Even the most responsible people sometimes encounter circumstances that make it difficult to obtain insurance in the standard market. Perhaps you have been late for work a few times and been unlucky enough to receive speeding tickets. Maybe you have recently moved out on your own, and you have never had an automobile insurance policy in your name before. Any of these circumstances can put you in the situation of having to seek high-risk automobile coverage.

If you are considered a high-risk driver, you may have difficulty obtaining insurance from a standard agent. However, this does not mean you will have to drive uninsured or apply to your state's assigned risk pool. You may be able to obtain automobile insurance through a specialty company that insures high-risk drivers or through an affiliate company of a standard insurer. This chapter will give you tips on how to obtain insurance at minimal cost if you are designated as a high-risk driver.


WHAT IS A HIGH-RISK DRIVER?
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A high-risk driver is a person who has incurred too many violations or had too many automobile accidents to obtain insurance in the standard market. It also includes drivers who have never carried automobile insurance or who have let their automobile insurance lapse or expire without obtaining replacement insurance.
Each insurance company has different criteria that determines who is a high-risk driver. Some companies may consider drivers who have
more than a certain number of moving violations, or more than a certain number of rating points for violations to be high-risk drivers. 
Companies may also place a limit on the number of motor vehicle accidents a driver can have before being placed in a high-risk status.
You may also be high-risk if you have not purchased or maintained your automobile insurance. This often poses a problem for young drivers who have just moved out on their own and who have never purchased an insurance policy before.
Some insurers may place you in the high-risk category based on your
credit score. Each state's laws differ with respect to how insurance
companies may use credit to determine if you are an acceptable risk,
what programs you are eligible for, and how much you will be
charged. Still, numerous states allow insurers to place you in a highrisk program or decline to write your policy if you do not meet a
certain minimum credit score or if you have a serious negative event
such as a bankruptcy or charge-off on your credit report.
Being designated as a high-risk driver does not mean you will always
be paying top dollar for your automobile insurance. Once you build a
history with an insurance company and your driving record or credit
score improves, you may be able to obtain a standard policy with
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lower premiums. Some companies with both high-risk and standard
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 automobile insurance programs may be able to move you into a
standard program at renewal.
HOW CAN A HIGH-RISK DRIVER OBTAIN AUTOMOBILE
INSURANCE?
If you are a high-risk driver, there are a number of ways you can still
shop for competitive rates on your automobile insurance and find a
policy that fits your needs. Here are some of the ways you can easily
find an automobile insurance company to insure you at a price you
can afford:
• Ask your agent about a high-risk program. Many standard
automobile insurance companies offer high-risk programs to
insure people not eligible for standard auto insurance programs.
After you have been insured through a company's high-risk
program for a few policy terms, your agent may be able to help
you move to a standard program.
• Search for companies on the Internet to meet your high-risk
insurance needs. You can search Google, MSN, or Yahoo! for
terms such as high-risk insurance, nonstandard auto insurance,
and minimum-limit car insurance to find a variety of companies
that insure high-risk drivers in your state. Many of these
companies will allow you to obtain coverage quotes online, and a
few will let you purchase your policy online and download a
certificate of insurance to print and put in your car.
• Contact a direct auto insurance writer. There are several
specialty companies that advertise heavily on television and

radio stations, seeking drivers with less than perfect driving
records or credit scores. These companies offer a toll-free
number you can call to speak with a licensed insurance agent
sometimes, these companies staff agents 24 hours a day, so no
matter when you call, you can obtain insurance over the phone
in less than ten minutes.
WHAT DO HIGH-RISK POLICIES PROVIDE?
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In years past, high-risk automobile insurance was associated with
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 barebones coverage. Policyholders were limited to only the minimum
coverages and limits required by state law. The high-risk market was
one that few insurers wanted to pursue, so they provided
policyholders with little in the way of coverage and personal service.
Recently, more companies have begun to see the high-risk market as
a profitable opportunity to insure people who may otherwise be forced
to obtain insurance through an assigned risk pool or drive uninsured.
Doing so helps these companies expand their books of business,
while providing a valuable service to the driving public.
Today, high-risk automobile insurance policies provide at least the
minimum coverages and limits mandated by your state's insurance
laws, but they may also offer higher limits on these coverages so that
you can purchase additional protection for you and your family.
These policies may also provide comprehensive and collision
coverages to pay for damage or loss to your vehicle in the event of an
accident, theft, vandalism, or other loss. They may offer high
deductibles to help keep your premium costs for these coverages
down. Some high-risk insurance companies will not allow you to

