Open Enrollment FAQs for the Employee
Open Enrollment FAQs
At MAR Financial Group, we know how stressful the short open enrollment period can be for employees. Take a look at these Frequently Asked Questions about open enrollment below and contact us to learn more about the types of coverage available to you.
Open Enrollment FAQs for the Employee
What is the difference between an HMO/PPO/EPO?
- HMO: Health Maintanence Organization. Generally allows the lowest premium, participation in an HMO requires the patient to get a referral prior to seeing a specialist. HMO doctor networks also tend to be smaller.
- PPO: Preferred Provider Organization. A PPO offers patients greater flexibility, but at a higher premium level. Participation in a PPO gives the patient the freedom to see any doctor – general or specialist – they wish, without requiring a referral.
- EPO: Exclusive Provider Organization. Similar to a PPO with one major exception: EPO plans do not cover out-of-network charges.
What is an Individual deductible?
The Individual deductible is the amount, out of pocket, which you have to spend in order for the major medical benefits to kick in.
What is a Family deductible?
A Family deductible means that the medical plan will start to pay expenses after you and your family members have first paid out of pocket expenses that are equal to the family deductible amount shown on the rate sheet. Any combination of covered family members can be used to meet this deductible.
What is the difference between a co-pay vs. co-insurance?
Coinsurance is the percentage of eligible health care expenses the plan pays after you meet your required deductible. You are responsible for paying the remaining difference. Copays are a defined amount you are asked to pay for covered, routine visits such as doctor exams, as well as many prescriptions. Copays do not apply towards your deductible or out-of-pocket maximum.
What is an Out-of-Pocket maximum?
The maximum amount allowed by law in which you can spend on covered health expenses prior to the insurance plan covering 100% of the cost for covered items. Just as with deductibles, there are Individual Out-of-Pocket maximums and Family Out-Of-Pocket maximums.
I like that my health policies now have no pre-existing coverage limitations and maximum out-of-pocket expenses. How to I ensure that this continues?
These protections are part of the Affordable Care Act, commonly known as Obamacare. So if you wish to have pre-existing condition coverage from day 1 and appreciate knowing that there is a maximum amount you will have to spend on medical coverage, let your Congresspersons and Senators know that you support the ACA.
What is the value of Accident, Cancer, Disability and other policies?
Voluntary Insurance such as accident, cancer, disability, and more, pays you or your beneficiaries a defined cash payment which can be used to pay deductibles, co-insurance, bills, living expenses, and more. They are a perfect complement to your health plans, especially those who selected a High Deductible plan.
Another way to think about it: Health insurance makes sure the doctor gets paid. The voluntary insurances make sure you get paid.
So… really… how does this work?
Great question! There are four levels to how payments work with ACA plans:
- Copays. You pay copays for regular doctor visits and other defined visits (OB-GYN, etc). Copays do NOT apply to your deductible.
Deductible. You break your arm, go to the hospital and have it set. Two things are at play here:
- If in-network, you get a negotiated rate with the hospital.
- You are responsible for the entire cost of the broken arm, up until you hit your deductible. Once you hit your deductible…
- Co-Insurance kicks in. You pay a percentage of the health coverage costs which accrue after you meet your deductible, until you hit…
- Out-Of-Pocket maximum. Once you hit this, the policy pays 100% of all covered costs.
Sam has a policy with a $3,000 deductible, $7,000 max out of pocket, 80% co-insurance (insurance carrier pays 80%, Sam pays 20%). Gets into a car wreck, incurs $67,000 in medical bills.
- The first $3,000 of those medical bills have to come out of Sam’s pocket
- Of the remaining $64,000, co-insurance applies: $64,000 X .20 = $12,800
- HOWEVER, there is a $7,000 maximum out-of-pocket expense on his policy. Sam has already paid $3,000, so of the above $12,800, Sam owes $4,000 and the insurance company pays $8,800
And as Sam has hit the maximum out of pocket, the final accounting is Sam pays $7,000 and the insurance company pays $60,000.
In addition, for the rest of the plan year, all of Sam’s medical costs will be covered at 100%, having already paid the out-of-pocket maximum because of the car accident.