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INSURANCE 101 Types of Health Insurance Programs: COBRA (Consolidated Omnibus Budget Reconciliation Act): COBRA was designed to provide continued temporary health coverage to a terminated employee and their family members. COBRA offers coverage to a terminated employee for a maximum of 18 months. Unfortunately, these premiums are often extremely high. Critical Illness Insurance: Critical Illness Insurance pays you a specified lump sum of money if you suffer a major medical condition covered in the policy. Conditions usually covered by these plans are cancer, heart attack, organ transplant, stroke, renal failure, or terminal illness. Monies received from these policies can be used for anything you feel necessary, whether it be medical care or to help reduce financial stress. Fee For Service (FFS) Plans: An FFS is not as popular as it once was. These health plans are modeled after traditional “indemnity” insurance where you pay for your care up front and you are reimbursed by your insurance company after you file a claim. Guaranteed Issue Health Plans: Guaranteed issue individual health insurance plans are available to those who have a pre-existing medical condition that prevents them from qualifying for a medically underwritten plan. These plans are required to cover anyone who applies, regardless of health status and are usually offered through employment. Premiums are typically more expensive with these plans because insurance companies are in business to make a profit and they do not want to cover someone who is already sick. If you have a pre-existing condition such as heart disease, cancer, AIDS, or diabetes, then a Guaranteed Issue Health Policy may be the best option for you. Guaranteed issue policies may have an initial waiting period of up to a year before pre-existing conditions are covered. Health Maintenance Organization (HMO): An HMO is an organization that provides comprehensive health care, treatment, preventative care, and hospitalization to voluntarily enrolled individuals and families in a particular geographic area. Members are limited to care by a specific network of medical providers and hospitals. To receive coverage you must see your Primary Care Physician and get a referral in order to see a specialist. If you use a provider that is not in their network, you will have to pay full price. Typically, there is no deductible or coinsurance associated with these plans, but there are typically admission or co-payment fees should you be hospitalized. Health Savings Account (HSA) Plans: An HSA can be set up by anyone with a high deductible health plan to save money on medical care now, as well as to save for future medical expenses. Pre-tax dollars are deposited into an HSA account which may be used to pay for medical products and services such as doctor visits, hospitalizations, medications, and prescriptions. These plans typically have higher deductibles and lower premiums because the funds in the account are intended to cover most minor medical expenses. Limited Benefit Health Plans: Limited Benefit Health Insurance plans are available to those who have a pre-existing medical condition that prevents them from qualifying for a medically underwritten plan. These plans are guaranteed issue plans and are required to cover anyone who applies, regardless of health status. If you have a pre-existing condition such as heart disease, cancer, AIDS, diabetes, or are currently pregnant, then a Limited Benefit Plan may be the best option for you. Some Limited Benefit policies may have an initial waiting period of up to a year before pre-existing conditions are covered and others will cover you from day one if you are coming off a plan with creditable coverage. Although there are national PPO networks associated with these plans, they pay the same whether you use a doctor or hospital in or out of the network. If you go out of the network, you are usually responsible for filing the claim with the company for reimbursement. Point Of Service (POS) Plans: A POS has similarities to both PPO and HMO plans. You still need to choose a Primary Care Physician who refers you to specialists, should the need arise. However, you do have the freedom to elect to use someone outside the contracted network. Be aware that you will generally pay a higher out-of-pocket fee to visit an out-of-network provider, just as you do with a PPO. If you use providers within the network, you will receive the highest level of benefits. With a POS health plan you have greater freedom, but at a higher cost than an HMO. Preferred Provider Organization (PPO): A PPO is a comprehensive health care plan that offers benefits in and out of their network of doctors and hospitals. Health insurance companies contract with a network of doctors and hospitals that have pre-negotiated contracted rates for services. These programs often have a stop loss which limits your out-of-pocket expenses. You usually have a deductible and co-insurance that you are responsible to pay should you need testing or end up in the emergency room or hospital. There is typically a co-payment for a doctor’s office visit. A major plus in choosing a PPO plan is you do not have to choose a Primary Care Physician and there are no referrals for specialists. You can elect to use a doctor or hospital that is not part of the contracted network, however, your deductible and coinsurance usually increase. Short Term Health Insurance: Short Term Health Insurance or Temporary Health Insurance is useful when you need medical coverage for a short, but defined period of time and need it immediately. It could be because you are between jobs, a temporary employee, or a recent graduate. Short Term Health Insurance plans typically last anywhere from thirty days to one year. These plans should not be overlooked because you never know when you may need to visit the doctor or even suffer an injury or become ill. Small Business Health Insurance: Small Business Health Insurance is a type of healthcare coverage that is available to businesses employing between two and fifty employees. In most cases the coverage cannot be denied and it offers tax advantages to small business owners. Temporary Health Insurance: Temporary Health Insurance or Short Term Health Insurance is useful when you need medical coverage for a short, but defined period of time and need it immediately. It could be because you are between jobs, a temporary employee, or a recent graduate. Temporary health insurance plans typically last anywhere from thirty days to one year. These plans should not be overlooked because you never know when you may need to visit the doctor or even suffer an injury or become ill. Travel Health Insurance: Travel Health Insurance is purchased to provide you with coverage when you're traveling abroad. Types of Life Insurance Programs: Accidental Insurance: Accidental Insurance is a life insurance policy that pays out a lump sum to the policy’s beneficiaries if the policyholder dies as a result of an accident. Accidental Death and Dismemberment Insurance (AD&D): AD&D Insurance is a life insurance policy that pays out a lump sum to the policy’s beneficiaries if the policyholder dies as a result of an accident. This plan also pays out a partial amount, usually half, if the policy holder loses one eye, leg, arm, hand, or foot as a result of a covered accident. If the policyholder loses two or more of any of the qualifying losses, the full cash value of the policy will be paid out.
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