Health insurance is a way to manage the cost of health care. Health insurance companies collect premiums and pay out benefits. Covered services can include preventive care like routine check-ups and treatment for illness and injury.
Individual health insurance is health coverage you purchase on your own directly from an insurance company rather than a group plan sponsored by an employer. While the name suggests it’s only for individuals, these policies can cover single people as well as families.
Some employers negotiate with insurance companies to obtain discounted rates for their group of employees, although many workers do not have access to a group plan. Others find employer-sponsored coverage to be too expensive or inflexible for their needs. Of course, everyone still needs health insurance to protect their physical and financial health, as well as to avoid penalties introduced by the Affordable Healthcare Act (ACA). That's where we come in! We can help you find a health plan that suits your individual needs and budget.
All health insurance generally works the same way. We can help you master the basics: plan types, enrolling, and policy documentation.
All issuers of health insurance are required to provide consumers with clear, consistent and comparable information about their health plan benefits and coverage—called a Summary of Benefits and Coverage (SBC).
The SBC is like a nutritional label for a health insurance plan. The eight-page form displays information about a health plan in a simple question-and-answer format. It answers questions like:
The primary distinction between group coverage and individual health insurance is selection. People who receive health insurance through an employer-sponsored plan pick their plan from a short list of options. On the other hand, people familiar with purchasing health insurance on their own are used to choosing a health plan from a wide range of companies and policies.
Group coverage is typically available through your employer. Depending on your employer’s budget, you may pay some of your premiums or your employer may cover them entirely. In almost every circumstance, however, the employer will pay at least a portion of the cost. Typically, group plans cover employees regardless of pre-existing conditions.
Usually health plans only accept new members during the open enrollment period. If you fail to sign up for benefits during the open enrollment period, you may have to wait until the next open enrollment period to choose coverage options unless you experience a qualifying event that makes you eligible for a special enrollment period. A Short Term plan might also be appropriate if you miss other enrollment opportunities.
Health insurance has a language all its own – learning what the common terms mean and mean for you can help you make better coverage decisions.
Affordable Care Act (ACA) Minimum Essential Coverage is the type of insurance you need to have to avoid a tax penalty under the Affordable Care Act (ACA). All health plans must cover what are known as “essential health benefits,” including:
A benefit is a service or supply that is covered under a health insurance plan. This might include office visits, lab tests, and procedures during the course of treatment.
Coinsurance is the percentage of covered medical expenses that you are required to pay after the deductible. Let’s say your health insurance plan has a 20% coinsurance requirement (excluding additional copays). Once you have met your deductible for a $100 medical bill, you would pay $20 and the insurance company would pay $80. You might see this referred to as 80/20 coinsurance. Some plans offer 0% coinsurance, meaning you’d have no coinsurance to pay.
Often shortened to copay – it’s a set amount that you’ll pay for certain medical services or supplies at the time of service. Doctor visit copays commonly run from $35 to $50. Prescription copays often are $15 to $60 depending on the type of drug purchased.
A deductible is an amount your insurance plan will require you to pay out-of-pocket for covered expenses before the plan pays benefits. With ACA plans, a deductible will usually cover one calendar year. Short term plans have a per-term (number of coverage months you select) or per-cause (separate for each illness or injury) deductible. A higher deductible usually results in lower premiums.
An indemnity plan is a health insurance plan that reimburses the covered person for incurred medical expenses. Indemnity plans often include a deductible that must be satisfied before claims can be paid. Covered persons can usually see any qualified provider without a change in benefits. Indemnity plans are sometimes called fee-for-service plans.
Health insurance marketplaces, or "exchanges," are a way for people to shop for and buy health insurance, which may be referred to as a health plan. Each marketplace is divided between individual (for families and individuals) and SHOP (health plans for small employers) marketplaces.
A network is a group of physicians, hospitals, and other health care providers that have agreed to provide medical services at pre-negotiated rates.
The open enrollment period refers to the period of time (usually once per calendar year) when people can freely apply for a health care plan or change their benefit selections.
Premium is the amount paid for health insurance coverage for a specific period of time.
A special enrollment period refers to the period of time (usually 60 days) when people become eligible to apply for a health care plan or change their benefit selections due to experiencing a qualifying event, such as job loss, having a baby, or being disqualified from Medicaid.
Underwriting is the process the health insurance company uses to review an application to determine the insurability of the applicant(s). ACA plans are guarantee issue and do not require underwriting.
Waiting period is a time period after you start a health insurance plan when coverage may not be available for some medical conditions.
COBRA allows for continued group health insurance coverage after an employee is terminated, but the insured bears the full cost of the premium.
Qualifying events are certain events that would cause an individual to lose health coverage. The following are the two events that make an employee with a group plan eligible for COBRA coverage:
Your former employer is responsible for notifying you that COBRA3 continuation coverage is available to you. Normally, you’ll receive a notice no later than 14 days following either of these COBRA qualifying events. You’ll have 60 days to decide whether to sign up.
COBRA is expensive because it is based on a group (employer-provided) health plan, one in which every participant, no matter what his/her state of health is, must be insured. Also, your employer probably paid part of the premium while you were an employee. With COBRA you are responsible for the full premium.
An individual or family health insurance plan may be less expensive than COBRA. Many group (employer-provided) health plans come with benefits you may not need, and those come with a price.
Individual health insurance, on the other hand, gives you the opportunity to pick the coverage options that suit your personal needs and budget, such as a range of deductible amounts, different coinsurance percentages and other supplemental benefits. So, if you don’t need certain coverage options, you don’t have to select and pay for them.