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4 important facts about health insurance compensation

What is a compensation health insurance plan?

A compensatory health insurance plan is a health care plan that allows you to choose the doctor, health care professional, hospital, or service provider of your choice and gives you the most flexibility and freedom in your health insurance plan.

Medical compensation plans are also known as:

  • The traditional compensation plan
  • Fee for service plan

The plan helps protect against the costs of medical expenses.

Benefits of compensation health insurance plans

A health compensation policy differs from policies offered by health maintenance organizations (HMOs) and preferred provider organizations (PPOs) because they allow you to obtain medical care when you choose to provide compensation for a specific portion of costs. . The main advantage of a health insurance reimbursement plan is that it does not force you to choose a primary care physician. Compensation health insurance plans are also unique in that they allow you to self-refer to specialists and do not require you to obtain a referral to receive compensation.

The kind of freedom that a compensatory health insurance plan offers can be valuable in directing your health care. This differs significantly from HMOs, IPAs, and PPOs that use managed care and may force you to choose a primary care provider as part of the plan.

Compensatory health insurance plans do not include a provider network.

Is The Health Insurance Indemnity Plan Right For You And Your Family?

Compensation health insurance plans have the most benefits if the following are important to you:

  • You don't want to stay with a primary care doctor. The health insurance plan does not force you to choose your primary care doctor, so this gives you freedom of choice.
  • Don't mind paying a little more for health insurance costs or deductible 
  • Don't worry about choosing providers whose costs are not screened. That is, since you are not part of a network in a reimbursement health insurance plan, the costs of the doctors and professionals you choose may exceed the definition of a usual, customary, and reasonable amount (UCR) .5 You will need to pay attention to how your choices affect your costs.
  • You live in a geographic area where access to the doctors and medical services you want will not be included in your HMO or PPO plan.

Health insurance plan costs, compensation, and deductions

Compensation insurance plans pay a portion of your medical costs with the provider of your choice, but may be subject to a deduction. The amount of the compensation plan deductible can range from $ 100 for individuals to up to $ 500 on average for families and varies by insurance company.

Once the deductible is paid, the plan will pay the rest of your health insurance costs up to the limits of your contract.

Compensation policies may also include copayment or coinsurance terms.

4 important keys to understanding a health insurance reimbursement plan

If you have the opportunity to choose a health insurance compensation policy, here are four important points to remember:

1. Usual, Usual, and Reasonable Fees and Compensation Plans (UCRs)

UCR rates are the amounts that medical providers in your area typically charge for services because compensation plans are self-managed health insurance plans and there is no network that determines the rates that select service providers will charge. As a result, you will want to know the costs that your plan identifies as UCR versus what your chosen provider will charge for services to avoid unexpected costs. In general, most providers meet the criteria, but it is important to be notified when using a self-administered plan, such as a health insurance reimbursement plan.

2. Understand deductions and copayments for health insurance compensation

The deductible is the amount you must pay before submitting the benefits of the policy. After deduction, you may have to make a copayment. The copayment is a percentage you pay on the remaining fees after your deduction. For example: if your qualification fee is $ 800 and you have a $ 200 deductible, then $ 600 remains. Suppose your combined amount is 20%. This means that you will still have to pay 20% of the remaining $ 600, which will be $ 120. Know the liability and coinsurance requirements of a compensation health insurance plan to make sure you can cover the costs.

Some compensation policies also offer a maximum amount that you must pay as coinsurance. These policies give you an advantage because once you reach your payment limit, you no longer have to pay coinsurance. 9 Depending on your medical situation, this can help you manage the maximum costs you can pay as part of your policy.

3. Health insurance plans do not restrict access based on geographic location

As explained in our definition of a health compensation plan above, in a compensation plan, you have the freedom to choose your doctor, specialist, or hospital with few restrictions, if any.

In some cases, the HMO and PPO may restrict your doctor, specialist, or hospital options by geographic restriction or the region in which the provider is located.10 This gives a great advantage to the freedom that a compensation scheme offers to many people .

4. Compensation plans and preventive health care services

Some compensatory health insurance plans may not cover preventive services, while others do. 11 Preventive health care services include annual screenings and other routine office visits designed to prevent illness. Before choosing a health plan, be sure to discuss how preventive services are secured and how much compensation you can expect. This will help you choose the best possible plan. In some cases, the costs for these services may not be calculated in the amount deducted from you.

Health insurance plans to offset HMO and PPO plans

Unlike HMO and PPO health insurance plans, most compensation policies allow you to choose which doctor, specialist, or hospital you want when seeking health care services.

Compensation plans are fee-for-service health insurance plans where you can freely choose your health care services, and as long as your services qualify, you may be charged based on how your policy rules are written. Compensation health insurance plans sometimes cost more than HMOs and PPOs, but the payoff is flexibility of options.

Contact professionals with compensatory health insurance plans

Being able to self-refer to a specialist can be a great asset in obtaining the best medical care and is easily one of the greatest benefits of compensatory health insurance plans.

How do you know what the health insurance plan covers for compensation?

A compensation policy brochure or employee benefits manual will explain the terms and conditions of what is covered and what is not. Read the policy or benefit booklet before you need health care services and ask your health insurance agent, insurance company or business owner to explain anything that is not clear.