When looking at a health insurance plan or accompanying paperwork, whether it’s part of an employer provided group plan or an individual plan, you need to know exactly what you’re reading. Here is a few of the most important terms that you should understand about health insurance. It is by no means an exhaustive list, but should help to get you started when shopping around for health insurance.
Co-insurance – This is the amount that is considered the insured person’s responsibility. On average, the split between a person’s co-insurance responsibility and the company contribution is 80/20; meaning that you pay 20 percent of your health insurance premium and your employer pays 80 percent.
Coordination of Benefits – If the insured has two or more sources that would pay for a certain condition or treatment (such as being covered by a spouse’s insurance plan along with your own) the insurance company would not pay double benefits. Instead, they would coordinate benefits to make sure that each plan pays their portion for the service or treatment.
Co-payment – The fixed amount that the insured is required to pay at the time of service. A co-payment is usually required for basic doctor’s visits and when purchasing prescription medications. The amount can range depending on which play you subscribe to and your premium payment level. Many group plans like those provided by your employer will have payments of around $15-$20 for doctor visits and prescription drugs.
Deductible – Deductible refers to the amount of money that the insured needs to pay before any benefits from the health insurance policy can be used. This amount is generally a yearly figure that resets at the beginning of the next year. Some services such as doctor visits may be available without meeting the deductible amount first. Usually there are separate amounts for individual deductibles as well as family deductibles.
Exclusions – Exclusions are the things that an insurance policy will not cover.
Grace Period – This is the amount of time a person has to pay for their health insurance premiums before their coverage is cancelled. This is important if your state or insurance company rules require that you not have any gaps in your coverage, and especially important if you do not want to lose your coverage because of non-payment.
Lifetime Maximum – This is the most amount of money a health insurance policy will pay for the entire life term of the policy. There are different individual lifetime maximums and family lifetime maximums, so pay attention to both amounts.
Out-of-Pocket – This is exactly what it sounds like: The amount of money the insured pays out of their own pocket. The term may be used to refer to how much the co-payment, coinsurance, or deductible amounts are. The term annual out-of-pocket maximum refers to how much the insured would have to pay for the whole year out of their pocket not including premiums.
Pre-existing Conditions – This term refers to health conditions, ailments, or situations that exist before an individual obtains a health insurance policy. Group plans do not prejudice based on pre-existing conditions, but individual health plans generally require that health questionnaires be filled out and a medical exam to test for pre-existing conditions be completed before an individual applies for coverage. Individual plans will often deny or limit coverage based on the results of their findings, especially in the case of pre-existing conditions. This is a major difference between group and individual health insurance plans.
Waiting Period – This is the amount of time a person must wait until health insurance coverage becomes available or they are eligible.
For more information on individual health insurance please visit Premier Insurance Services of Chicago for a free Chicago health insurance quote.
The greatest benefit of working in just about any professional position is health insurance. Depending on the type of coverage your employer provides, this benefit can account for a quarter or more of your total compensation package when you consider your job’s pay, vacation and other benefits. This makes health insurance second only to salary when considering the overall value of the work you output. That’s why when job searchers are weighing different offers from similar employers, health benefits can make the difference whether or not they accept a position, and why health insurance is such a hot topic in nations such as the U.S. that have not adopted a government sponsored socialized medicine program like so many other nations have.
A Universal Life Insurance policy is a flexible premium flexible benefit life insurance policy that accumulates cash value. This policy is the most flexible policy in most insurance portfolios. You can change the premium amount, usually after the first two year minimums are met, and change the death benefit as your needs change.
