Health And Disability Insurance
Health Insurance Plans
Health Insurance is a very important component of a company's benefit package. There are a number of different types of health insurance plans available in Corporate America and it can be somewhat confusing for transitioning military officers accustomed to the military's TRICARE system.
When you are evaluating a company's health insurance plan, there are three critical components that you should understand: the type of plan, premiums, and co-pays. The overall cost of different healthcare plans can vary widely, but understanding the following terms can be useful when wading through a company's healthcare insurance plan.
Types of Health Plans
There are two basic health insurance plans that exist today, Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs). Both offer positives and negatives. The plan that is best for you will depend on your individual situation and a careful cost/benefit analysis.
HMOs have a list of doctors to choose from within your network of approved physicians. HMOs allow you to visit an "Out of Network" provider, but at a higher cost. They may require that you to get a referral from your Primary Care Physician prior to seeing a specialist such as an Ear, Nose and Throat specialist or Dermatologist. Because your options are more limited, an HMO is normally less expensive than a PPO.
PPOs typically offer more flexibility by offering a large selection of approved doctors. They typically do not require you to get a referral from a Primary Care Physician before seeing a specialist. Because of your expanded options, a PPO is typically more expensive than an HMO.
A premium is a payment you incur monthly in order to participate in the health insurance plan. The cost of your monthly premium varies based on the type of plan (HMO or PPO) you select or use, the health insurance company that is selected, and the contribution of your employer. Typically, larger companies contribute more toward your premium, which reduces your monthly costs. There are very few companies remaining that pay 100% of an employee's medical premiums.
Co-Pays are the out of pocket expenses you incur for using your health insurance (prescriptions, doctors visits, emergency room visits, etc.). The amount of the co-pay depends on the health insurance plan that your company offers. For example, you may have a $25 co-pay on a $100 prescription. You incur an out-of-pocket expense of $25 and your insurance company pays the remaining $75.
In addition to Health Insurance, your employer will probably offer an additional plan for Dental and/or Vision coverage that you may elect to purchase for yourself and/or your dependents.
Most companies offer two types of relatively inexpensive disability insurance, Short Term Disability Insurance and Long Term Disability Insurance.
Short Term Disability Insurance
Short Term Disability Insurance supplements your income in case you are disabled and cannot work for an extended period of time, but typically less than one year.
Long Term Disability Insurance
Long Term Disability Insurance supplements your income in case you are disabled and cannot work for an extended period of time. This insurance will typically start after your short term insurance is exhausted or after you have been disabled for more than 180 days.
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