Whether you are uninsured, or just want to explore new options, the new health insurance marketplace will give you and your family choices. Starting October 1st, 2013, you will be eligible to enroll in health insurance via the new health insurance marketplaces (for coverage starting January 1st, 2014). Here’s step-by-step check list to ensure you are prepared for the October 1st, 2013 open enrollment.
Step 1 – Find out whether your employer will offer group health insurance post-2014!
There are two primary categories of health insurance to choose from:
- Individual health insurance,
- Group health insurance.
1) Individual Health Insurance
Individual health insurance plans are purchased by individuals to cover themselves or their families. Anyone can apply for individual health insurance. In 2014, insurance companies will no longer be able to decline individuals for health insurance based on a pre-existing medical condition. Also, in 2014, there will be new special tax incentives available to businesses and employees when employees purchase individual health insurance.
2) Group Health Insurance
Group health insurance plans are a form of employer-sponsored health coverage. Costs are usually shared between the employer and the employee. Coverage can also be extended to dependents.
Many small businesses (those under 50 employees) are expected to terminate group health insurance (in favor of individual health insurance) in 2014.
Step 2 – Learn about different types of health insurance!
Whether you’re looking at individual health insurance or group health insurance, there are several different types of health plans available. The three you should know are:
- PPO Health Insurance Plans,
- HMO Health Insurance Plans,
- HSA-Qualified Health Insurance Plans, and
The plan type that is best for you and your employees depends on what you and your employees want, and how much you are willing to spend. Here’s a brief review of these popular types of health insurance plans:
1) PPO Health Insurance Plans
PPO or “Preferred Provider Organization” plans are the most common. Employees covered under a PPO plan need to get their medical care from doctors or hospitals on the insurance company’s list of preferred providers (in-network providers) in order for claims to be paid at the optimal level.
2) HMO Health Insurance Plans
HMO stands for “Health Maintenance Organization.” These plans offer health care services through a network of providers that contract exclusively with the HMO. Employees participating in HMO plans will typically need to select a primary care physician (“PCP”) to provide most of their health care and refer them on to HMO specialists as the need arises.
3) HSA-Qualified Health Insurance Plans
HSA-qualified plans are a unique type of PPO plan that is designed specifically for use with Health Savings Accounts (HSAs). An HSA is a special bank account that allows participants to save money pre-tax, and can be used specifically for medical expenses in the future. Health Reimbursement Arrangements (HRAs) can also be used by employers in place of HSAs due to their tax advantages for employers.
Step 3 – Familiarize yourself with health insurance terminology!
When shopping for a health insurance plan, one of the challenges people face is understanding health insurance terminology. Here are five key health insurance terms you and your employees need to understand:
- “Premium” – The amount you pay to the health insurance company each month to maintain your health insurance.
- “Copayment” – Your copayment, or “co-pay,” is the specific dollar amount you may be required to pay up front for a specific type of service, such as doctor or specialist visits.
- “Deductible” – Your annual deductible is the amount you may be required to pay out-of-pocket before the insurance company will begin paying for your covered medical claims.
- “Coinsurance” – The amount that you are obliged to pay for medical services after you’ve satisfied any copayment or deductible required by your health insurance plan.
- “Max Out-of-Pocket (OOP) Costs” – sets a limit to your annual financial liability for any given year.
Some questions you might want to ask include:
- Can I stay with my current doctor?
- Will this plan cover my health costs when I’m traveling?
- Will I be eligible to contribution to an HSA ?
- How will this cover my pre-existing condition?
Step 4 – Gather basic information about your household income!
Beginning 2014, individuals will have access to tax subsidies to purchase private health insurance through the public health insurance exchange. The subsidy caps the cost of individual health insurance at 2% – 9.5% of their household income if their household income is less than 400% above the federal poverty line. This equates to roughly $90,000 per year for a family of four.
Starting in October 2013, you will be able to get information about all the plans available in your area.