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What
Is An HMO?
- An HMO, health
maintenance organization, is a health
insurance plan that includes a defined
set of physicians and hospitals in a
HMO network. HMO subscribers select a
primary care doctor to serve as the
patient's main contact for health
matters. When a medical service beyond
the scope of the primary care
physician's area of practice is
required, the primary doctor refers the
patient to a specialty doctor within
the network.
What Are The Benefits
Of An HMO?
- Low-cost office visit and
prescription drug co-pays, typically
$10 to $20
- Limited or no hospital deductible
costs
- No paperwork or claim forms to
submit for reimbursement
- Usually no pre-existing condition
clause to limit coverage of an existing
illness or condition
- Out-of-state emergencies are
covered as an in-network service
What
Are The Negatives Of An HMO?
- Choice of doctors and hospitals is
limited to the HMO network
- Out-of-network services are not
covered, even if seeking treatment for
a life-threatening illness from a
nationally known physician or medical
facility such as the Mayo Clinic or
Cleveland Clinic
- It may be difficult to schedule an
appointment quickly
- Referral to a specialist may be
difficult to obtain due to the
financial arrangements of an HMO
- Care for sudden illnesses or minor
injuries after hours or on the weekends
must be sough at an HMO affiliated
urgent care center
What
Is A PPO?
- A PPO, a
Preferred Provider Organization, is
similar to an HMO in that co-pays for
office visits and prescription drugs
tend to be low. Unlike an HMO, however,
a PPO does not require subscribers to
select a primary care physician.
What
Are The Benefits Of A PPO?
- Subscribers are free to choose a
physician, including specialists,
without a referral
- No paperwork or claim forms to
submit for reimbursement
- Limited or no hospital deductible
costs
- PPO networks may offer a larger
selection of physicians and specialists
than an HMO
- Out of network services are
typically covered when necessary for a
unique or life-threatening illness,
although there may be a out-of network
charge
What Are The Negatives
Of a PPO?
- Most PPOs cover out-of-state
services while traveling, although
higher out-of-pocket costs may be
incurred than in one's home state
- Out-of-network services require
higher out-of&endash;pocket costs,
although maximum out-of-pocket expenses
tend to be reasonable
What
Is POS?
- POS, Point of
Service, works like an HMO in that
subscribers choose a primary care
doctor. Out of network treatment can be
sought; however, it will be subject to
increased out-of-pocket costs for the
subscriber.
What
Is Traditional Coverage?
- A traditional
coverage plan includes a broad array of
health care providers and medical
facilities. Traditional plans have high
monthly premiums and individual or
family deductibles from $250 to
$10,000. After a deductible has been
met, services are usually covered at
80% or more. Traditional plans require
participants to pay up front for
services and submit a reimbursement
request via claim forms that may take
weeks or longer to process. Traditional
coverage, the most expensive coverage
available, was once considered the gold
standard of insurance plans. However,
due to spiraling healthcare costs,
traditional plans are quickly falling
out of favor with insurance companies
and employers.
What
Are Disability Plans?
- Disability
plans are income insurance plans that
cover a certain percentage of one's
income in the case of a career-limiting
accident or illness. At the age of #,
an individual is more likely to become
disabled than he or she is to die. That
is why disability insurance is a
critical component of a financial
protection plan.
What
Is A Short-Term Disability Plan?
- A short-term
disability (STD) plan typically
provides benefits from the first day of
an accident or the eighth day of an
illness to a maximum of 26 weeks. STD
plans usually cover 66% of one's weekly
income, depending on the coverage
option selected.
What
is a Long-Term Disability Plan?
- A long-term
disability plan (LTD) typically begins
after the STD plan has expired;
however, it may be purchased separately
and exclusive of an STD plan. LTD plans
provide income protection for extended
illnesses or injuries, from two years
to age 65 or longer.
What
Is A Cafeteria Plan/Section 125?
- Section 125 of
the Internal Revenue code allows
employee premium contributions for
group insurance plans to be deducted
from one's paycheck on a pre-tax basis,
increasing the employee's take-home pay
and allowing the employer to exclude
these contributions from most payroll
taxes. With section 125 plans,
employees are usually offered a
"cafeteria style" plan of benefit
options and the freedom to elect how
they will spend their allotted amount
of employer-provided benefit dollars.
How Does An Employer
Benefit From A Cafeteria Plan?
- Reduced payroll-related taxes
- Improved employee benefit cost
control
- Enables employers to ultimately
shift more premium increases to
employees
- Requires minimal start-up
investment
How Does An Employee
Benefit From A Cafeteria Plan?
- Increased take-home pay
- Reduced federal income tax
- Reduced state tax
- Reduced social security tax
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