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Health Insurance

What are my health insurance choices?

There are essentially two types of health insurance plans: indemnity plans (fee-for services) or managed care plans. The differences include the choice of providers, out-of-pocket costs for covered services and how bills are paid. Some plans are better than others for your or your family's health care needs, but no one plan will pay for all the costs associated with your medical care.

AIM (Access for Infants and Mothers)
The AIM program covers pregnant women and their newborn children who do not qualify for Medi-Cal, but do not earn enough to pay for traditional insurance. AIM covers prenatal visits, hospital delivery, and health services to children up to their third birthday. The AIM program is run by Managed Risk Medical Insurance

Board (MRMIB)
CalWORKS (California Work Opportunities and Responsibility to Kids)
The CalWORKS program gives temporary financial aid, food stamps, and job search help to families with minor children. You must meet income and property guidelines to qualify. Most parents who receive financial aid are also required to participate in the CalWORKS job services program. If you do not participate you could lose some or all of your benefits.

Cal-COBRA
CalCOBRA is a California-specific program that does two things: (1) It extends the federal COBRA coverage to employees of California employers not covered by COBRA (employers with 2-19 employees); (2) It extends COBRA coverage for an additional 18 months (to a total of 36 months) for employees of companies that are covered by federal COBRA (employers with 20 or more employees).

COBRA (Consolidated Omnibus Budget Reconciliation Act)
Have you recently left your employer? COBRA allows former employees, retirees, and their dependents to temporarily keep their health coverage at group rates. It is more expensive than group insurance. Why? When you are employed, your employer usually pays some or all of the premium for your health insurance. COBRA participants pay the entire premium themselves. It may be less expensive than individual coverage, though. You can collect COBRA benefits for up to 18 months which may be extended to 36 months under certain circumstances.

If your employer has 20 or more employees they must follow COBRA rules. COBRA follows a "qualifying event," like a termination (other than for gross misconduct), layoff, or reduction in work hours. You have responsibilities to make sure your COBRA coverage goes into effect and stays in effect. You must decide to accept or reject COBRA during a certain time period (usually 60 days away notification from employer). Your former employer's plan administrator must mail you the COBRA information and forms within 14 days after receiving notification from your former employer of the qualifying event. If you do not ask for COBRA coverage before the deadline you may lose the right to COBRA coverage. You must also be sure to pay your monthly premiums or you can lose your coverage.
Once you have exhausted your COBRA benefits, you may be entitled to obtain an extension of coverage under CalCOBRA. When all COBRA/CalCOBRA extensions are exhausted, you can obtain individual health insurance under HIPAA.

Discount Health Plans
Discount health plans are not insurance. They are simply organizations that arrange discounts for medical services, often issuing a card to you for that purpose. Note that providers are *not* obligated to accept the discount plan, so not all providers participate. Be very careful when deciding to purchase a discount health plan.

EPO (Exclusive Provider Organization)
In an EPO you must use the providers who belong to the EPO or your expenses will not be covered. In other words, you cannot go "outside" the network for medical care.

ERISA (Employee Retirement Income Security Act)
The Employee Retirement Income Security Act is a Federal law that sets minimum standards for pension plans and self-insured health plans in private industry.

Evidence-Based Medicine
In evidence-based medicine, treatment success is measured by a careful study of the outcome, using both the clinical expertise of the provider, as well as the most up-to-date research available. EBM encourages the use of consistent, efficient, scientific guidelines for medical treatment decisions. EBM protocols may be especially useful in preventive care and management of chronic conditions such as asthma and diabetes.
FMLA (Family Medical Leave Act)

If your employer has 50 or more employees, you may be eligible for FMLA. The FMLA guarantees employees up to 12 workweeks of unpaid leave during any 12 month period for reasons like the birth of a child ("maternity leave"), taking care of sick immediate family members, or for your own serious health condition. In order to obtain FMLA leave, you must notify your employer 30 days in advance of taking the leave. If it is an emergency, you must notify your employer as soon as possible. You must also be an employee of your current employer for at least 12 months before taking FMLA leave.
While taking FMLA leave, your employer must continue the same group health insurance coverage for you as for similar other employees. If you already pay a premium, though, you must continue to pay it. Your employer can help you to make arrangements to do so.

Healthy Families
The Healthy Families program offers low-cost insurance for families who can't afford traditional insurance, but who also do not qualify for Medi-Cal. Healthy Families provides up to 12 months of insurance coverage as long as you pay the monthly premiums.

The insurance includes children and teenagers up to age 19, and even includes dental and vision plans. You're offered several plans to choose from depending on which county you live in.
Health Families is run by Managed Risk Medical Insurance Board (MRMIB).
HIPAA (Health Insurance Portability and Accountability Act)
HIPAA is a Federal law that does three things:

1) it makes it easier to take your health information with you when you change employers,
2) it sets very strict rules about the privacy of your medical records, and
3) it gives you the right to purchase individual health insurance after you've used up your COBRA benefits.
Before HIPAA it was often hard to move your medical information from one insurer to another, and there were few safeguards for your privacy. It was also very difficult to obtain insurance after COBRA benefits ran out. HIPAA improved these shortcomings.
If you have been covered by health insurance including COBRA and have exhausted all COBRA/CalCOBRA benefits with no break longer than 63 days, HIPAA gives you the right to buy individual health coverage with few or no limits on pre-existing conditions.

