Health Insurance Guide

A Simple Guide to Health Insurance Terms

Deductible? Max Out-of-Pocket? Medicare-Covered services? Guaranteed Issue?

What do all these terms mean and how do they affect your coverage?

We all know what it’s like to discuss insurance options and quickly become confused over the endless terms. Here we have a simple guide to these words, their definition, and how they work in your policy.

Allowable Charge: This is the dollar amount allowable to be considered payment-in-full by an insurance company and an associated network of healthcare providers, or by Medicare, known as the Medicare Allowable. The Allowable Charge is typically a lower, contractually negotiated rate that the provider agrees to accept. If your doctor is Out-of-Network or does not accept Medicare Assignment as a contracted provider, you may be billed the full amount, or Actual Charge.

Coinsurance: The amount that you are obligated to pay for covered medical services after you’ve satisfied any copay or deductible required by your health insurance plan. Coinsurance is often assessed as a percentage of the allowable charge for a service rendered by a healthcare provider. For example, many health insurance plans require that you pay 20% of the allowable charge for Ambulatory Surgery procedures like a stint or a hernia repair.

Copay: A specific cost-sharing payment that your health insurance plan requires that you pay for a specific medical service, drugs, or supplies. You often will pay this prior to receiving the service. An example would be a $25 copay you pay as you check in for your appointment with your primary care doctor.

Covered Services: A health care service to which an insured person is entitled under the contract terms. This also includes any Medically Necessary service, drugs or supplies, and services outlined in the ACA Minimum Essential Coverage, including Preventive Services. Other types of coverage for healthcare services may be required as well, and are defined in legislation and required to be covered by federal and state laws.

Deductible: A specific dollar amount that your health insurance company may require that you pay out-of-pocket each year before your health insurance plan begins to pay claims for services. For example, if you have a $1216.00 deductible under Original Medicare and go to the Hospital, you will be billed for this amount first, then Medicare will come in and pay their agreed cost-sharing for the remainder of your visit.

Guaranteed Issue: Insurance coverage that must be issued regardless of health status. In Medicare, a supplement policy that is Guaranteed Issue must not only issue your policy, but is also required to provide coverage for pre-existing medical conditions, and they cannot charge you more for your policy because of past or present health problems.

Max-Out-of-Pocket (MOOP): An annual limit on all cost-sharing for which patients are responsible under a health insurance plan. This limit does not apply to premiums, balance-billed costs from out of network health care providers or non-covered services.

Minimum Essential Coverage: The type of coverage an individual needs to have to meet the individual responsibility requirement under the Affordable Care Act. This includes individual market policies, job-based coverage, Medicare, Medicaid, CHIP, TRICARE and certain other coverage. 

Open Enrollment Period: A time period during which eligible persons or eligible employees are required to review, change or choose their health insurance coverage.

Premium: The total amount paid to the insurance company for health insurance coverage. This is often paid on a monthly basis.

Underwriting: Each insurance company has its own set of underwriting guidelines to determine whether or not the company will accept the risk of insuring an applicant. The applicant’s health status, age, and occupation are also considered in Life, Health & Annuities Insurance. The insurer then calculates the monthly premium based on projections of the risk of insuring the applicant.

Affordable Care Act, ACA Insurance

The ACA may create a new and dynamic employee relationship.

A recent report from the Congressional Budget Office (CBO) details that the amount of labor supplied would fall by 2% from the effects of ACA.

Their analyses concluded that many employees would reduce their time, or even quit working entirely, if they didn’t rely on their employer-provided health insurance so heavily. This reduction in the amount of labor supplied naturally could mean an increase in the amount of money an employee is able to earn, as the cost for labor rises accordingly. This projected slight declination of workers will also provide an ease in the competition for jobs, and thus, employers need to provide their employees with a rich & competitive benefits package to avoid losing them to a more attractive offering.

If you’re tempted to stop offering coverage altogether, you must consider opting for a private exchange solution by giving employees the ability to choose the plans that suit their needs while taking a huge management burden off your shoulders. The employer will simply decide how much to contribute toward each employee’s benefits and then the employee can shop and choose between all of the plans offered in the healthcare marketplace.


If you are aging into Medicare, start reviewing your plans early to avoid delayed coverage!

