FREQUENTLY ASKED QUESTIONS ABOUT HEALTH INSURANCE

1) What is a deductible?

A deductible is the amount of money you have to pay each year before your health insurance plan begins to pay for your medical expenses. Depending upon your plan, it typically only comes into play if you have to go to the hospital. After the deductible is met, the insurance company will pay a percentage of the bill in what is called co-insurance.

2) What is co-insurance?

Co insurance is the percentage of your medical bill that you must pay after your deductible is met. Most plans are 80/20 co insurance. This means that after you meet your deductible, you pay 20% while the insurance company pays the 80% up until your maximum out of pocket. Once this is met, your insurance company will pay your medical bills the rest of the year at 100%.

3) What is a co-payment?

A co-payment or co-pay is the amount of money you must pay for specific services such as doctor visits or prescriptions. This fee does not go against your annual deductible.

4) What is a network?

A network is a list of doctors, hospitals and other providers that have contracted with an insurance company. They have pre-arranged fees for services such as doctor visits, hospital visits and prescription medications. Always stay in network for your medical care if possible, as your charges will be much lower.

5) What is a pre-existing condition?

A pre-exisiting condition is any medical condition that you have or have been diagnosed with prior to applying for an individual health policy. All individual plans are individually underwritten based on your medical history, gender and age. Most insurance companies go back ten years for your medical history.

6) What is an HMO?

A Health Maintenance Organization provides a type of health insurance coverage through doctors, hospitals and providers that it is contracted with. An HMO typically has no deductible, but requires you to choose a primary care physician (PCP) and see that doctor for any health issues. If you need to see a specialist, you’ll have to get a referral first from your PCP prior to the visit.

7) What is a PPO?

A Preferred Provider Organization is a form of managed care that typically has a deductible, but allows you to go to any doctor or specialist within your network without a referral. If you go to a doctor within your PPO network, you will only be charged a co-pay for your visit.

What is an HSA?

A Health Savings Account is a government regulated account combined with a high deductible health insurance plan that allows you to save money tax free along with having medical care. You can contribute up to $2,850 individually and $5,650 per family each year. Any money left in the account at years end will roll over to the following year for medical benefits.

9) What is COBRA?

The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) requires employers that offer group health plans to offer employees the opportunity to continue their health coverage for 18 months after certain qualifying events from most group plans.

10) What is HIPPA?

HIPAA is the United States Health Insurance Portability and Accountability Act of 1996. There are two sections to the Act. HIPAA Title I deals with protecting health insurance coverage for people who lose or change jobs. HIPAA Title II includes an administrative section which deals with the standardization of healthcare-related information systems. In the information technology industries, this section is what most people mean when they refer to HIPAA. HIPAA establishes mandatory regulations that require extensive changes to the way that health providers conduct business.

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