select comprehensive and collision coverages with a $0 deductible.
This also helps reduce the cost of your premiums, because the
company will not have to spend a great deal of money adjusting and
settling small claims these costs are passed on to each policyholder
in the form of higher rates.
In addition to these coverages, high-risk policies may also offer a
variety of optional coverages, such as medical payments, towing and
rental coverage, or coverage for optional equipment on your vehicle,
such as chrome rims, custom stereo equipment, and aftermarket
detailing.
As the high-risk market has become more competitive, the array of
coverages and services offered by insurers in this market is
beginning to become indistinguishable from those offered under
standard policies.
IS HIGH-PISKAUTOMOBILE INSURANCE EXPENSIVE?
High-risk automobile insurance policies often carry higher premiums
than comparable standard policies. After all, your insurance company
is assuming risks that carry a much higher probability of loss than in
the standard market. The company has to charge rates that are high
enough to cover its anticipated claims as well as administrative,
marketing, and payroll expenses.
You may find, though, that high-risk insurers offer a variety of
discounts, sometimes more than those offered by standard
companies, which you can use to lower your premiums. For example,
claims-free renewal discounts are common among high-risk insurers.

Vehicle-related discounts, such as those for air bags, anti-lock
brakes, and passive restraints, are also common.
Even if the premiums per policy term are higher than for a
comparable standard automobile insurance policy, most high-risk
insurers allow policyholders to pay premiums in monthly installment
payments. Although you may incur fees for each payment, a monthly
payment plan can be a good way to obtain automobile insurance if
you are unable to pay for an entire policy term up front.
Let’s check it out on the next page…     

WHAT IF I NEED AN SR 22?
Many states require drivers to carry an SR-22 for a certain number of
years if they have been convicted of certain moving traffic violations
or if they have been caught driving without mandatory insurance. An
SR-22 is a certificate transmitted from your insurance company to
your state's Department of Motor Vehicles or Department of
Transportation. This certificate attests that you carry at least the
minimum coverages and limits required by your state's insurance
laws.
Depending on your state's laws, you may have to carry an SR-22 for
three to five years. If you let your insurance coverage lapse or cancel,
your insurance company is required to notify the Department of Motor
Vehicles or the Department of Transportation that your SR-22 is no
longer valid. If this happens, you will be asked to provide a new SR-
22 from another insurance company, or your driver's license and
vehicle registration may be suspended.
High-risk automobile insurance companies provide SR-22s for many
drivers. When you contact an agent or fill out an online quote form, be

sure to note that you need an SR-22. After you begin your policy,
your insurance company will file the SR-22 with the appropriate state
office. You may be charged a fee for this filing; however, you will have
to pay this fee only once, unless you let your policy lapse and your
insurance company has to file another SR-22 when you reinstate
your policy.
No one wants to be considered a high-risk driver. If this has
happened to you, though, you can rest easy knowing there are many
insurance companies today that are willing to offer you quality
coverages at competitive prices.

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medicare & medicaid coverage

      

This chapter will describe two federally sponsored healthcare programs in the United States: Medicare and Medicaid. You will learn the eligibility requirements for each type of coverage, as well as the types of care that are covered and the limitations of each program.
Understanding Medicare and Medicaid is essential if you are considering either type of coverage as an alternative to standard healthcare insurance.
Many people do not understand Medicare or Medicaid and assume that one of these health coverage plans will automatically cover their healthcare expenses in the event of an illness or an accident.
However, this is often not the case. Each plan has strict eligibility requirements, so they do not automatically cover healthcare costs you are unable to pay.
MEDICARE
Medicare is a federally sponsored health coverage program that is available to most senior citizens in the United States and people living in the United States who have permanent total disabilities.
Certain parts of this coverage are provided at no cost to eligible people.

Eligibility
To qualify for Medicare coverage, one of the following must apply to you:
• You are over the age of 65.
• You are under the age of 65 but are permanently disabled and have been receiving Social Security disability benefits for at least two years.
• You are in need of a kidney transplant or are undergoing continuing kidney dialysis.
• You have been diagnosed with Amyotrophic Lateral Sclerosis (ALS or Lou Gehrig's Disease).
In addition, you must be a United States citizen or have been a legal resident of the United States for at least five years.
Coverages
The schedule of coverages available under Medicare is divided into four parts. The coverages under each part are as follows:
Part A - Hospital Insurance
Part A of Medicare coverage provides inpatient hospital benefits with a $992 deductible per benefit period. For the purpose of this coverage part, a benefit period is defined as beginning the day the
patient is admitted to the hospital and ending 60 days after the patient is discharged or otherwise leaves the hospital.
Medicare Part A provides coverage for a hospital stay of up to 150 days per benefit period. The patient is responsible for coinsurance requirements for hospital stays of 61 days or more:
• For days 61 to 90, the patient is responsible for a coinsurance payment of $248 per day.
• For days 91 to 150, the patient is responsible for a coinsurance payment of $496 per day.
Medicare Part A also pays for treatment received at a skilled nursing facility. There are no deductible requirements, but the patient is required to pay a $124 per day coinsurance requirement for any skilled nursing care after 20 days. Medicare does not provide any benefits for skilled nursing care after 100 days.
Hospice care is also covered under Medicare Part A. There is a copayment of $5 for outpatient drugs and a 5 percent coinsurance requirement for respite care services.
There is no coverage available for home healthcare under Part A.
Part B - Medical Insurance