HMO (Health Maintenance Organization)
An HMO is a collection of hospitals, doctors, and other health services all organized under one network. By managing care and contracting with the providers, HMOs keep costs down while providing a full range of health services. You usually pay only small co-pays when using services, no matter how many or what kind of services you use. In return, though, you must usually use the hospital(s), doctors, and other health providers in the HMO's network. In an HMO, you select a primary care physician. If you need a specialist, the primary care physician must first refer you to that specialist before you can see them. HMOs in California are regulated by Department of Managed Health Care (DMHC).

HSA (Health Savings Account)
In an HSA, you contribute money to a special bank account to be used for medical bills. You get a Federal tax deduction on the money you contribute to your HSA, and if you use the money for medical expenses, you pay no Federal tax or penalty on it.

The HSA account can also earn Federal tax-free interest. Note: there is no California tax exemption for your HSA contribution, or for the interest the account earns.

HSA's always go along with a high-deductible health insurance plan such as a $1,500 deductible. This means that if you need medical treatment, you must first pay the deductible, which you can do with money from the HSA. There are limits on how much you can contribute each year. In 2006 you could have contributed up to $2,700 per year for yourself (with a $3,000 deductible plan), or $5,450 per year for yourself and your family (with a $6,000 deductible plan).

HSA's "roll-over," that is: money you saved doesn't disappear at the end of the year if you haven't used it. You simply continue contributing to the HSA. There is no limit to how much you can have saved in your HSA.
The HSA is also "portable," so you can move or change jobs and take the HSA with you. Some employers may also make contributions to your HSA for you as a job benefit.

Who is eligible for an HSA? Once on Medicare, you can not obtain a new HSA. If you already had one before joining Medicare, however, you can keep that HSA and use it, but you can not continue contributing to it. You can be eligible for an HSA even if you have already have a high-deductible health plan, but not if you already have traditional health insurance. You can also still be eligible if you have disease-specific insurance (like a plan to cover just your diabetes).

HSA money can be used for preventive medical services and drugs (both prescription and over-the-counter) without Federal tax or penalty. You can use money from your HSA for non-medical expenses, but you'll usually have to pay a tax and a penalty.

Medi-Cal
Medi-Cal is California's version of the Federal Medicaid system. It is paid for by joint Federal and State matching funds. This program generally covers low-income working families, children under 13, pregnant women and the aged, blind and disabled whose income does not exceed 100-200% of the federal poverty level.

Medi-Cal covers many medical procedures, office visits, and other health-related expenses. You do not pay for Medi-Cal. Instead, you receive it as a benefit if you qualify for it based on your income, assets, employment status, etc.

Medicare
A Federal program that mainly insures the elderly and disabled people. There are four parts to Medicare. Part A and B comprise the original fee-for-service Medicare plan. Part "A" covers hospitalization. Part "B" covers doctors' and other outpatient services. Part "C" also known as Medicare Advantage, is Medicare offered through a network of providers such as HMO (Health Maintenance Organization) or PPO (Preferred Provider Organization). Part "D" covers prescription drugs. You can also pay for private supplemental programs to give you more coverage than Medicare offers. Medi-gap policies exist for many health care services, but not prescription drugs.

Medi-gap Insurance
Supplemental insurance policies that you can purchase to pay for things that Medicare does not. The insurance "closes the gap" between what's paid for and what isn't.

MRMIP (Major Risk Medical Insurance Program)
Some people can't obtain health insurance at all, like people who suffer from serious, chronic disorders such as diabetes or cancer. If you can not obtain traditional health insurance, the State of California can help you through MRMIP.
This program gives you up to 36 months of medical coverage. You have a choice of several insurance companies depending upon which county you live in. Premiums depend on your age and which plan you choose. At the end of the 36 months, you are no longer eligible for MRMIP, but you are then offered guaranteed coverage through a traditional insurance company.

POS (Point of Service)
Plans that allow you to go outside your network are called POS plans. Charges for services outside your network can be much higher, though.

PPO (Preferred Provider Organization)
In a PPO, insurance companies contract with doctors, hospitals, and other providers to form a "network."
Depending upon your plan, you can sometimes get health care outside the network (someone or someplace not included in the network) but you will have to pay more. Unlike an HMO, you also have to pay a deductible and coinsurance.

Also unlike an HMO, you usually can see a specialist without first being referred by your primary care physician, and you have much more freedom in choosing a doctor or hospital. PPOs in California are regulated by both California Department of Insurance (CDI) and Department of Managed Health Care (DMHC).



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