Group Health Insurance
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Overview Group Health insurance is similar in form to
individual health insurance. The primary differences are
the conditions under which a person my apply and the requirements
for acceptance. Before applying through a group a person
must satisfy the waiting periods and employment requirements
of the group. However, once an application can be made
the conditions for acceptance are usually less strict
than with an individual policy. Also, certain protections
under the law are available for members of group policies
that are not available to owners of individual plans.
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What It Is Not Group Health insurance is not necessarily
a guarantee of coverage. There are many rules, set forth
by federal and state law, which must be followed closely
in order to obtain coverage. An insured always must make
certain that he or she has followed the law, to the letter,
in order to provide maximum protection. In other words:
Don't assume you have coverage, talk to a qualified agent!
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Evaluating Your Needs When evaluating your needs you should
keep several things in mind:
Some health plans have networks of doctors, make certain
that yours is in it.
Not all health plans will let you go outside the network,
if this is important to you make sure that your plan has
an "out-of-network" benefit.
Check for coverage of routine medical care. Not all plans
cover "routine checkups" or cover them only
in small amounts.
Check the drug benefits. Forty percent of the cost of
medical care is for drugs. Some health plans use a formulary
system to determine which drugs they will pay for. Make
certain that this formulary is extensive and that your
doctor is willing to prescribe off of the formulary if
necessary.
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Product Definitions
PPO plans
HMO plans
POS plans
Fee-for-service plans
Preferred Provider Organizations (PPOs) are one step
over the managed care border. PPOs have made arrangements
for lower fees with a network of health care providers.
PPOs give their policyholders a financial incentive to
stay within that network. With a PPO, you can refer yourself
to a specialist without getting approval and, as long
as it's an in-network provider, enjoy the same co-pay.
Staying within the network means less money coming out
of your pocket and less paperwork. Preventive care services
may not be covered under a PPO.
Health Maintenance Organizations (HMOs) are the least
expensive, but also least flexible type of health plan.
They also tend to be geared more toward members of group
plans than individuals. In exchange for a low co-payment
(or sometimes no co-pay at all), low premiums and minimal
paperwork, an HMO requires that you only see its doctors,
and that you get a referral from your primary care physician
before you see a specialist. If you can still pick up
the phone, you'll probably need to get clearance before
you can visit the emergency room.
Point-of-Service (POS) are similar to PPOs, but they
introduce the gatekeeper, or Primary Care Physician. You'll
need to choose your PCP from among the plan's network
of doctors. As with the PPO, you can choose to go out
of network and still get some kind of coverage. In order
to get a referral to a specialist, though, you usually
must go through your PCP. You can still choose to refer
yourself, but it'll mean more hassles and more money coming
out of your pocket.
Fee-for-service or indemnity coverage was the norm. Under
this type of health coverage, you have complete autonomy
when it comes to choosing doctors, hospitals and other
health care providers. You can refer yourself to any specialist
without getting permission, and the insurance company
doesn't get to decide whether the visit was necessary.
Group Health Insurance
