We receive a number of common questions from clients regarding their insurance consultation and subsequent enrollment for medical coverage. To provide you with further guidance, below is a glossary for common definitions and answers to frequently asked questions:
Glossary
PPO (Preferred Provider Organization) Plan: A PPO plan is one that allows you to access providers from the plan’s network as well as outside that network. Typically, these plans do not require any referrals to doctors or specialists. The main feature of a PPO plan is the ability for you to access care and services outside of the plan's network. PPO plans will cover a percentage or portion of your out-of- network care according to their schedule of allowable charges. PPO plan models typically have out-of- network care deductibles and coinsurance amounts that must be met before or in conjunction with applicable plan benefits. PPO plans tend to be the most expensive plans available.
HMO (Health Maintenance Organization) Plan: Unlike PPO plans, HMOs restrict you to the use of their network that feature significant managed care policies, used to oversee and control access to care and services. For example, HMO plans will commonly require you to select a Primary Care Physician (PCP) who is then responsible for managing your healthcare needs. Access to specialists, testing, outpatient hospital procedures and more is all provided through referrals from your PCP. There are no covered out-of-network providers, services, or facilities under an HMO plan; all care must be accessed within the network for plan benefits to apply.
POS (Point of Service) Plan: A POS plan model is a hybrid of the PPO and HMO plan models. A POS plan will require the selection of a Primary Care Physician (PCP), who functions as your point of service "care manager" and determines what steps or referrals should be made for the course of your care. Under a POS model, the PCP can refer patients to both in and out-of-network providers but most often referrals are then required.
EPO (Exclusive Provider Organization) Plan: EPO's are among the most popular types of health insurance, and function much like a PPO with a much lower cost. This lower cost is possible because EPO's limit coverage to in-network providers or facilities.
Deductible: A deductible is a specific dollar amount that your health insurance plan may require that you pay out-of-pocket each year before your health insurance plan begins to make payments for your claims. Not all health insurance plans require a deductible.
Coinsurance: The amount that you pay for covered medical services after you've satisfied any co- payment or deductible required by your health insurance plan. Coinsurance is typically expressed as a percentage of the charge, or 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.
Out-of-pocket Maximum: This is your annual limitation on all cost-sharing for which you are responsible under a health insurance plan. However, this limit does not apply to premiums, balance- billed charges from out-of-network health care providers, or services that are not covered by the plan.
Health Savings Accounts (HSAs): These are tax advantaged savings accounts to be used in conjunction with qualified high-deductible (low premium) health insurance plans to pay for eligible medical expenses. Contributions may be made to the account on a tax-free basis. Funds remain in the account from year to year and may be invested at the discretion of the individual owning the account. Interest and investment returns accrue tax-free. Penalties may apply when funds are withdrawn to pay for anything other than qualifying medical expenses.
Flexible Spending Account (FSA): A benefit offered to an employee by an employer which allows a fixed amount of pre-tax wages to be set aside for qualified expenses. Qualified expenses may include childcare or uncovered medical expenses. The amount set aside must be determined in advance and employees lose any unused dollars in the account at year-end.
Affordable Care Act (ACA): The Affordable Care Act or ACA, generally referred to as Obamacare, is the landmark health reform legislation signed into law by President Barack Obama in March 2010. The legislation includes a long list of health-related provisions that began taking effect in 2010. Some of the key provisions are intended to extend coverage to millions of uninsured Americans, to implement measures that will lower health care costs and improve system efficiency, and to eliminate industry practices that include denial of coverage due to pre-existing conditions.
COBRA: This acronym stands for the Consolidated Omnibus Budget Reconciliation Act of 1985. Federal legislation allows you (if you work for an insured employer group of 20 or more employees) to continueto purchase health insurance for up to 18 months if you lose your job, or your employer-sponsored coverage is otherwise terminated. You become responsible for the full cost of the premiums, plus a 2 percent administrative fee, if you choose COBRA.
