COBRA is the Consolidated Omnibus Budget Reconciliation Act of 1985, federal legislation that allows you – if you work for an insured employer group of 20 or more employees – to continue to purchase health insurance for up to 18 months if you lose your job, or your employer-sponsored coverage is otherwise terminated.
In general, the older you are the higher the cost of the policy. Gender has less impact except if there is maternity coverage. Additionally, some carriers may increase the cost of the policy up to 35% for tobacco use.
Once a completed application is received by the insurance carrier, it typically takes two weeks to be accepted. Some carriers only have effective dates on the first of the month. Others will start coverage during the month. Your carrier will let you know the effective date of your policy.
There are many elements to consider when choosing an insurance carrier, including price, physician network and benefit design. Some carriers have smaller networks and than others. Some carriers may require referrals to see physician specialists. Your agent can help you sort through these items to choose the best insurance carrier for you.
You need to determine what benefits are important to you. Below we have listed some of the more important points to consider:
- The hospitals and physicians that are in the network of the plan you choose
- Doctor visit co-pay
- Prescription benefit and copay
- Annual deductible
- Out of pocket annual maximum
- Lifetime Maximum Coverage
- Health Savings Account Qualified Plans (tax advantage plans)
An HSA combines high deductible health insurance with a tax-favored savings account. Money in the savings account helps pay the deductible. Once the deductible is met, the insurance starts paying. Money left in the savings account earns interest and is yours to keep. There is no “use it or lose it” restriction with an HSA.
Anyone who is not entitled to Medicare can accumulate tax-favored savings for healthcare needs. You must have a qualified high deductible plan to receive the benefits. Such a plan must have a minimum deductible for $1,050 for a single or $2,100 for a family.
HMOs are managed care plans that provide care for enrollees by contracting with specific health care providers to provide specified benefits. Many HMOs require enrollees to see a primary care physician (PCP) chosen by the member who will refer them to a specialist if deemed necessary. HMO plans often do not include deductibles, but copays are charged per office. HMO plans typically allow a member to have lower out-of-pocket healthcare costs, but require the member to forego some choice and flexibility with regard to selecting physicians and hospitals. Additionally, HMOs do not cover non-emergent services received from providers outside the network. HMOs do not require members to submit claims to the insurance carrier.
Coinsurance is the amount that you may be required to pay for covered medical services after you have satisfied any plan deductible. Coinsurance is typically expressed as a percentage of the allowable charge for a service rendered by a healthcare provider. For example, if your insurance company covers 80% of the allowable charge for a specific service, you may be required to cover the remaining 20% as coinsurance. Please note that definitions vary across insurance companies.
As a member of a PPO, you will seek treatment from an approved network of providers, or you can see healthcare providers outside the network. These healthcare providers have been contracted by the insurance company to provide services at a discounted rate. Normally you can see any doctor or specialist within the network at your own discretion, and will not be required to select a PCP. Usually you will pay a small copay and satisfy a deductible before benefits are paid. If you go outside the PPO network for healthcare services, your share of the bill will be higher.
A co-payment (or co-pay) is a specific charge that your health insurance plan may require that you pay for a specific medical service or supply. For example, your health insurance plan may require a $15 co-payment for an office visit or brand-name prescription drug, after which the insurance company often pays the remainder of the charges.
A deductible is a specific dollar amount that your health insurance company may require that you pay out-of-pocket each year before your health insurance plan begins to make payments for claims.
An in-network provider is one contracted with the health insurance company to provide services to plan members for specific pre-negotiated rates. An out-of-network provider is one not contracted with the health insurance plan. Typically, if you visit a physician or other provider within the network, the amount you will be responsible for paying will be less than if you go to an out-of-network provider. Though there are some exceptions, in many cases, the insurance company will either pay less or not pay anything for services you receive from out-of-network providers.
You can request that your health insurance plan start anytime between 1 and 90 days in the future. However, the insurance companies will typically need some time to process your application so keep in mind that the actual date for the start of your coverage may vary depending on the underwriting process and the availability of your medical records.
A few things can cause a delay:
- The application form was not signed and dated.
- Not all questions were answered.
- Questions answered “yes” in the medical history section require details. This information may be incomplete or missing.
- The carrier is waiting for medical records from providers.
An annual maximum, or cap, is a defined dollar amount the carrier will pay toward your covered expenses within a calendar year. You will be responsible for covered healthcare expenses that exceed that amount.
The date your health insurance coverage begins.
An eligible dependent is usually a child who meets all the requirements to receive health insurance coverage through someone else’s plan. In most states and for most carriers, eligible dependents include children 2 weeks old to a maximum age of 25 years old (unless specified higher by your state). Requirements may vary for Short Term Medical plans.
The Health Insurance Portability & Accountability Act of 1996 (HIPAA) allows persons to qualify immediately for comparable health insurance coverage when they change their employment or relationships. It also creates the authority to mandate the use of standards for the electronic exchange of health care data; to specify what medical and administrative code sets should be used within those standards; to require the use of national identification systems for health care patients, providers, payers (or plans), and employers (or sponsors); and to specify the types of measures required to protect the security and privacy of personally identifiable health care.
A High-Deductible Health Plan is a type of insurance that typically consists of a lower premium, higher deductible, and no copayments. All expenses incurred are credited toward the deductible until it is met. Many of these plans can also be combined with a Health Savings Account (HSA). For many people, a high-deductible health plan combined with an HSA costs less each year because premiums are lower, prescription drug costs count toward the deductible, and the out-of-pocket maximum includes the deductible.
An applicant’s age when submitting a completed application.
A set limit on the total benefits to be paid by the plan over the course of the health insurance policy/certificate.
The bill a covered person receives for services from non-network providers may be significantly higher than the maximum allowable fee. In addition to the out-of-pocket deductible, co-payments, access fees, coinsurance, or out-of-pocket limit, a covered person is responsible for the difference between the maximum allowable fee and the amount the provider bills for the services. Any amount the covered person pays to the provider in excess of the maximum allowable fee does not apply to the out-of-pocket limit or deductible.
A health condition for which any of the following occurred before the effective date of your insurance or you had signs or symptoms of the condition
- You received treatment, advice, tests related to the condition, or prescription drugs were prescribed for the condition
- A healthcare professional told you to get tests or treatment for the condition
Due to the Affordable Care Act (ACA), health insurance companies can’t refuse coverage or charge more because of pre-existing health or medical conditions for qualifying plans. The exceptions to this pre-existing coverage rule is for health insurance policies purchased on or before March 23, 2010 which are exempted from the ACA requirements, and short-term health insurance plans that don’t meet the ACA requirements for minimum coverage.
A monthly, quarterly, or semi-annual payment required to secure a health plan. The premium is based on variables like the number of people to insure, health information/history, and the cost of care in your area.
Primary Care Physicians, or PCPs, are usually the first healthcare provider an insured person contacts for treatment. Physicians considered Primary Care Physicians may vary by state, but they typically include family practitioners, general practitioners, and pediatricians.