Health Insurance Frequently Asked Questions (FAQ's)

Health Insurance Frequently Asked Questions (FAQ's) - Most insurance companies will provide free instant health insurance quotes, and long term care health insurance quotes. But you may have questions about individual health insurance and group health insurance. Below you will find the answers to many frequently asked questions.

What is the major difference between group and individual insurance?

The major difference between group and individual health insurance deals with evidence of insurability. For individual health insurance, a person normally needs to answer a health questionnaire and possibly undergo a medical examination to provide evidence of insurability. Most group health insurance on the other hand is issued without a medical examination or questionnaire because the insurance company knows that it can cover enough individuals to balance the potential payout to people in poor health against people who are in good health.

What are the different ways that people get health insurance protection?

A person may participate in a group insurance plan, a federal or state government-sponsored programs such as Medicare and Medicaid, service-type plans such as Blue Cross/Blue Shield or alternative health care programs like Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs). Some credit unions and professional or trade organizations offer insurance through group plans as well.

What is an HMO?

A Health Maintenance Organization (HMO) is an organization that provides comprehensive health care to a voluntarily enrolled group of people at a predetermined price.

What is a PPO?

A Preferred Provider Organization (PPO) is an association that partners with a group of doctors, dentists, hospitals or other health care service providers to provide health care at prearranged rates or discounts.

What is a POS Plan?

POS stands for Point of Service. This type of health insurance is a mix between a PPO and an HMO. You will still need to have a primary care physician as with a PPO, but you will have access to more health care options within your network. In addition, similarly to an HMO, there are normally no deductibles and co-payments are lower.

What is an HSA Plan?

HSA stands for Health Savings Account. It is basically a savings account which is used in conjunction with an HSA insurance plan to pay for your medical costs.

Contributions to your HSA savings plan are made at pre-tax and you may even be able to invest these funds however you would like. Any unused funds in your account are tax free and may accrue interest year-to-year.

What is an FSA Plan?

FSA stands for Financial Savings Account, and it is the same as an HSA with the main exceptions being that funds normally cannot be invested and unused funds do not carry over each year.

What should I ask an insurance salesman when getting a health insurance quote, before buying an individual medical insurance policy?

How much is the monthly premium and the deductible? How much is the co-payment amount and is there a cap? Does changing one amount affect the others? If so, how?

When does the coverage start? Is there a waiting period?

What does the policy cover in detail? What is not covered in the policy? Are there limits on how many days the insurance company will pay for drug prescriptions, maternity, out-patient services, etc.?

Is there a lifetime maximum cap in the policy that the insurance company will only pay up to that amount? (Experts recommend that you have at least a $1 million maximum benefit.)

What if I have to go to the emergency room? Can I go to urgent care facilities without needing to have them pre-approved? Do I have to use certain facilities in order to have the visits covered?

Is anything else covered? (These could include routine services like preventive care visits, physical evaluations, immunizations, mammograms, etc.)

What are the advantages of group insurance over individual insurance?

Group insurance is almost always cheaper than individual plans. Also, people with known health problems, who might otherwise be unable to obtain affordable individual insurance, can be covered automatically under a group plan upon employment without evidence of insurability.

Are employers required by federal law to purchase group insurance for their employees?

No. There are no federal law requiring employers to provide their employees with group insurance.

What is a mandate benefit?

A mandate benefit is a specific coverage that an insurance company must include in its policies by law.

What is a base plus plan?

A base plus plan is a two-part health insurance plan that includes basic medical coverage for things like hospitalizations, physician’s visits, lab tests, and surgery as well as a major medical portion that covers other medical expenses. A deductible is normally not required for the base plan, but is required for the major medical portion.

What types of hospital outpatient expenses are normally covered?

Emergency treatment, surgery and services rendered in the outpatient lab or x-ray department.

What is a deductible?

It is a specific dollar amount that a person must pay before the insurance company will begin paying for the remainder of the medical costs. The higher the deductible, the lower the health insurance premiums the insured person must pay.

What is a Co-Payment?

A co-payment is a charge that is agreed upon between you and insurance company before you purchase your plan that you will be required to pay for a doctor visit, prescription, etc. This co-payment may range anywhere from $15 to $50, depending on the insurance company.

What is a covered expense and are there limits?

A covered expense is an eligible expense under a group health insurance plan, meaning that it will be paid for by the health insurance company.

Do health insurance plans cover dental care?

Some plans do include dental coverage as part of the medical plan; others include dental coverage as a separate plan. However, some health insurance plans do provide coverage for noncosmetic dental work necessary as the result of an accident.

How is vision care covered?

Vision care is covered similarly to dental care. Most health insurance plans provide coverage for medical care related to eye injury or disease, but do not cover the costs of periodic eye examinations or corrective lenses.

Are all prescription drugs covered under health care plans?

Generally, only prescription drugs that are for treatment of an illness or injury are covered, subject to applicable deductibles. Sometimes, these prescriptions must be for generic drugs in order to be covered as well. Many plans do not cover contraceptive prescription drugs however.

I recently discovered I'm pregnant, but I have no health insurance. Is there any way I can get insured?

Unfortunately, probably not in any type of individual plan. 

You could try to get into a group health plan that will cover your pregnancy — either by getting a job that offers employer-sponsored health insurance that provides maternity coverage or by obtaining a group policy that covers maternity through a chamber of commerce or other professional organization.