People aging in to Medicare, turning 65, must review both their retirement and Medicare plans to know when to enroll and what coverage to choose.

Everyone’s retirement situation is unique. Even a husband & wife will need two separate plans to meet the needs of each individual’s situation. If you draw your Social Security income benefits before age 65, you’ll be automatically enrolled in Medicare Parts A and B and should receive your Medicare card three months before your 65th birthday.  Medicare will become effective on the 1st day of your birth month. You’ll have the option to refuse Part B, as it requires you to pay a monthly premium. You may consider this if you are receiving benefits from another health insurance policy. It is recommended that you discuss the benefits and compare your plans and options side by side with a professional, like your Marketplace Agency H.E.L.P Agent,before turning 65, even if you plan to continue to work.

If you haven’t started receiving your Social Security benefits by age 65, you will have an Initial Coverage Election Period (ICEP) to review your plans and options that will begin 3 months prior to your birth month. If you don’t elect coverage during this time, you may have to pay late penalties and risk coverage being delayed.

If you decide not to enroll in Medicare Parts B and D because you have coverage from your employer’s plan, the late enrollment penalties mentioned above won’t apply if the plans are determined to be “creditable coverage”. Generally, you will need to enroll in Medicare Part B within eight months of your retirement date, and you must enroll in a Medicare Part D plan no more than 63 days after your retirement date to avoid penalties.

This is a complex and difficult decision, with many factors involved. To make sure you’re choosing the right plan for your situation, our Marketplace Agency H.E.L.P Agents will review your current coverage and show you a number of options available to you as you near your Medicare and Retirement milestones.

Affordable Care Act, ACA Insurance

Obamacare, ACA, Healthcare Reform, the Affordable Care Act, whatever you want to call it…

The way we all get our health insurance is going to change.

Americans will all be required to obtain coverage that meets Essential Minimum Coverage standards, or pay a penalty. Beginning in 2014, the penalty for an individual is $95 or 1% of their household income, whichever is greater. By 2016 the penalty for an individual is $695 or 2.5% of their household income, whichever is greater. The penalties assessed for employers are a little more complex, and require calculations and specific analyses. Your Marketplace Agency H.E.L.P Agent will work with you in your unique situation to determine possible penalties you could face, as an individual or employer, and work with you to find the right solution.

If you’re already insured:

Insurance companies will have to update many of their health plans to include all of the protections from the health care law. If you already have coverage on your own, you may be able to keep your current plan. You may want to closely compare your current plan with your other options, as you could be paying too much, and you will have the opportunity to find a new plan that suits your needs. If you have coverage from your employer or group, you may find that your options are changing as well.

If you’re uninsured:

You can find a plan through your state exchanges with a Marketplace Agency H.E.L.P Agent. It is possible that you may also qualify for subsidies that can help pay for your coverage. We can qualify you and your family members for subsidies. There are three types of subsidy provided under ACA:

Medicaid/CHIP for those making less than 138% of the FPL (Federal Poverty Level).

Cost-sharing/out-of-pocket Reduction for those making up to 250% of the FPL.

Advanced Premium Credits for those making up to 400% of the FPL.

Make an appointment with a Marketplace Agency H.E.L.P Agent, or if you would prefer, shop here on your own. Remember, we are here to help if you have any questions along the way while comparing your plans and options, and applying for subsidy on your own. It’s great peace of mind to know that you have our experts always on your side.

If you’re an employer:

The employer mandate goes into effect in 2015. This requires all employers with 50+ full-time employees (including FTEs) to provide “Minimum Value” and “Affordable” coverage options for their covered associates. “Minimum Value” means that the plan is expected to cover at least 60% of a plan participant’s covered expenses. “Affordable” is defined as a plan when the employee’s contribution for single coverage with the lowest cost option available (that also provides Minimum Value) does not exceed 9.5% of the employee’s household income. Many companies have already made strategic decisions and either eliminated coverage entirely, eliminate spouse eligibility, or offered contributions for their employees and retirees to obtain their coverage on their own. There is a plan that is right for your business or group. A Marketplace Agency H.E.L.P Agent will provide you with the peace of mind you need to offer a competitive solution for your business, organization, or group benefits.