You now are the proud owner of a health insurance policy through your place of employment, but you have no clue what anything in it means. You start reviewing the policy and it gets more confusing as each word is read. This happens too often to a lot of people and it shouldn’t. Insurance policies for the most part are simple to understand if you know the language they speak. Now if you don’t that’s another story. Let’s get started and see if we can help you make sense of your new health insurance policy.
The first things you want to understand are the many terms that are in your policy. One of the common terms that you will see a lot and deal with a lot is a deductible. A deductible is what you would have to pay before any benefits in your health insurance policy would be accessible. Usually this is an annual amount and will vary greatly by the underwriters of the policy. Most of the time there are separate deductibles for an individual account and a family account. Some policies will let you use some of their services with out meeting the deductible. Once you meet your deductible then you’re done for that calendar year. The following year though you have to start all over again.
Co-insurance, or co-payments which they are sometimes called, are amounts that are paid by the insured before the insurance will pay and this is in addition to the deductibles. Some policies let you pay a co-payment for certain services without meeting the deductible.
Out of Pocket is what you will have to pay out of your own pocket. This could include your deductibles, co-insurance, and your co-payments. If you hear the term “annual out of pocket expense” this is the maximum out of your own pocket you would have to pay for the services minus the premiums, which are due no matter what.
Most every policy that you get especially health insurance policies have a lifetime maximum term. What this means that your policy basically has a cap on it. During the lifetime you can’t go over a predetermined amount or the health insurance won’t pay after the set amount. Now don’t get worried it’s usually a very high figure but with today’s rapid escalating health care costs you can reach it fairly quickly.
Exclusions will be one section that you must read very carefully and fully understand in your health insurance policy. Exclusions are things the policy will not cover and this can be a very gray area. The policy could cover operations but not after care or cover after care and not the operation. This is one of the most important sections of your policy so read it and reread it over a lot to make sure you grasp all of the contents and what it covers and what it doesn’t cover.
Pre-existing conditions is one of the things you will want to know about. Pre-existing basically means it was a condition you already have and been treated for which the policy will not cover it or pay for any work done for that pre-existing condition. Some health insurance policies will cover pre-existing where others won’t which is why knowing what is in your policy is very important.
Waiting period is usually the time you will have to wait for your health insurance policy to become effective. Most policies do have a waiting period and the benefits aren’t available until you have met the waiting period requirements. Different companies have different policies so check with your insurance company so you will know the rules for your policy.
Grace period is the amount of time that is given for one to pay their health insurance premium after the original due date has passed.
There are many things that you should always remember as you look over your health insurance policy. Read each and every paragraph and make sure you understand how the whole policy works so you will never be in the dark or have any questions about what is covered and what isn’t. Remember that it is okay to ask questions!
Workman’s Compensation: Who Pays for It
Workman’s compensation insurance, also known as “workman’s comp”, is a state-mandated insurance program designed to protect workers who have been injured on the job or rendered ill because of workplace conditions. All companies, with a few exceptions, are required to maintain this type of insurance coverage no matter where they are located – all 50 U.S. states require it. Although some details of workman’s compensation coverage may differ slightly from state to state, the basics are fairly uniform.
Workman’s compensation insurance typically consists of two parts: compensation for the worker and employer’s liability coverage. The first covers the injured worker’s medical bills, rehabilitation costs, lost wages and most other costs directly related to the injury, even if the injury was the employee’s fault. Employer’s liability, on the other hand, covers the employer’s legal costs should an employee bring suit against the business.
The location and size of the business will determine what sort of workman’s compensation policy an employer must carry. Most states allow employers to purchase their plans through a traditional insurance company. There are some states, however, that require the insurance be purchased exclusively through programs run by the state itself. North Dakota, Ohio, Washington, West Virginia and Wyoming all require the use of state-run workman’s compensation programs. Puerto Rico and the U.S. Virgin Islands require this type of plan as well. Not all states that provide a state-run plan, however, demand that the companies within their jurisdiction use it exclusively. Arizona, California, Colorado, Idaho, Maryland, Michigan, Minnesota, Montana, New York, Oklahoma, Oregon, Pennsylvania and Utah all sponsor workman’s compensation plans that compete with programs in the private sector.
In some U.S. states, a company that is big enough and reputable enough may create its own workman’s compensation fund, without having to go through either the state or a private insurance carrier. The states that allow this option are: Arizona, California, Colorado, Hawaii, Idaho, Kentucky, Louisiana, Maine, Maryland, Minnesota, Missouri, Montana, New Mexico, New York, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Texas and Utah. Any company that is self-insured in this manner, however, must be authorized by the state.
Cost to the Employer
No matter where the coverage comes from, workman’s compensation insurance is expensive for an employer. Indeed, American businesses pay over $100 billion in premiums each year. The coverage is wholly paid for by the employer, who is prohibited from passing any portion of the expense on to his or her employees.
