Additional Benefits of Health Insurance Plans

n   Insurers provide certain benefits. These benefits include the:

·           Carry-over provision

·           Lifetime maximum and benefit maximum

·           Three-tier benefit plan

Carry-over provision

n   Carry-over provision is an optional benefit that allows any amount paid toward OOP in the last quarter of the year to be applied toward OOP for the next plan year.

 Example of carry-over

Sam has a health insurance plan, which specifies that his OOP limit for a year is $1200. He has not availed any benefits under the health insurance plan for the first nine months. However, toward the end of the year, he falls ill and pays $200 that is part of his OOP.

The carry-over provision of health insurance plan ensures that next year when Sam renews his policy, the OOP limit will be reduced by $200.

Ø  New OOP limit for next year= OOP limit – Amount paid toward OOP in the last quarter of the previous policy year

Ø  Sam’s new OOP limit= $1200-$200 = $1000

 At UHG, the internet Benefit at a Glance (iBAAG) department validates if a member is eligible for the carry-over provision. 

Lifetime Maximum and Benefit Maximum

n   Benefit Maximum and Lifetime Maximum: Another benefit provided by insurers is benefit maximum and lifetime maximum. Benefit maximum is associated with the maximum benefit for a year and lifetime maximum for the entire life. Lifetime maximum is the limit on the total amount that an insurer pays to a member. A typical lifetime maximum is $1,000,000. However, some policies have an unlimited lifetime maximum.

n   Lifetime maximum can be applied as an overall limitation or to specific conditions. It can also be applied on an all cause or a per cause basis.

·           All cause maximum: The lifetime 'all cause' maximum covers all covered expenses during the entire period of coverage for all diagnosis.

·           Per cause maximum: The lifetime 'per cause' maximum applies to each covered service which is taken by the member. For example, a member who is receiving benefits under a per cause plan for the treatment of both diabetes and a heart condition avails a separate maximum benefit amount for each illness.

Three-tier benefit Plan

n   Three-tier benefit plan: Under the three-tier benefit plan, self-funded groups provide different benefits levels to their employees.

n   Three-tier benefit plan is designed for self-funded groups that are into the business of healthcare service, such as hospitals and skilled nursing facilities (SNF). These self-funded groups take help of insurance companies, which act like third party administrator (TPA) for self-funded groups. These TPA’s process all claims on behalf of the self-funded groups.

n   Benefits available at various tiers in three- tier benefit plan. 

·           Tier-one: Tier-one is applicable to employees who seek services in hospitals and medical facilities owned by their employers. This also includes employer groups’ affiliated physicians and related healthcare professionals. Tier-one provides the highest cost coverage. This means that if employees receive care at the employer’s facilities, the employer provides them the incentive of paying very less OOP expenses.

·           Tier-two: Tier-two is applicable to employees who seek medical services at a facility, which is not owned by the employer but is part of the TPA’s network. The member expenses for tier-two will be higher as compared to tier-one.

·           Tier-three: Tier-three is applicable to employees who seek medical services from facilities or professionals who are not part of the employer group or the TPA’s network. The member expense is highest in this tier.