What is a Health Reimbursement Arrangement (HRA)?
A Health Reimbursement Arrangement (HRA) is an employer-funded medical reimbursement plan. The employer sets aside a specific amount of pre-tax dollars for employees to pay for health care expenses on an annual basis. Based on the plan design, HRAs can generate significant savings in overall health benefits.
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Can I be denied for coverage on a group plan based on my medical history?
No. A group health plan may not establish eligibility for enrollment based on an individual's or a dependent's health status, physical or mental medical condition, claims experience, receipt of health care, medical history, genetic information, evidence of insurability, or disability.
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What is a deductible?
The deductible refers to the amount of money that the insured would need to pay before any benefits from the health insurance policy can be used. This is usually a yearly amount so when the policy starts again, usually after a year, the deductible would be in effect again. Usually there are separate individual deductible amounts and total family deductible amounts.
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What is the difference between co-insurance and a co-pay?
A co-insurance is the amount that you may be required to pay for covered medical services after you have satisfied any plan deductible. A coinsurance is typically expressed as a percentage. A common co-insurance split is 80/20. This means that the insurance company will pay 80% of the procedure and the insured is required to pay the other 20%. A co-pay is a fixed amount that the insured is required to pay at the time of service. It is usually required for basic doctor visits and when purchasing prescription medications.
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What is a HMO?
Health Maintenance Organizations or HMO's are managed care plans that provide care for enrollees by contracting with specific health care providers to provide specified benefits. Many HMO’s require enrollees to see a primary care physician (PCP) chosen by the member who will refer them to a specialist if deemed necessary. HMO plans often do not include deductibles, but co-pays are charged per office and any visit to a provider out of the HMO network is not covered and the patient is responsible for the total cost of the visit. HMO plans typically allow a member to have lower out-of-pocket healthcare costs, but require the member to forego some choice and flexibility with regard to selecting physicians and hospitals.
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What is a PPO?
A preferred provider organization or a PPO, is a health care organization composed of physicians, hospitals, or other providers which provides health care services at a reduced fee. PPOs may also offer more flexibility by allowing for visits to out-of-network professionals, but at a greater expense to the policy holder. Visits within the network require only the payment of a small fee. There is often a deductible for out-of-network expenses and a higher co-payment.
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What is a Health Savings Account (HSA)?
A Health Savings Account, or HAS, combines high deductible health insurance with a tax-favored savings account. Money in the savings account helps pay the deductible. Once the deductible is met, the insurance starts paying. Money left in the savings account earns interest and is yours to keep.
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What is a negotiated rate?
A negotiated rate is the amount participating providers (doctors, hospitals) agree to accept as payment in full for covered services. It is usually lower than their normal charge.
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What Is Key Person Insurance?
Key person insurance is generally a term life insurance policy, with the length term being the time until that employee retires. The company pays the premiums on the policy and receives the death benefits if the employee unexpectedly dies. If the employee retires, the company may choose to also surrender the insurance contract, giving the employee the chance to convert the policy to a permanent one. Key man insurance is meant to cover the company's losses in the event of the death of a key employee. That employee may be a particularly capable sales person, a manager, or the company owner, the underlying assumption is that the company will suffer greatly should that person pass away.
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What is a Business Owner’s Policy? (BOP)
A business owner’s policy (BOP) has been compared to a homeowner's policy for business. BOPs were first developed in the 1970s and have become a very popular form of insurance for small to medium sized businesses. BOPs combine some of the basic coverage needed by a typical small business into a standard package at a premium that is generally less than would be required to purchase these coverages separately. A BOP includes coverage for your property, income protection and liability needs.
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What is a Commercial Policy?
A Commercial policy is one that protects commercial property owners and landlords. These policies are designed to protect your property, income protection and liability needs.
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How do Bonds Work?
Bonds are a type of “guarantee” that business owners can purchase to back up their workmanship. Bonds give the clients of a business reassurance that they will receive sufficient services and if they do not, they will be repaid any money that they paid out. It's a three-party agreement where the third party (insurance company) guarantees to a second party (obligee or owner) the successful performance of the first party (business owner). Bonds are not a true form of insurance with the distinction that they must be paid back. A bond is not an insurance policy. An insurance policy assumes that there will be a loss, so the premium for an insurance policy is calculated to cover losses that will occur. A bond, on the other hand, is an extension of credit with the assumption that the legal obligation will be fulfilled, and consequently, there will be no loss. The bond premium paid to the surety covers only the underwriting expenses of the surety company. When losses occur, they have a significant impact on the surety company's financial results.
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