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Part B of Medicare coverage is designed to pay for home healthcare,
  

 doctor's office visits, and outpatient hospital services that are not covered by Part A.

It also pays for laboratory tests, such as blood work and X-rays; preventative screenings, such as flu shots, mammograms, bone mass measurements, cardiovascular screenings, prostate cancer tests, and diabetes screenings.
Ambulance services, mental healthcare, and outpatient therapy are also covered under Medicare Part B. This coverage will cover one physical exam administered within six months of the date the patient enrolls in Part B.
Part B is considered an enhanced coverage part; thus, it is not
provided on a no-cost basis. In 2007, the monthly premium for Part B coverage is $93.50 for most Americans who meet the eligibility requirements. Premiums are significantly higher for individuals with gross incomes higher than $80,000 and married couples with gross incomes of $160,000 or more. For these higher-income individuals,
Medicare Part B premiums are based on modified adjusted gross income and can range between $106 and $161.40 per month.
Medicare Part B coverage is subject to an annual deductible of $131.
Most services covered under this part are also subject to a 20 percent coinsurance requirement. If a doctor does not accept the Medicare Part B assignment, you may subject to an additional co-payment amount up to 15 percent of the medical costs incurred. Acceptance of an assignment means the physician has agreed to accept Medicare's predetermined fee as payment in full for services provided.
Part C - Medicare Advantage

Part C offers coverages available under Parts A and B under private health insurance plans and may also offer prescription coverage available under Part D. Part C does not offer any additional healthcare benefits above those offered through the other coverage parts.
Part D - Prescription Coverage

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In 2006, Medicare Part D was added to cover the costs of prescription drugs. There is an additional premium of $27.35 for this coverage part, which is offered through Medicare approved private health insurance plans. The list of formulary drugs covered varies among the plans, as do deductibles and co-payment requirements.
  

 Medicare coverage pays benefits for medical care and services administered only within the United States.
There are a number of costs and services that are not covered by Medicare. For example, Medicare does not cover long-term care administered in the home or in a nursing care facility. It also does not cover the costs of eye exams, corrective lenses, dental care, or hearing aids.
Enrolling in Medicare
If you are already receiving Social Security benefits when you turn 65 years of age, you will automatically be enrolled in Medicare parts A and B. You may choose to decline Part B, but if you choose to enroll in this coverage part later, you may incur a late enrollment fee. You will not automatically be enrolled in Medicare Parts C or D you will
need to enroll in these coverage parts through a Medicare-approved private health insurance plan.
If you are not already receiving Social Security benefits when you turn 65, you will need to enroll in Medicare you will not automatically be enrolled on your 65th birthday. You can apply for Medicare Parts A and B at any Social security office during your initial enrollment period, which begins three months before you turn 65 and ends three months after your 65th birthday.
If you do not enroll in Medicare Parts A and B during your initial enrollment period, you may apply during a yearly enrollment period, which runs from January 1 through March 31 of each year. Your coverage will begin on July 1 of the year in which you enrolled in these coverage parts. If you do not apply for these Medicare coverage parts during your initial enrollment period, you will incur a penalty for each year after you turned 65 in which you did not enroll the penalty will be added to your Part B premiums.
If you are applying for Medicare benefits because of a total permanent disability, you need to visit your local Social Security office for an application.
MEDICAID