HIPAA: The Health Insurance Portability and Accountability Act of 1996 allows you to qualify immediately for comparable health insurance coverage when you change 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 securityand privacy of personally identifiable health care information. Both MCA and Pinnacle Care are HIPAAcompliant.
Insurance exchange or health insurance marketplace: This is a key creation of the Affordable Care Act designed to provide a selection of competing providers, each offering different qualified health plans. These plans must meet standards set by the Affordable Care Act. Competition between plan providers would theoretically encourage providers to improve the quality and pricing of offered plans. Through the exchange - either federally or state operated – consumers can shop online for health insurance and determine whether they qualify for subsidies. Coverage subsidies can only be obtained through the exchanges.
Frequently Asked Questions
Will you recommend a specific health plan to me and enroll me in it?
Our team does not explicitly offer a recommendation on which plan to select. This is because we’ve intentionally chosen to provide unbiased, non-commissioned guidance. The HealthPlanning Analysis will show you the plans that best fit your needs and preferences, but the final decision on which plan you choose is completely up to you.We do not earn commissions based on which plan you choose, and we believe this unbiased approach leads to healthcare planning choices that truly benefit you, the client.The information and insights you need to come to a decision independently, or with your financial advisor’s guidance, can be accomplished purely from your HealthPlanning Analysis.Although we don’t manually enroll you in the health plan, we can assist you with the process! Just reach out to us after you complete your HealthPlanning Analysis.
When is the Open Enrollment Period for individual medical plans?
The Open Enrollment Period is typically from November 1st through December 15th. In 2021, new open enrollment periods have been added on a state-by-state basis. If you miss your open enrollment and do not qualify for Special Enrollment under a Qualifying Life Event you must wait until the next Open Enrollment and may be subject to a penalty if you were uninsured.
What is a Special Open Enrollment?
Under certain circumstances you can enroll outside the Open Enrollment Period if you have a Qualifying Life Event. In that case, you have a special open enrollment period – generally 60 days – during which you can enroll in a new plan on, or off-exchange, or switch to a different plan.
What is considered a Qualifying Life Event?
To qualify for a special enrollment period, you must have a "life-changing event”. Qualifying events include:
1) getting married,
2) having a child
3) adopting a child/fostering a child,
4) becoming a U.S. citizen,
5) moving out of your current coverage's service area,
6) losing your existing health insurance, group coverage through your employer
7) your COBRA coverage expired,
8) you get divorced,
9) you come off your parent's group coverage,
10) your plan was terminated by the carrier,
11) you lose your Medicaid eligibility, CHIP eligibility, or similar situation.
Will I need to change insurance if I move to another state? What if I have multiple residences?
Generally, yes - if you are buying coverage on your own, you need to buy it in the state where you live. Some plans offer coverage statewide; others only cover people within a local geographic service area. It depends on your insurer. If you move within a state, you will need to determine if you are moving out of your health plan’s service area. If you move and need to change your insurance, you can change insurance plans outside of the open enrollment period. If you have a residence in more than one state, you can purchase insurance in either state if they are considered permanent residences.
What is the penalty for not having health insurance under the Affordable Care Act?
Individuals who can afford health care but do not have health insurance previously had to pay a fee or penalty. This fee was called the "individual mandate" or "the individual responsibility payment." Beginning in 2019 this penalty will no longer be assessed.
Is dental coverage an essential health benefit?
Under the healthcare law, dental insurance is treated differently for adults and children 18 and under. Dental coverage for children is an essential health benefit. This means it must be available to you, either as a covered benefit under your health plan or as a free-standing plan. This is not the case for adults.Insurers don’t have to offer adult dental coverage.
When should I enroll for coverage once I have made my choice?
Enroll as soon as you have made a choice concerning which carrier and plan that best meet your needs. We have seen too many clients put off enrollment and then forget deadlines. Remember you can always switch your coverage before the enrollment period ends.