You may be in luck if you're fortunate enough to live in the handful of states that are allowed to cover pregnant women under the Children's Health Insurance Program (CHIP). CHIP is a joint federal-state program that provides health benefits for children whose parents can't afford insurance but who make too much for existing welfare programs.

I was laid off from my job. What happens to my health insurance? How does COBRA work?

You can temporarily continue your health insurance benefits under COBRA.

The federal law known as COBRA protects the health insurance of workers who are laid off, as well as spouses and dependents of those workers, in certain situations. It enables you to keep your benefits for up to 18 months if you worked for a company that had 20 or more employees (including part-timers). You will probably be responsible for paying the full monthly premiums that your employer previously paid, plus an administrative fee (of up to 2 percent).

The alternative to COBRA is finding an individual health plan — or getting into a new group plan. The expense of an individual or family plan may be more or less expensive than COBRA for the same benefits, depending upon the type of plan you choose, so it's wise to shop around for the best deal.

Are employers legally required to provide their workers with health insurance?

No. There are no state or federal laws that require private U.S. employers to offer health insurance benefits to employees.

Can my employer require that I join the company's health plan as a condition of my employment?

If your employer pays part or all of your health insurance premium, it can require you to participate in their health plan. There is no law that prohibits them from doing so.

I have Medicare, but it doesn't cover all of my health insurance needs, such as prescription medications. What can I do?

You should consider buying a supplemental Medicare policy, known as Medigap. There are 10 standard Medigap policies available in the United States, lettered A through J, with A having the fewest benefits and costing the least, and J having the most benefits and costing the most. Plans H, I, and J all offer prescription coverage, at varying levels.

Can, my children be covered under my health plan and my spouse's health plan at the same time? And how do we determine which health plan pays for their medical claims?

Children (and even other adults) can be covered under multiple health plans. It is common for instance, for divorced parents to include their children on each of their health plans in order to maximize their coverage benefits.

When this happens, one plan is considered their "primary insurer" and the other is considered "secondary." The plan that is primary pays the cost of the claims first, and the secondary plan pays any costs remaining that are not covered under the primary plan (as long as the medical care is actually covered under the secondary plan).

How do you know which plan is primary and which is secondary?

The health insurance industry uses an informal practice called the "birthday rule." Under the birthday rule, the health plan of the parent whose birthday comes first in the calendar year is designated as the primary plan.

I have been covered by my husband's group health plan through his job, but now we are getting divorced. What will happen to my health benefits?

A divorce is a qualifying event under COBRA law, so you are eligible for a continuation of benefits under the law. Separated or divorced spouses are eligible for continued benefits for up to 36 months provided the premium (and 2% administrative fee) is paid. You should also review plans for COBRA payments, and any future plan's premiums, in your divorce negotiation.

I was just diagnosed with an illness. My employer doesn't offer health insurance, but I want to buy it on my own so I am covered for my illness. What can I do?

Not much. The fundamental premise of health insurance is that you should have it before you actually need to use it. Insurance companies don't like selling plans to people who are already sick, because they know they will have to spend more money on them than on someone who is healthy when they purchase a policy.

What is a "guaranteed-issue" law?

"Guaranteed-issue" laws require that an insurance company offer a health plan to any applicant for coverage, regardless of current or past health problems (assuming you can pay the premiums, of course).

I have Medicare, so I don't need long term care insurance, right?

Unfortunately, Medicare does not fully cover all of the typical expenses associated with long term care. Instead, it's recommended that you get a combination of Medicare, Medigap, and long term care insurance to ensure that you are fully covered for the future.

My employer offers health insurance through an HMO, but it's not available to all the employees. Is that legal?

Although it may not sound fair, it is legal. Employers are allowed to determine which classes of employees, if any, have the option to join in a health plan. Also, once a health insurance company extends an offer of coverage to an employer, no employee in that class can be excluded from coverage simply because he or she has health problems. The Health Insurance Portability and Accountability Act (HIPAA) provides limitations on the insurance company's ability to impose pre-existing condition exclusions and prohibits discrimination of members of the group based on health status.

Can I be excluded or dropped from my group health plan due to an  illness?

No. If you, your spouse and/or dependent(s) are eligible for group health benefits from an employer, a federal law known as HIPAA (The Health Insurance Portability and Accountability Act of 1996) guarantees that no individual can be singled out and excluded from the group health plan due to their health status or history.

Can I cancel my health insurance, and will there be a penalty if I do?

There normally is nothing in a policy that will prohibit you from canceling your health insurance coverage unless you are under a group plan. Then you may have to wait until the next enrollment period or a “significant life event” to happen before you can cancel your benefits.

Also an exception to this rule is in the case of Medicare. If a someone under Medicare chooses to obtain private insurance or HMO coverage involving an assignment of the Medicare benefits to the insurer or plan, the Medicare recipient has to apply to the Health Care Financing Administration (HCFA) before they can change their insurer or plan.

How long will my medical insurance allow my new baby and myself remain in the hospital following childbirth?

The law requires insurance companies to pay for at least a 48-hour hospital stay for mothers and their newborns after a regular delivery.

What Does the term In-Network Provider Mean?

This term refers to a doctor or health care practitioner that has contracted with your insurance company. Visits to these providers will be covered by your health insurance company.

What Does the term Out-of-Network Provider Mean?

This term refers to a health care provider that has not contracted with your health insurance company. Visits to out-of-network providers will cost more, depending on your plan, and may not even be covered at all.

Hopefully this answers your Health Insurance Frequently Asked Questions (FAQ's).