With the turn of the New Year, many Ohioans with group health insurance have been inundated with information regarding new or renewal health insurance policies and may be asking, “What is this information, what does it mean, and what am I supposed to do with it?”
According to a 2009-2010 report by the Kaiser Family Foundation, 53 percent of Ohioans have health insurance through their employer and many have questions about their benefits, especially at the beginning of a calendar year. Employees may be directing these questions to you or your employee benefits managers.
“December is one of the busiest times of the year in terms of sending plan and benefit information to new and existing members, and this often results in a considerably higher call volume to customer service at the beginning of the year,” explains Nancy Markle, vice president of client services at SummaCare, Inc. “Members have a lot of questions regarding how their benefits work, even more so if they have a new benefit plan or have switched to a different carrier.”
Smart Business spoke to Markle about the information your health insurance company is required to provide its enrollees and how to be prepared should you receive these questions.
What information about a policy does your health insurance carrier have to provide?
Group health insurance information requirements are governed by individual states, and the information insurers are required to provide may vary by state. In Ohio, enrollees in a fully insured group plan receive a document called a Certificate of Insurance (COI), and the Ohio Department of Insurance (ODI) has a summary of items that must be included in this document. These items include, but are not limited to, information regarding provisions, appeals, services covered and not covered and policyholders’ rights.
In addition to a Certificate of Insurance, many enrollees will receive a Schedule or Summary of Benefits (SOB). This document details the services covered under the policy and the deductibles, copays and coinsurance amounts associated with these services. If applicable, the SOB will detail this information for both in- and out-of-network coverage.
It is important for both you and enrollees to keep these documents and any addendums to the documents so you have a current and up-to-date record of what your health insurance policy includes and excludes as services can change throughout the year.
What are some health insurance terms that frequently cause confusion?
Many calls that a health insurance company customer service department receives are benefit-related and often just require a little explanation. This often includes defining commonly used industry terms to someone who is not familiar with health insurance lingo.
Two frequently misunderstood terms that go hand-in-hand are deductible and coinsurance. A deductible is a specified dollar amount of covered medical expenses that an enrollee must pay before an insurance policy will pay for its part of the service or treatment.
Coinsurance is the amount an enrollee pays for covered service or treatment after the deductible has been met. Coinsurance is usually based on a percentage. For example, if your policy has an in-network deductible of $1,000 and an in-network coinsurance of 80 percent, the beneficiary must pay $1,000 out-of-pocket before the 80 percent coinsurance for in-network services will apply. This means that the enrollee will pay the contracted rate for any services received that have a coinsurance until the $1,000 deductible is met.
Copayment, or copay, is another term that often causes confusion. A copay is a flat fee an enrollee pays for a covered service or treatment. Common services which may require a copay include office visits and urgent care and/or emergency room visits. Out-of-pocket costs for copays do not always apply toward the deductible, so understanding your plan is important to managing health care costs.
It is important to understand what covered service copays or coinsurance amounts apply to the deductible, as some out-of-pocket costs do not apply to the deductible amount.
Other terms that can be confusing are premium and out-of-pocket maximum. Premium is the amount paid for the overall policy (usually through the employer) on a monthly, quarterly or annual basis. Out-of-pocket maximum refers to the maximum amount of coinsurance or copays an enrollee must pay before your health insurer starts paying 100 percent of covered medical bills. This amount differs from the deductible because it is the maximum dollar amount an enrollee will be required to pay during the benefit year (outside of the premium), and it may or may not include deductible or copays. For example, if your plan has an out-of-pocket maximum of $5,000 and you’ve reached your deductible and have paid eligible copays and coinsurance that total $5,000, your health insurer will pay 100 percent of covered service and treatment costs for services received in-network. This typically occurs when a person is receiving ongoing treatment for a chronic condition, has utilized many of the treatments and services covered under his or her plan or has a large medical expense during a calendar year. Most, if not all, COI documents contain a definition section, so your COI is a good resource to help define other common insurance terms.
How can enrollees make the most of their health insurance benefits?
Enrollees in a group policy can make the most of their benefits by ensuring they understand their plan and the services and treatments that are covered or excluded. To receive benefits at a richer level, seek care from in-network providers and hospitals.
Enrollees should also familiarize themselves with any value-added services. Insurance companies will often offer additional services at little or no-cost, including resources to help you quit smoking, receive diabetic supplies and discounts on vision services and more.
Finally, if beneficiaries find anything confusing, they should contact the insurer for an explanation. Carriers realize that informed members are more satisfied members.
Some information obtained from the Shopper’s Guide to Health Insurance, Ohio Department of Insurance. For more information, visit http://www.insurance.ohio.gov.
Nancy Markle is vice president of client services with SummaCare, Inc. Reach her at [email protected] or (330) 996-8466.