Insurance Alphabet: Letter F

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F is for:

“Full Time Equivalent Employee”

Full Time Equivalent Employees (FTE): are employees who do not work full-time (defined as 30 or more hours per week) in your business or organization, but do count towards the full-time equivalent employee count. In other words, YES… part-time employees do count towards your overall employee grand total.

“Full Time Equivalent Employees” is extremely important because it is the sole factor in healthcare reform that determines which employers are mandated to provide health insurance coverage, and which employers are not mandated to provide health insurance coverage. Starting on January 1st, 2015, employers with 50 or more “full time equivalent employees” must provide adequate health insurance coverage to their employees, or face a tax penalty.

For additional detailed information about Full Time Equivalent Employees, please read this blog post.

Thanks for stopping by, we hope you found our information to be valuable. Check back at our blog to get further information about funding healthcare. Also, please share with your friends, clients, colleagues, and family. Here are a few of our other information outlets:

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Insurance Alphabet: Letter E

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E is for:

“Exchange”

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Exchange: When used as a noun, an exchange is a place where goods or services are bought or sold. In this blog post, we’re specifically referring to exchanges that sell major-medical health insurance policies. These are otherwise known as health insurance exchanges.

The reason that we’ve selected this topic is because you’re going to hear a lot about “exchanges” over the next few years (and into the future in general), when it comes to health insurance. There are two types of health insurance exchanges:

  1. Public Health Insurance Exchanges
  2. Private Health Insurance Exchanges

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A Public Health Insurance Exchange is an exchange that is set up, funded, and administered by the government. There are a combination of ways that this takes place:

  • A) State-only administered exchanges.
  • B) Joint state/federally administered exchanges.
  • and C) Exchanges administered by the federal government only.

Public Health Insurance Exchanges were a large part of healthcare reform (ACA/Obamacare). These are the new exchanges that are mandated by the law. The purpose of these exchanges is to help expand affordable coverage to the uninsured. The state exchange in California is called “Covered California.”

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A Private Health Insurance Exchange is an exchange that is set up, funded, and administered by private parties. In other words, the government is not involved (examples of private parties: employers and their employees).

There are a number of different strategies when setting up a Private Health Insurance Exchange. Most of these strategies revolve around the “defined contribution” health planning concept that we’ve discussed in past blog posts. This concept (defined contribution) is gaining importance as we move forward in health benefits planning. Third party administrators (or TPAs) facilitate the administration of Private Health Insurance Exchanges.

Thanks for stopping by, we hope you found our information to be valuable. Check back at our blog to get further information about funding healthcare. Also, please share with your friends, clients, colleagues, and family. Here are a few of our other information outlets:

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Insurance Alphabet: Letter D

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D is for:

“Deductible”

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Deductible: is the initial amount of medical expenses an individual must pay before he or she will receive benefits under a medical expense plan.

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Example:

Plan Type: PPO

Co-Payment: $30 primary care, $50 specialist

Deductible: $3000

Coinsurance: 70%/30%

Annual out of Pocket Maximum: $5000

In the PPO listed above, the deductible is $3000. The $3000 deductible must be met before any other benefits are payable.

However, sometimes primary and specialty care office visits are excluded from having to meet the deductible. Other additional services may also sometimes be excluded (ie: things like lab work and x-rays, etc). It’s important to understand what is covered before the deductible has to be met. In addition, it’s also important to understand whether or not the deducible counts towards the plan’s annual out of pocket maximum.  

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Important note about deductibles: The deductible is one of the major components in a health plan that regulates premium prices. The higher your deductible is (ie: the more you pay out of pocket), the lower your premium is. The lower your deductible is (ie: the less you pay out of pocket), the higher your premium is. The reason this is important to note, is because Consumer Directed Healthcare typically uses higher deductible plans in order to lower premiums. With these higher deductibles, you’ll want to look into additional security with money-smart concepts with things like HRAs, HSAs, etc. They can help you retain premium dollars. For additional information about Consumer Directed Healthcare click here.

Thanks for stopping by, we hope you found our information to be valuable. Check back at our blog to get further information about funding healthcare. Also, please share with your friends, clients, colleagues, and family. Here are a few of our other information outlets:

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Insurance Alphabet: Letter C

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C is for:

“COINSURANCE”

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Coinsurance (or co-insurance): is the percentage of covered expenses under a major medical plan that will be paid once the deductible is satisfied.

Said another way, it’s the portion of the bill that the policyholder is responsible for, once the deductible has been met. 

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Example:

Plan Type: PPO

Co-Payment: $30 primary care, $50 specialist

Deductible: $3000

Coinsurance: 70%/30%

Annual out of Pocket Maximum: $5000

Based on the example above, once the $3000 deductible has been paid, the policyholder is then responsible for 30% of covered expenses (the coinsurance) up to $5000 (the out of pocket maximum). The insurance company pays the remaining covered expenses.

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In many cases, the use of coinsurance is most common with a hospital stay. However, in some cases (depending on the structure of the insurance contract you have in place), there may be coinsurance for outpatient surgeries, basic physician services, primary care, etc.

Thanks for stopping by, we hope you found our information to be valuable. Check back at our blog to get further information about funding healthcare. Also, please share with your friends, clients, colleagues, and family. Here are a few of our other information outlets:

Home Page: https://policyadvantage.com

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Insurance Alphabet: Letter B

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B is for:

“BROKER”

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Broker: is one that negotiates insurance contracts on behalf of the insured, therefore representing the client’s interest, not the insurer’s.

Brokers already have established relationships with the companies that they contract with. Because of this, they are able to navigate for the insurance consumer more easily. Areas of advantage: https://schweizer-apotheke.de/

  • Customer Service (changes, enrollment, administration, etc)
  • Ability to Expedite Processes (saving the consumer time, and making things more convenient)
  • Brokers are “Fluent in Insurance Language” (able to communicate w/ companies efficiently)
  • Product Knowledge (knowing the insurance company’s products inside-and-out)

Give yourself the advantage, and put a medical benefits broker to work for yourself or your company today.

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Insurance Alphabet: Letter A

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A is for:

“ADVERSE SELECTION”

GreyAAdverse selection is the tendency for higher risks to seek more insurance coverage than lower risks.

Example: A 57 year old female with diabetes and a history of chronic illness would have a tendency to seek more health insurance coverage than a healthy 23 year old male.

Interesting Point: As it stands (starting in 2014) adverse selection will no longer be an underwriting consideration in the health insurance industry. Why? Because those who apply for coverage, must be accepted. This is known as guaranteed issue.

Thanks for stopping by, we hope our information was valuable to you. Check back at our blog to get further information about funding healthcare. Also, please share with your friends, clients, colleagues, and family. Here are a few of our other information outlets:

Home Page: https://policyadvantage.com

Twitter: http://www.twitter.com/policyadvantage

Facebook: http://www.facebook.com/policyadvantage

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