Read Before Purchasing Health Insurance
Brought to by: USA Benefits Group
#1: Know your prospective provider.
The A.M. Best Company provides ratings of all insurance companies to help those looking for insurance better evaluate their options. In existence since 1899, A.M. Best is the most experienced insurance-rating company in the nation. Ranging on a scale of F to A++, the ratings are as follows:
#2: Make sure the company is clear about how much coverage they are providing.
There are only three parties that can determine how much an insurance company should pay on a claim:
1. The hospital or doctor.
2. The insurance company.
3. An independent 3rd party using gathered data.
The best insurance company to go with is usually one that pays for Usual and Customary Charges based on data from independent researchers. Be wary of companies that use wording such as reasonable charges, prevailing charges, average charges, permissible charges or regular charges. This language is purposely vague and allows the insurance company to pay whatever they see fit.
#3: Get a plan that does not limit who can treat you.
Be sure your plan covers multiple doctors and does not limit your treatment possibilities. Don’t get confused by tricky wording (i.e. “surgeons’ fees” as opposed to “surgeon’s fees”). Make sure your agent clarifies all verbiage before you sign anything.
#4: Make sure your plan covers ALL medically necessary procedures.
If you undergo a procedure that is not listed in your policy as being covered, then it will not be covered, even if it is deemed medically necessary by your doctors. The only exception to this rule is if your policy explicitly states “…and [it covers] all other medically necessary hospital expenses.” Be sure to check with your agent to include this coverage.
#5: Know how your provider covers pre-existing conditions.
Most health insurance companies require a waiting period of 24 months before any pre-existing conditions are covered. In some cases, the waiting period may be waived if you’ve satisfied waiting period requirements on a previous policy. Companies may charge more to cover pre-existing conditions or may exclude your pre-existing condition from coverage, so make sure you know a company’s policy before you sign with them.
#6: Buy a plan that cannot single you out for rate increases.
Rate increases are standard practice by all insurance companies to offset inflation or losses on claims. However, you should not purchase a plan that subjects you to rate increases based on your age or health status. Instead, make sure the company implements rate increases in a consistent manner to all policyholders at the same time.
#7: Purchase coverage to match the rising cost of medical care.
Make sure the dollar limits on your policy is sufficient enough to cover major individual or family illnesses. Do not buy a policy that is outdated and leaves you underinsured. Many companies now provide $1 million – $2 million in coverage for each injury or illness with a $3 million – $5 million lifetime maximum for the entire family.
- Quality of the company and plan should always trump price.
- Find out if you’re covered 24 hours a day, at work and at home.
- Make sure the plan is good at any recognized hospital in the world.
- Find out how long it takes the company to pay claims.
- Have your agent explain all exclusions and limitations in your policy.
- Protection from catastrophic loss
- Stabilization of cash expenses
- Offloading defense of claims
- Funding early settlement of claims to manage the size of a loss
- Give the underwriter a reason to write the account. Each underwriter has basic underwriting guidelines, but these guidelines do not, and cannot, address every situation that is likely to arise. Emphasize your organization’s good works, prevention and risk reduction programs, and professional operation. Give the underwriter a reason to fit your organization into the guidelines, and to make an exception for your organization if necessary.
- If you have a renewal quotation for an existing policy, say so. Give the underwriter a baseline from which to start. Let him/her match or beat the other quotation. Use the other quotation to negotiate more favorable terms.
- Build in time for an underwriting review. If you send the insurance application to the underwriter well in advance of the desired coverage date, the underwriter has a chance to review the submission and ask questions. The lead time also gives your organization a chance to understand the features of the insurance product, to solicit competing quotations, and to compare competing terms.
- Complete the application! Every question on an application form is important to the insurance company. An incomplete application will either be declined outright or sent back to your organization for completion. A quick glance will save a lot of time in the long run.
- Attach all supporting information. An insurer will consider its requested information to be important to accurate underwriting. List the enclosed items in your cover letter and ensure that each item is in the package prior to mailing.
- Provide accurate and truthful information, preferably in writing. False information may only be discovered by the insurer when you file a claim. By then, the insurer is generally within its rights to deny coverage, and your organization is deprived of the protection that it thought it had paid for.
- Anticipate questions and answer them up front. In consultation with your insurance agent, provide any necessary explanation for the answers on the application and unique exposures that your organization may have. In a single submission, give the underwriter sufficient information to evaluate the risk.
- Promptly respond to requests for information. A prompt response not only saves time, but it highlights your organization’s professionalism and willingness to cooperate.
- Negotiate quotation terms with respect. A clearly unacceptable quotation may result from an honest mistake, unreasonable underwriting guidelines, or a misunderstanding about the risks involved in your operations. While you should question the basis of the quotation and try to alter the terms, do so in a way that will not alienate the underwriter. Give him/her a chance to act reasonably.
Offer alternatives for unacceptable quotation terms. If an insurance quotation is unacceptable, offer suggestions that will improve the terms. For example, if the insurer refuses to cover an activity, offer to institute an insurer-approved risk management plan as a condition of coverage and to accept a higher deductible. Show your organization’s willingness to work with the insurer to find a win/win solution.
- What is the coinsurance limit? What is the total annual out-of-pocket cost for covered services?
- What happens if I go to a doctor or hospital that’s not on the “preferred” list?
- Are managed care discounts passed along directly to members?
- Can employees pick a plan design?
- Are customer service people available in the evenings or on weekends?
- Is the carrier’s utilization review program accredited?
- If I have a significant illness, will I get to talk to the same nurse every time I call the insurance company, or will I talk to someone who uses their computer to check what’s been done up to that point?
- Will I have to fill out claim forms?
- What is the carrier’s A.M. Best rating?
- What happens if I want to hire someone who has a recent history of significant illness or who is currently undergoing treatment?
- How much experience does the carrier have dealing with small businesses (fewer than 10 employees)?
- Do they handle other employee benefits that I need?