COBRA -

Consolidated Omnibus Budget Reconciliation Act of 1986; this is the Federal Law pertaining to groups with 20 employees or more. Terminated employees or those who lose coverage because of reduced work hours may be able to buy group coverage for themselves and their families for limited periods of time. Most individuals are eligible for 18 months of continual coverage.  However, in the case of death and divorce, the person is eligible for 36 months of COBRA continuation.  The COBRA eligible person must pay the premium in full by the deadline or risk losing coverage.  The prior employer is not allowed to charge more than 2% of the premium for administrative charges.  Most companies to not charge for COBRA benefits; they only require the person pay the premium. 

Co-insurance -

After the deductible is met, the coinsurance kicks in. This is where the insurance company and you are splitting all the bills (typically 80/20 – 80% of the bill is paid by the insurance company and 20% is paid by you) until you reach your out of pocket maximum.  In other words, you don’t pay 20% FOREVER!  There is a cap under most policies.  However, at the start of the next calendar year, both the deductible AND co-insurance start over.

Co-payment -

This is a fixed dollar amount that you will pay for certain services such as a Dr.’s office visit or for a prescription drug.   For example, you may have a $20 Dr. office copayment.  You pay $20, and the insurance company pays 100% of the remainder charges for the office visit.  This amount does not usually apply towards your deductible or out-of-pocket costs.  You may also see co-payments on some HMO plans for hospital stays or surgeries.  This might be either $100 per day co-payment or $250 for a surgery.

Deductible-

The amount of money you must pay each year for coverage to your medical care expenses, before your insurance policy begins to pay. The exception to this rule would be if you have a “first-dollar benefit” such as a Dr. office co-pay or drug card.  Typically the deductible is waived and only the co-pay is due.  Read your policy carefully to see if the deductible applies. 

Exclusions and Limitations-

A health insurance company may decide at the time your policy is approved that they are excluding coverage for a specific condition listed on your application.  The exclusion can be for 2 years, 5 years, or permanently.  This means they will never pay ANY claims related to this condition.  (NOTE:  Exclusions are NOT on group policies.  Pre-existing conditions may apply to groups, but this is limited to a 12 month period.  Thereafter, the condition is covered.  In the case of Pregnancy, this is covered DAY 1 on a group policy, according to the federal law.)    Also, most policies have a list of items that are not and will never be covered, such as cosmetic surgery and custodial care.  We recommend that you read the list of Exclusions before and after purchasing an insurance policy!  Let us know if you need help!    Limitations may be a maximum dollar amount for specific services.  For example, a policy may limit chiropractic care, physical and occupational therapy, and treatment for psychiatric type claims to name a few.

HIPAA -

Health Insurance Portability and Accountability Act of 1996. It is designed to protect health insurance coverage for workers and their families when they change or lose their jobs. HIPAA allows individuals to get onto a group health plan without every worrying about being declined for coverage.  The insurance companies cannot “WAIVER” our conditions on a group plan.  If someone is moving from another group, from a COBRA plan or even from an individual policy onto the group plan, there will be no Pre-Existing Conditions excluded from coverage as long as they have had NO LAPSE in coverage of more than 62 days in the past 18 months. 

HMO- (Health Maintenance Organization) -

Prepaid health plans for which a premium is due each month. The HMO covers your cost of care to see a doctor within their working network at pre-negotiated rates. You are required to choose a primary care physician who takes care of you and makes referrals to any specialists you may need. If you, as an HMO member, do not use the doctors, hospitals and clinics that do not participate in your plan’s network, you may be required to pay the cost of those medical services.

HDHP -

High Deductible Health Plan, also referred to as an H.S.A. health plan or H.S.A. compatible plan.  These plans must meet the qualification set by the US government.  There is a minimum deductible per person/per family (typically around $1000/$2000.)  Note:  these numbers are indexed each year and tend to go up.  There is a maximum out-of-pocket for an individual and family (typically $5000/$10,000).  Again this number is indexed and can be higher.  For more info, watch the short PPP at www.hsabank.com 

HSA -

Health Savings account.  Any individual can set up this tax-savings account, typically offered through a bank or other financial institution, as long as they are currently enrolled in a High Deductible Health Plan.  The HDHP is actually defined by our government and must have a minimum deductible, maximum out of pocket, and typically no ‘bells and whistles’ such as a Dr. copay or drug card.  The only ‘first dollar’ benefit of an HDHP is that it CAN offer 100% wellness exam without having to meet the deductible.  Not all plans actually do this, though.  (For more info on HDHP, view the presentation at www.hsabank.com  ) 

Lifetime Maximum -

This is the maximum dollar amount the insurance companies will pay out to providers in the lifetime of the insured.   Years ago the lifetime maximum was $1 million.  However, today this is not adequate coverage.  An individual or family can run out of a million dollars of coverage.  Most A-rated companies offer $5 million of coverage, which is currently more than adequate.  (No one has even had a $5 million claim!)  Some companies do offer a buy-up to a $6, 7 or 8 million amount.  

Out-Of-Pocket Maximum-

Most people think that the out-of-pocket maximum includes all costs they will incur, such as the deductible, co-insurance, and co-payments.  However, when the insurance companies refer to Out-of-pocket maximums, they are usually talking about the maximum you will pay for the COINSURANCE, and does NOT include the deductible.  For example, the Select Blue, Blue Cross PPO has an 80/20 coinsurance until you reach $1000.  The out-of-pocket is $1000.  However, this does not include your deductible or any co-payments.   So read the fine print! 

Pre-existing Condition -

Pre-existing conditions are those health conditions which were diagnosed or treated by a Provider during the 12 months prior to the coverage effective date, or for which symptoms existed which would cause an ordinarily prudent person to seek diagnosis or treatment.  Pre-existing conditions can be excluding from individual policies for the first 12 months of coverage.  (Not all companies do this.  Be sure to ask your CB Health Rep which companies cover pre-existing conditions if fully disclosed on the application and not excluded by the insurance company.)

PPO (Preferred Provider Organization) -

A network of health care providers that offers medical services to health plan members at a discounted cost. PPO members usually make their own decisions about their health care instead of going through a primary care physician like an HMO member. The costs to use physicians within the PPO network are less than using a non-network provider.

Primary Care Physician -

Under a health maintenance organization (HMO) or point-of-service (POS) plan, a primary care physician is often the first contact for health care. It is usually a family physician, internist, or pediatrician. A primary care physician makes referrals to specialists if necessary.

Provider -

Any person (doctor or nurse) or institution (hospital, clinic, or laboratory) which is certified, that provides medical care.