The cost of workman’s compensation insurance is dependent upon many factors. One important factor has to do with the classification of employees. Some employees are more expensive to cover than others because their jobs are considered more hazardous. For example, it costs more to cover a roofer than it does to cover a secretary because the roofer’s job duties require more potentially risky behavior.
Two other important factors that determine the rise or fall of workman’s compensation premiums are: the existence and implementation of a company’s safety programs and its history of accident and injury. If an employer shows a concern for workplace safety and can prove that concern by keeping accidents down to a minimum, then the likelihood of a rise in premium rates is minimal.
Keeping Costs Down
There are many ways in which an employer can make sure that he or she is getting the lowest workman’s compensation premium rate possible. The easiest way is for the employer to make sure that all workers are classified correctly. The premium rate for each classification is different – depending on the risk associated with it – and even the slightest error in classification can cost an employer dearly. For example, keyboard use is considered a somewhat risky behavior because of the possibility of developing carpal tunnel syndrome. If an office worker who does not use a keyboard is mistakenly classified as one who does, then the employer could be paying an unnecessary premium.
Another method of keeping workman’s compensation premium costs down is for the employer to institute safety programs, seminars and workshops. Very few employees purposefully injure themselves in order to obtain benefits. Sometimes workplace injuries are simply the result of an unaware and uneducated workforce. So, if an employer’s concern for workplace safety is evident and ever-present (posters, signs, announcements, etc.), safety issues are more likely to remain on the minds of the employees and accidents are less likely to occur – fewer accidents man lower premiums. An employer’s overt preoccupation with safety also lets the insurance carrier know that he or she is doing everything possible to enforce employee safety. This often leads to lower premium rates as well.
Workman’s compensation insurance typically consists of two parts: compensation for the worker and employer’s liability coverage. The first covers the injured worker’s medical bills, rehabilitation costs, lost wages and most other costs directly related to the injury, even if the injury was the employee’s fault. Employer’s liability, on the other hand, covers the employer’s legal costs should an employee bring suit against the business.
The location and size of the business will determine what sort of workman’s compensation policy an employer must carry. Most states allow employers to purchase their plans through a traditional insurance company. There are some states, however, that require the insurance be purchased exclusively through programs run by the state itself. North Dakota, Ohio, Washington, West Virginia and Wyoming all require the use of state-run workman’s compensation programs. Puerto Rico and the U.S. Virgin Islands require this type of plan as well. Not all states that provide a state-run plan, however, demand that the companies within their jurisdiction use it exclusively. Arizona, California, Colorado, Idaho, Maryland, Michigan, Minnesota, Montana, New York, Oklahoma, Oregon, Pennsylvania and Utah all sponsor workman’s compensation plans that compete with programs in the private sector.
In some U.S. states, a company that is big enough and reputable enough may create its own workman’s compensation fund, without having to go through either the state or a private insurance carrier. The states that allow this option are: Arizona, California, Colorado, Hawaii, Idaho, Kentucky, Louisiana, Maine, Maryland, Minnesota, Missouri, Montana, New Mexico, New York, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Texas and Utah. Any company that is self-insured in this manner, however, must be authorized by the state.
Cost to the Employer
No matter where the coverage comes from, workman’s compensation insurance is expensive for an employer. Indeed, American businesses pay over $100 billion in premiums each year. The coverage is wholly paid for by the employer, who is prohibited from passing any portion of the expense on to his or her employees.
The cost of workman’s compensation insurance is dependent upon many factors. One important factor has to do with the classification of employees. Some employees are more expensive to cover than others because their jobs are considered more hazardous. For example, it costs more to cover a roofer than it does to cover a secretary because the roofer’s job duties require more potentially risky behavior.
Two other important factors that determine the rise or fall of workman’s compensation premiums are: the existence and implementation of a company’s safety programs and its history of accident and injury. If an employer shows a concern for workplace safety and can prove that concern by keeping accidents down to a minimum, then the likelihood of a rise in premium rates is minimal.
Keeping Costs Down
There are many ways in which an employer can make sure that he or she is getting the lowest workman’s compensation premium rate possible. The easiest way is for the employer to make sure that all workers are classified correctly. The premium rate for each classification is different – depending on the risk associated with it – and even the slightest error in classification can cost an employer dearly. For example, keyboard use is considered a somewhat risky behavior because of the possibility of developing carpal tunnel syndrome. If an office worker who does not use a keyboard is mistakenly classified as one who does, then the employer could be paying an unnecessary premium.
Another method of keeping workman’s compensation premium costs down is for the employer to institute safety programs, seminars and workshops. Very few employees purposefully injure themselves in order to obtain benefits. Sometimes workplace injuries are simply the result of an unaware and uneducated workforce. So, if an employer’s concern for workplace safety is evident and ever-present (posters, signs, announcements, etc.), safety issues are more likely to remain on the minds of the employees and accidents are less likely to occur – fewer accidents man lower premiums. An employer’s overt preoccupation with safety also lets the insurance carrier know that he or she is doing everything possible to enforce employee safety. This often leads to lower premium rates as well.
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