Idea Go FDP 2014
Note this is a public service announcement (PSA) from TLG-RWME.
The question of supplemental insurance seems to be a heavy discussion topic these days with all the reforms we have seen in medical care in the United States. Do you understand the features, benefits, and costs surrounding the products and how they can help you?
There are implications in the business world in terms of providing these within your operation to help your employees minimize financial risk of medical bills. By offering various plans through pre-tax enrollments there are benefits to you and the employees when done correctly.
Supplemental insurance, typically refers to supplemental health insurance, these policies usually pay out cash directly to the person insured. Personally, I do not recommended that supplemental insurance be a replacement for a Major Medical Plan but rather, as the name implies a supplement to it.
Generally, supplemental insurance pays cash benefits to the policyholder whenever the insured is injured, hospitalized, visits a physician or has other related expenses covered under the policy. It is often known as “defined benefit insurance” because each policy specifies the exact amount that will be paid for each benefit and occurrence as defined in the policy. It does not tie any payments to your regular health insurance policy nor do they pay any funds directly to a provider.
It pays cash benefits even if the medical cost are primarily covered by other insurance. They may also pay out for pre-existing conditions after a waiting period so it is critical you understand the policy you are looking to purchase. The important part of this is that you as the policyholder determine how you spend those funds.
When considering a supplemental insurance policy it is a good idea to understand the premium structure and the relationship of out-of-pocket expenses you could possibly incur under your current health policy. If you face large co-pays or high deductibles, like many policies today, it may be an advantage to have an accident, sickness or hospitalization supplemental plan to help minimize the financial impact.
There are many companies offering this type of coverage in the market today so you really need to understand what you are buying and what you are paying for so you maximize the coverage for you and your family. For example, check to see if the policy has a wellness feature that will pay you for a regular checkup. Now, many of the new health policies have this as a no cost benefit under the standard ACA structure but the supplemental plan my pay you $50 for that visit which reduces the cost of your yearly premium.
One of the keys to supplemental insurance understanding the policy and remembering that you, the insured, drive the notification for claims. Unlike major medical, doctor’s offices or hospitals are under no obligation to notify the carrier of your visit or treatment. They will provide the necessary supporting documents but you must file the claim.
Another feature you need to examine is how fast they will pay your claim. In the market today, it will range from 1 – 10 days, or longer, depending on the carrier and the required documentation.
I also highly recommend you have a local agent who can help you file the claim if necessary and answer any questions you may have regarding coverage. Your experience with supplemental insurance can be excellent if you have good rapport with your agent and you understand the details of your policy.