Frequently Asked Questions

I need health care. Where do I start?  Ask yourself a few questions:

  • I need health care. Where do I start?
  • Ask yourself a few questions:
  • How often do we go to the doctor's office?
  • Do we have any ongoing medical conditions?
  • Do we take prescription meds regularly?

The answers to these questions will tell you if you need a co-pay plan (because you see docs and take Rx meds pretty frequently) or maybe a low-premium high-deductible plan that’s pretty much just for emergencies. Both plans are good for different reason. You just need to know which one is right for you.

Can I buy insurance without a group?
Sure! Individual and family health insurance is basically a “group of one” or more, if you have a family. If your employer does not provide group health insurance coverage or if you feel your co-pay for group coverage is too high, it’s a good idea to check out what kind of individual insurance you can get. If you are paying for more insurance than you need, think of applying the difference toward an IRA or college savings plan.

Isn’t my company group plan always a better deal?

Buying insurance for a group is like shopping for volume deals at Costco--the more you buy, the lower the price. That’s why large companies provide such great insurance, because they employ thousands of people. Medium to small companies have less to bargain with, so it’s always a good idea to see what else is out there for the equivalent of what they take out of your paycheck. Recent laws have made better group plans accessible in medium-sized quantities. It’s worth checking out and 360º can hook you up with group plans too!

What is the different between a managed-care and an indemnity plan?

The difference between types of plans has to do with your choice of healthcare providers, out-of-pocket costs and how bills are paid. Indemnity policies offer a broader selection of healthcare providers than managed care plans, but they also pay their share of the costs for covered services only after they receive a bill (yes, that means that you pay up front and wait for reimbursement). You’ve heard of managed-care plans mostly from late-night standup comedians. You know: HMO, PPO, POS.… (it really doesn’t mean what you’re thinking). These plans buy health care services in bulk through healthcare provider networks at pre-negotiated rates. These guys will usually submit the claim to the insurance company for you, so you don’t have to show up with cash in hand.

What is a co-payment?
A "co-payment" or "co-pay" is a specific charge that your health insurance policy may require that you pay for a specific medical service or supply. For example, your health insurance policy may require a $15 co-payment for an office visit or brand-name prescription drug, after which the insurance company often pays the remainder of the charges.

What is a deductible?
A "deductible" is a specific dollar amount that your health insurance company requires that you pay out-of-pocket each year before your health insurance policy begins to make payments for claims. Not all health insurance policies require a deductible. As a general rule (though there are many exceptions), HMO plans typically do not require a deductible, while most Indemnity and PPO plans do. Plans with a higher deductible usually come with a lower monthly premium.

What is coinsurance?
A lot of people know about premiums and deductibles, but this little line item catches the unwary by surprise. Coinsurance is the amount you pan IN ADDITION TO a co-pay or deductible. So where you see 80% or 80/20, it’s talking about co-insurance. If you have an 80/20 plan, you pay 20%. So if you have a medical bill for $100, you pay $20. The best plans offer 100% (or some say 0%) coinsurance. That means once you’ve paid your deductible, you’re done.

What is a health savings account?
Wikipedia says: A health savings account (HSA), is a tax-advantaged medical savings account available to taxpayers in the United States who are enrolled in a High Deductible Health Plan (HDHP).The funds contributed to an account are not subject to federal income tax at the time of deposit. Unlike a flexible spending account(FSA), funds roll over and accumulate year to year if not spent. HSAs are owned by the individual, which differentiates them from company-owned Health Reimbursement Arrangements (HRA) that are an alternate tax-deductible source of funds paired with either HDHPs or standard health plans. HSA funds may currently be used to pay for qualified medical expenses at any time without federal tax liability or penalty.

What is term life insurance?
Term life insurance is sold for a specific term, like 30 years. If you die before the end of your 30 year term, your beneficiary gets a nice check (as long as your death is not self inflicted). If you don’t die before the term ends, the insurance company keeps all your premiums and you part company. They are pretty easy to shop; you’re just comparing premiums. The only choice you have to make is whether you want guaranteed or renewable premiums.

How much life insurance do I really need?
Aside from what most insurance salesmen will tell you, financial planners will say it’s a good idea to have at least enough coverage to pay off your debts (including your mortgage) and any funeral expenses. A little more will help your family get back on their feet after you’re gone. If you have young children, it’s nice to have a police that covers your annual salary times the number of years before the kids turn 18.

What is an underwriter?
These are the guys who get your application and try to figure out how to reject your policy, uh, I mean figure out whether you are eligible for coverage. Really, many of them are nice guys. The decisions are made based on your overall health and not whether they like you or not. They look at you smoke, whether you’ve had any medical emergencies, and whether you are taking prescription medications. If the answer is yes on these, you can bank on a high premium. If the answer is no, you might hope for a “preferred” rate.

What is supplemental insurance?

If you know about supplements, you’ve done your homework. This is not a “rider” or anything connected with your policy. In fact, most supplemental plans come from a different company altogether. For instance:

  • Accident plans pay out a lump sum (you get a check) if you are involved in an accident (there are some exceptions) to cover your bills and maybe your time away from work.
  • Critical Illness plans pay out cash if you are diagnosed with cancer or something that means big bills. The best use of a critical illness plan is to buy enough coverage to pay your entire deductible. That way you aren’t paying any more cash out of pocket for all those doc visits.

Supplemental insurance helps you be prepared for the unexpected, but it’s not meant to be your only means of protection. While major medical or life insurance policies can provide the bulk of benefits to your family after an illness or loss, supplemental insurance benefits can be used to pay for unexpected out-of-pocket expenses...or to keep up your mortgage payment.

What is mortgage insurance?
What we just said. There’s not really any such thing as mortgage insurance, but you can buy a supplemental policy that will cover your mortgage for a period of time if you can’t get to work.

How much dental insurance do I need?
Do you customarily have a clean bill of health every time you visit the chair, or do you have to go back for more work? Do you have a health savings account? If you can negotiate a good pre-pay plan with a local dentist and you can pay through the pre-tax dollars in your HSA, you might not need to purchase a dental plan. Is anyone in your family involved in an active sport? Even if your shiny whites are in perfect condition, a baseball or a car accident can change your smile forever. If you want basic coverage in the event of an accident, you might want to shop accordingly.

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