a pre-existing medical condition of a family member.
In-network – An “in-network” doctor of medical facility has a contract with the insurance company that provides your family with health insurance. They have agreed to charge special “negotiated rates” to any patient that is a member of a health plan offered by the insurance company with whom they are contracted. Each insurance company has an extensive list of in-network doctors and many doctors may be on the in-network list of many different insurance companies. An in-network physician may not be contracted under every health plan offered by the insurance company. For instance, a physician may wish to contract with the PPO plan members of an insurance company, but may choose not to be part of the HMO network of physicians.
Negotiated Rates – A negotiated rate is the amount of compensation that has been agreed upon between the in-network health care provider and the insurance company. Negotiated rates are only available when your family uses physicians or health care providers that are on contract with your insurance company, also referred to as “in-network” providers. Your family will also benefit from these negotiated rates because the amount that you pay toward your deductibles and coinsurance is based on the rate that is billed to your insurance company.
Open Enrollment Period – If your family is insured under an employer sponsored group health plan, you will have an annual open enrollment period, during which time you can add dependent family members to the policy that are not currently insured under your group health plan. You may also make changes to your health plan choices during open enrollment. The open enrollment period lasts for 30 days per year and usually occurs during the month preceding the annual renewal of the policy between your employer and the insurance company. If you choose not to enroll family members in the group plan during this 30 day period, you will need to wait another year before you can add them again.
Out-of-Pocket Maximum – The out-of-pocket maximum is the most your family will need to contribute toward deductibles and coinsurance during a specific period of time, usually the calendar year. Once you reach this maximum, the insurance company will pay 100% of the applicable medical expenses for the remainder of that specified period of time. For family health plans with more than one insured member, the policy may have a family out-of-pocket maximum, which when reached provides full coverage to all family members insured under the same policy. Co-payments and premiums do not apply to the out-of-pocket maximum, and some covered services may also be exempt. The out-of-pocket maximum is usually increased substantially if you use non-participating health care providers.
Pre-existing Medical Conditions – This refers to a medical condition of any family member that existed prior to the effective date of your family’s health insurance coverage. A pre-existing medical condition can result in a reduction of benefits or waiting periods that will lower the amounts that are paid by the insurance company toward treatment of this condition, quite often to zero. It is your responsibility to claim pre-existing medical conditions to your insurance company at the time you apply for family health insurance. Failure to do so could result in the cancellation of coverage for the family member that has this pre-existing condition that was not disclosed. The burden of proof is on the insurance company, but they have the right to request medical records to verify previous treatment or symptoms that suggest this medical condition existed prior to enrollment.
Premium – Maintaining health insurance for your family requires a monthly payment to the insurance company that is providing your family with health care benefits. This is referred to as your insurance premium and is usually required in advance of the month in which coverage is provided. Failure to pay the monthly premium may result in cancellation of coverage. Most insurance companies have a 30 day grace period on payment of premium.
Preventive Medical Care – This is any medical procedure that is done to possibly prevent further health problems. Preventive medicine does not treat an existing condition. A main purpose of preventive medicine is to look for signs or symptoms of other potential health problems or risks. Preventive medicine includes routine physical exams, blood tests, pap smears, mammograms, prostrate exams and well-child visits. Many insurance companies offer excellent benefits for preventive health care visits because they feel they can reduce costlier claims in the future if the doctors catch a potential problem in its early stages.