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Terms and Definitions

January 1, 2010

 

(listed alphabetically)

COBRA alternatives - Health plans that are designed to accomplish the same goal as COBRA coverage but cost less.  Some cover pre-existing medical conditions but most do not.  The most common type is short term medical insurance.

COBRA coverage -continuation of group coverage after you no longer meet the group plan eligibility requirements, usually because of a termination of employment.  It is meant to provide continuous coverage for pre-existing conditions until you are covered under another employer-sponsored health plan.  This coverage is only available if the employer has more than 25 employees so employees of smaller businesses are not eligible.  This is generally the most expensive type of health insurance, but it does provide the best continuous coverage for pre-existing conditions.  Usually this coverage can be kept in force for up to 18 months following termination of employment.

Co-insurance - If your provider does not take assignment of your insurance as full payment for your bill, then this is the portion of the bill that you may be required to pay.  A common formula is 20% of the first $5000 of expenses.   However, our experience is that the vast majority of medical providers accept assignment of private insurance as full payment after you have paid your deductible.

Deductible - This is the amount of medical bills that you pay before your insurance "kicks in" to pay for any medical bills.  For example, assume your policy starts on January 1 and has a $500 per person per year deductible.  You would pay all of your doctor visits, prescriptions and lab test until you paid out a total of $500.  Then the insurance starts to pay.   Deductibles are typically set "per year", "per policy" or "per person".

Dental Discount Plans - These plans provide immediate reductions in fees for using participating dentists only.  There is no waiting period.  These plans are much less expensive, typically only $10 per household per month if combined with certain medical insurance or about $25 as a stand-alone benefit .

Group health insurance is available to the full time employees of qualifying businesses.  A qualifying business is one that has been in business for at least 6 months and can provide a state quarterly wage tax return as evidence of employees on payroll.  The insurance is guaranteed to be issued to all eligible employees and picks up coverage for any pre-existing medical conditions.  This tends to be the most expensive type of health insurance.

Health Savings Account (HSA) - a tax-free, tax-deductible account used to pay for medical, dental and health expenses not covered by insurance.  They are most popular with self-employed individuals but are also available to small businesses.  (HRA plans are usually a better choice for small groups).  HSA plans must meet both federal tax requirements as well as state insurance requirements.  MedSave.com offers HSAs at no charge as an option with new qualifying health insurance plans or for a fee if you already have qualifying health insurance.  HSAs are not available in all states and are not an economically viable option in some states.

Healthcare Reimbursement Account or Health Reimbursement Arrangement (HRA) - Tax-free, tax-deductible accounts used by a business to pay for medical, dental and health expenses of employees that are not covered by insurance.  They are more flexible than medical savings accounts and are more popular for small businesses.  HRAs are available in all states and with (or without) all health insurance plans.

Individual Dental Insurance - after the policy has been in force for 12 months, these plans pay a portion of dental expenses according to a benefits schedule.  Benefits are significantly reduced n the first 12 months of the policy.  May be used with any dentist because the payment is due to the policyholder unless your assign payment to a dentist.

Managed Care Plans - Group or individual health plans that include most Blue Cross/Blue Shield plans and HMOs.  These plans are designed to help you manage the cost of medical treatment for pre-existing medical conditions.  Most are Open enrollment", although there may be a waiting period until your pre-existing condition is covered.  These plans tend to limit your choices in selecting treatment and providers.  These plans are not handled by MedSave.com.

Medical Information Bureau (MIB).  This is similar to a consumer credit bureau in that insurers report individual health private personal information to a database that is used for insurance underwriting purposes.

Medical Records - the collective notes from your physicians' files.  We recommend that every person should keep a copy of their own medical records in a safe place and have it updated every couple of years.

Medical Savings Account (MSA) - a tax-free, tax-deductible accounts used to pay for medical, dental and health expenses not covered by insurance.  They are most popular with self-employed individuals but are also available to small businesses.  (HRA plans are usually a better choice for small groups).  MSA plans must meet both federal tax requirements as well as state insurance requirements.  MedSave.com offers MSAs at no charge as an option with new qualifying health insurance plans or for a fee if you already have qualifying health insurance.  MSAs are not available in all states and are not an economically viable option in some states.  MSAs were replaced with Health Savings Accounts in 2004.

Private Individual Health Insurance - These plans are available in most states to relatively healthy individuals but are not suitable for people with significant pre-existing conditions. These plans offer the most generous coverage, allowing a choice of any doctor or hospital anywhere in the U.S. (some are worldwide) without a referral.  These are the most popular type of coverage offered at MedSave.com because it is the least expensive plans.  Most plans are issued online, but mail-in applications are used in some situations.

Short Term Dental Insurance - This is a misnomer or a misunderstanding.  There is no such product available.  Regular dental plans are available for short periods of time but often the design of the plan makes them less effective for this purpose.

Short Term Health Insurance - This is coverage that has a stated maximum length of coverage, usually from 15 days to 3 years.  It is less expensive than traditional health insurance because it has a defined ending date.  Where state law and the insurance company allows, you can continue to re-apply for consecutive plans for as long as you need coverage.  It has become popular in recent years following the observation that almost everyone who buys health insurance switched to a different plan within a few years.

Underwriting - The process of having the insurer review your application for approval.  It sometimes involves a review of your medical records.  This process typically takes from one to three weeks.



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