• What’s the difference between “community rating”, "demographic rating" and “experience rating”?

 Community rating is a method of calculating premiums based on the average of actual or projected costs of services used by all subscribers in a specific geographic area. 

Demographic rating means that the carrier is calculating a prospective organization's premium rates based on the rates of groups they currently insure that have similar demographics.

Experience rating calculates a group's premiums by evaluating previous claims for that specific group or pool of groups only.

If a group keeps their claims low and does not predict any sharp increases, then switching to an experience rating could be helpful in keeping their premiums to a minimum.  Subscribers in the non-profit community tend to be high utilizers and therefore are generally not good candidates for the experience rating system.

• What are the most common types of health insurance plans?

HMO- (Health Maintenance Organization) is the most commonly utilized types of insurance plans. With an HMO, you are required to select a primary care physician, who “manages” your health care. You will need referrals for specialists, treatments, etc. and, like EPOs, there is no out-of-network coverage. There is no participation requirement for an HMO and there are many participating providers in the network.

EPO- (Exclusive Provider Organization) is a relatively new type of insurance plan that is a cross between a PPO and an HMO. Like a PPO, there are no referrals needed. Like an HMO, there is no out-of-network coverage. EPOs have participation requirements and therefore tend to be less expensive.

POS- (Point of Service) A primary care physician is required, as are referrals, but participants can seek treatment out of network, like a PPO, paying a pre-determined deductible and coinsurance for these services.

PPO- (Preferred Provider Organization) Subscribers of this plan do not need to designate a primary care physician and therefore will not need referrals. There are out of network benefits, which can be utilized by paying a set deductible coupled with coinsurance.

• Can you provide definitions for frequently used insurance terms?

Broker- A person who functions as an intermediary between two or more parties in negotiating agreements, bargains, or the like.

Carrier- An organization that provides health insurance coverage (ex: Empire, CDPHP).

Claim- Payment in accordance with an insurance policy or other formal arrangement.

Coinsurance- an agreement between the insured and insurer to split incurred costs using percentages. Many policies have an 80/20% coinsurance split, with the insurer paying 80%.

Co-pay- a set out-of-pocket expense paid by the insured party for pre-determined treatments/medical care.

Deductible- a set out-of-pocket expense that is paid by the insured and must be exhausted before the insurer will take over paying for any expenses.

PCP- Primary Care Physician

Premium- the amount paid (usually monthly) by the insured to the insurer for coverage specified in a contract.

Stop-loss- also know as “out-of-pocket max”; the most the insured will pay out of pocket in a plan year.

• What are participation requirements?

Participation requirements are used by carriers to get more people on their particular plan, therefore balancing the risk as much as possible.  An EPO plan has participation requirements, frequently asking for 50% of the total eligible enrollees.

• What are “tier structures”?

There are three different tier structures to choose from.

• What should I know about riders?

There are many different riders you can add to your health insurance policy.  Some of the most frequently chosen are:

Prescription (Rx)- adjusts the co-pays and/or adds deductibles.

Student- allows you to prolong coverage for your dependents if they are full time students.

Domestic partner- allows domestic partner (same or opposite sex) to be added as dependents.  This is usually added for no extra charge.

Vision- adds vision check ups, your choice of frequency, as well as optional hardware coverage.

Mental Health- while many plans incorporate Timothy’s Law mandates directly into the policies, some carriers have it available as an optional rider instead.