Understanding Your Health Insurance Options
Individual and Group PPO Plans
These are the common individual/family and group health insurance plans most people are accustomed to. Under a PPO plan, the doctor, clinic, or hospital will be paid a fee for their medical services. For example, you go to the physician, clinic, or hospital of your choice for your medical needs. Your doctor, clinic, or hospital will submit a claim to your insurance company for reimbursement. Reimbursement will only be paid for “covered” medical expenses listed on your policy after your annual deductibles are paid.
After meeting your annual deductibles, PPO plans typically pay 80% of the “reasonable and customary charges” and you will pay the other 20% as your coinsurance.
Premiums for PPO plans are typically paid monthly or quarterly and can vary greatly depending upon the coverage, medical history, and deductible amounts. Premiums do not count toward deductibles.
PPO policies typically have an out-of-pocket maximum. This means that once your covered medical expenses reach a predetermined amount during a calendar year, the “reasonable and customary charges” will be paid 100% by the insurance plan.
Health Savings Accounts (HSAs)
HSAs combine a High Deductible Health Plan (HDHP) with a Health Savings Account (HSA). The HDHP covers catastrophic illness and injury and the HSA covers routine expenses such as doctor visits, prescription and over-the-counter drugs, emergency and walk-in medical care, physical therapy, dental care, vision care, etc.
HSAs are rising in popularity due to their flexibility and tax savings. All money you spend to fund your HSA is tax-deductible. Also, HDHPs have lower premiums because of their higher deductible amounts. The money you save on monthly premiums can help you fund your HSA.
HSA Advantages
• Contributions are 100% tax deductible
• HSA funds belong to the individual
• HSA funds can be invested and earn tax-free interest
• Unused amounts at year-end roll over for future years
• HSA payments for qualified medical expenses are not taxed
Find out more about HSAs.
Long-Term Care Policies
Long-Term Care Insurance is one of the most attractive insurance plans offered. Various plans will pay for your care if you need additional assistance. These plans can include paying for assisted living, nursing home, and home health care. These plans will eliminate the need for your family to make arrangements for you if you become unable to care for yourself.
Dread Disease Insurance
Dread Disease Insurance covers a variety of illnesses and treatments for those wanting to have financial assistance in case of becoming sick. These plans include coverage for cancer, heart desease, stroke, hospital indemnity, and other serious illnesses.
Dental Insurance
Some insurance policies include dental coverage as part of the plans coverage. If not, you can purchase a separate dental policy. Most of these plans have dollar and visit limitations, but are still worthy of consideration.
For groups, dental plans can be offered as a group-sponsored plan or on a voluntary basis. Most group-sponsored dental plans have a participation requirement before the carrier will issue the policy. Those groups wanting to offer their employees this product without paying for it will typically arrange for a voluntary plan. Premiums for those employees are withheld from their paycheck and remitted to the dental carrier.
There are many different dental options available to groups and their employees. Some plans have networks that allow the member to obtain the highest level of benefits. Other plans reimburse dentists at the same level regardless of the network.
Disablility Plans: Long-Term and Short-Term
There are many insurers for disability plans. Most disability plans will pay a monthly benefit (long-term) or weekly benefit (short-term) for the time one is disabled. This benefit can be a flat amount or a percent of salary benefit. Premium amounts for disability insurance can vary greatly depending on the duration of the benefit and the elimination period selected.
