Category Archives: Health Insurance

The Affordable Care Act – What is “Cost Sharing”?

Affordable_Care_Act_100413With the implementation of the Affordable Care Act, which took effect on 1/1/14, we now hear the constant mention of the term “cost sharing”. Many consumers of the new health insurance plans are unsure of what the term means and what payments actually constitute “cost sharing.”
Cost sharing is the payment any consumer contributes toward their health care based on the policy they’ve selected. These cost sharing payments include, but aren’t limited to:

• Deductibles
• Co-insurance
• Prescription deductible or co-insurance charge
• Primary care doctors or specialists co- payment

Regardless of which plan you select, these costs will be referred to as your “out of pocket maximum” per contract year.

When selecting a plan it is important to understand that cost sharing determines the premium for that particular plan. The higher your cost sharing, or put simply, the more you are willing to pay for your share of medical costs, the lower your monthly premium will be. Similarly, if you need to select a plan with lower cost sharing, where you are paying less of the costs, then, undoubtedly, your monthly premiums will be higher because the carrier will be shouldering more of the burden for payments to doctors, hospitals, pharmacies, etc.

It is also important to keep in mind that a deductible is a fixed amount that must be satisfied by you, the insured, before the insurance company will consider paying their portion of any covered health claim. Once the deductible is satisfied, you as the insured are still responsible for the specified percentage of co-insurance and any co-payments outlined in your chosen plan.

Once you have satisfied your portion of the cost sharing, your insurance company will cover 100% of the covered claims for any given contract year. When your contract year is over and it is time to renew your plan, then cost sharing starts all over again.

If you are confused, or have any questions at all, please contact your independent insurance agent for guidance. They will be able to help you choose a plan that most suits your needs and your budget.

– Narima Prashad

Can my employee apply for group health coverage that I offer at any time during their employment?

health-care-coverage-300x169Q: Can my employee apply for group health coverage that I offer at any time during their employment?

A: No. New hires have to fulfill a “lag-time” or waiting period that is predetermined in your contract with the insurance company. Once that waiting period is met your employee can apply within 30 days of the effective date for coverage.
If your employee fails to apply for coverage at this time they will have to wait until the group’s anniversary date, also known as, open enrollment, to apply.
However, your employee may be eligible to apply for coverage prior to open enrollment with a “qualifying event.”
A qualifying event can be:
• Loss of coverage from prior insurance
• Death
• Divorce
• Marriage