You can save yourself considerable confusion, delay, and money if you understand your health plan benefits before illness or injury strikes. If you have group plan, you will receive a certificate of insurance that outlines your benefits. If you have purchased a plan on your own, you should become familiar with your health insurance policy or your HMO contract. Here are some questions to ask yourself and background information to understand what you find in these documents.
What Types of Care Are Covered?
The typical medical care plan covers hospital room and board expenses, surgical procedures both as an inpatient and outpatient, prescription drugs, diagnostic tests, visits to the doctor’s office, and many other aspects of health care. Dental and vision care are generally not covered. You can buy separate dental expense insurance possibly as a group plan through your employer) to provide reimbursement for dental care expenses. Orthodontic treatment is typically excluded. High deductibles and coinsurance requirements and low policy limits can make dental plans less beneficial than they might appear. Vision care insurance provides reimbursement for eye examinations and purchase of glasses and contact lenses. Vision care insurance is typically written on a group basis as an employee benefit. For an individual, vision care insurance is probably not a good buy because the highest expenses for eye care arise out of diseases and injuries to the eyes, which would be covered under basic medical care plans.
Health plans contain provisions that exclude coverage for certain preexisting conditions. These are medical conditions or symptoms that were known to the participant or diagnosed within a certain time period, usually one or two years, before the effective date of the plan. Preexisting conditions can be excluded for a period of time after a plan goes into effect or, possibly, permanently. Group plans exclude fewer preexisting conditions than individual plans. Plans may also dictate waiting periods for specific types of expenses. For example, maternity benefits often have a one-year waiting period.
Who Is Covered?
Medical care plans can be written to cover an individual, a family, or a group. Few misunderstandings arise when an individual is the focus of the coverage, but family policies can be more complex. Generally, a family consists of a parent or parents and dependent children. Are children who are born while the plan is in effect automatically covered from the moment of birth? What about stepchildren? At what age are children no longer covered? These questions must be answered to ensure that all family members receive adequate protection. The question of who is covered under a group plan is similarly important. All group members are usually covered, but new members may have to endure a waiting period before receiving protection. If the group includes the employees of a business, different protection may be offered for full-time and part-time employees. The family of the group member may be covered, but, once again, the definition of “family” must be understood
When Does Coverage Begin and End?
Individual and group medical care plans are usually written on an annual basis. An annual plan beginning on January 1 will start at 12:00 a.m. that day and end at 11:59 p.m. on December 31. Any illness that begins during the year will be covered. But will coverage continue if the plan expires while you are in the hospital? The answer is usually yes. Similarly, a surgical procedure performed after a plan expires but for an illness or injury for which treatment was originally begun during the plan period may be covered Health care plans must be renewed each year. If you are in a group plan, you can renew your participation during the plan’s open-enrollment period. Renewal of individual plans is handled in one of three ways. Optionally renewable policies may be canceled or changed by the plan provider but only at the time of expiration and renewal, often with 30 days’ notice. Guaranteed renewable policies must be continued in force as long as the policyholder pays the required premium. Premiums may change but only if the change applies to an entire class of participants rather than to an individual participant. Guaranteed renewability is recommended for medical care plans and long-term care insurance. Noncancelable policies must be continued in force without premium changes up to age 65 as long as the participant pays the required premium. Noncancelable policies are recommended when buying disability income insurance.
What Types of Care Are Covered?
The typical medical care plan covers hospital room and board expenses, surgical procedures both as an inpatient and outpatient, prescription drugs, diagnostic tests, visits to the doctor’s office, and many other aspects of health care. Dental and vision care are generally not covered. You can buy separate dental expense insurance possibly as a group plan through your employer) to provide reimbursement for dental care expenses. Orthodontic treatment is typically excluded. High deductibles and coinsurance requirements and low policy limits can make dental plans less beneficial than they might appear. Vision care insurance provides reimbursement for eye examinations and purchase of glasses and contact lenses. Vision care insurance is typically written on a group basis as an employee benefit. For an individual, vision care insurance is probably not a good buy because the highest expenses for eye care arise out of diseases and injuries to the eyes, which would be covered under basic medical care plans.
Health plans contain provisions that exclude coverage for certain preexisting conditions. These are medical conditions or symptoms that were known to the participant or diagnosed within a certain time period, usually one or two years, before the effective date of the plan. Preexisting conditions can be excluded for a period of time after a plan goes into effect or, possibly, permanently. Group plans exclude fewer preexisting conditions than individual plans. Plans may also dictate waiting periods for specific types of expenses. For example, maternity benefits often have a one-year waiting period.
Who Is Covered?
Medical care plans can be written to cover an individual, a family, or a group. Few misunderstandings arise when an individual is the focus of the coverage, but family policies can be more complex. Generally, a family consists of a parent or parents and dependent children. Are children who are born while the plan is in effect automatically covered from the moment of birth? What about stepchildren? At what age are children no longer covered? These questions must be answered to ensure that all family members receive adequate protection. The question of who is covered under a group plan is similarly important. All group members are usually covered, but new members may have to endure a waiting period before receiving protection. If the group includes the employees of a business, different protection may be offered for full-time and part-time employees. The family of the group member may be covered, but, once again, the definition of “family” must be understood
When Does Coverage Begin and End?
Individual and group medical care plans are usually written on an annual basis. An annual plan beginning on January 1 will start at 12:00 a.m. that day and end at 11:59 p.m. on December 31. Any illness that begins during the year will be covered. But will coverage continue if the plan expires while you are in the hospital? The answer is usually yes. Similarly, a surgical procedure performed after a plan expires but for an illness or injury for which treatment was originally begun during the plan period may be covered Health care plans must be renewed each year. If you are in a group plan, you can renew your participation during the plan’s open-enrollment period. Renewal of individual plans is handled in one of three ways. Optionally renewable policies may be canceled or changed by the plan provider but only at the time of expiration and renewal, often with 30 days’ notice. Guaranteed renewable policies must be continued in force as long as the policyholder pays the required premium. Premiums may change but only if the change applies to an entire class of participants rather than to an individual participant. Guaranteed renewability is recommended for medical care plans and long-term care insurance. Noncancelable policies must be continued in force without premium changes up to age 65 as long as the participant pays the required premium. Noncancelable policies are recommended when buying disability income insurance.
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