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Medicaid is a no-cost health insurance plan for individuals who are below certain income
  

 levels and who have a permanent disability or otherwise meet one of the eligibility groups designated by the state government. Your assets will also be considered when determining whether you are eligible for Medicaid coverage.
Because Medicaid is a state-sponsored plan, the maximum income levels and eligibility groups vary by state. You can visit your state's Social Security Administration office to learn about the eligibility requirements for people in your state.
Medicaid coverage has three primary components:
• Health insurance coverage for low-income individuals and people with certain disabilities.
• Long-term care for elderly people and individuals with disabilities.
• Supplemental health coverage for individuals enrolled in Medicare, to pay for healthcare expenses not covered under Medicare.
Because of the restrictive nature of Medicaid plans, most people treat Medicaid as a last resort. Only people who are unable to afford any type of health insurance through the primary market and those people who are uninsurable should consider coverage under this plan.
Both the Medicare and Medicaid plans have restrictive eligibility requirements and offer limited coverages. If you qualify for either of these plans and do not feel additional health insurance coverage is necessary, you may wish to pursue coverage under Medicare or Medicaid.
For most working people, though, these plans are not feasible, because they are either unavailable or do not provide sufficient benefits to meet a working family's needs. If either of these plans
were available on the open market, it is unlikely many people would enroll

managed care plans

Many health insurance policies available in the United States today are based on managed care plans. In a managed care plan, the health insurer controls several aspects of your healthcare that you may not be aware of  when obtaining healthcare services.
For example, a health insurer offering coverage under a managed care plan has already negotiated rates for services with certain medical professionals. It will pay healthcare providers less than you would pay out of pocket for the same services if you visited the healthcare professional with no insurance.
Managed care plans allow health insurance companies to control the costs associated with claims, billing, and other administrative services. This, in turn, helps keep your premiums as low as possible.
This chapter will describe the major types of managed care plans and distinguish the differences among each one.
HEALTH MAINTENANCE ORGANIZATIONS (HMOS)

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In the 1970s, United States federal law passed legislation that required all companies with ...
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 more than 25 employees to offer an HMO alternative if another type of health insurance plan was offered.
An HMO is an insurance entity that establishes contracts with hospitals, doctors, specialists, and other medical professionals and organizations to obtain healthcare services for its subscribers at a fixed cost per member. This helps control healthcare costs and can be beneficial to healthcare professionals who contract with an HMO, because they are able to establish a captive client base through the HMO.
HMOs focus on reducing the costs of healthcare in several ways:
• They establish measures to reduce the number of unnecessary hospital admissions among subscribers.
• They emphasize preventative care, including diagnostic screenings and routine medical exams, as a means of minimizing the financial effects of serious illness or disease.
• They focus on medical care that will help minimize the number of days a member spends in the hospital.
• They implement measures to reduce administrative costs associated with providing healthcare benefits to their members.
An HMO operates under one of three models to achieve its objective of providing healthcare benefits at minimal cost:
GROUP PRACTICE MODEL
A group practice model resembles a clinic operation, because under this model, a group of specialists and physicians practice healthcare in a single medical facility. The facility may choose to provide medical services only to HMO members, or it may provide services to patients who are not HMO members at a higher cost. If the facility provides healthcare services only to HMO members, then the physicians and specialists are salaried employees of the HMO.
Under the group practice model, you can receive healthcare without having to go outside the facility, unless hospitalization is required.
Referrals are made internally, allowing you access to various specialists in the same facility. If a particular specialist is not available within the group practice, the HMO may establish a special contract with an outside specialist to provide medical services. The HMO also establishes contracts with hospitals to provide healthcare services not available within the facility, in the event hospitalization is required.
STAFF MODEL

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The staff model HMO system differs from the group practice model in  that the HMO owns
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 and operates the medical care facility. It may build the facility, staff it with physicians and specialists, and manage its dayto-day operations. The doctors and specialists working in the facility are employees of the HMO.
Like the group practice model, an HMO establishing a medical care facility under the staff model may choose to provide services only to its plan members.
INDEPENDENT PRACTICE ASSOCIATION MODEL
Physicians and specialists who contract with an HMO under the independent practice association model are not employees of the HMO, nor do they work in a facility owned or operated by the HMO.
Instead, physicians and specialists under this model may work in their own practices or may be employed by a hospital or other facility.
Under this model, subscribers receive a list of approved physicians
operating within a geographic area, including physicians practicing within a wide variety of specialty disciplines. As a member under this model, you would choose a doctor as your primary care physician and visit the doctor for treatment. If the primary care physician is unable to treat you, then he or she would refer you to a specialist within the independent practice association. These specialists may be employed by hospitals or other medical facilities that have contracted with the HMO.
The independent association model is the most common form of HMO and the form that insures most people who subscribe through an employersponsored group health insurance plan.
ADVANTAGES AND DISADVANTAGES OF HMO 

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Like any type of insurance plan, there are several advantages and disadvantages of selecting an HMO for your health insurance needs.
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Before selecting an HMO, take the time to consider how important these factors are to you.
Advantages
• Copayments are low for healthcare services and prescriptions.
There is often no co-payment requirement for prescription drugs, and copayments for office visits are $10 or less. Compared to other types of plans, this advantage can save you a significant
amount of money if you have to visit your primary care physician or a specialist.
• Premium costs can be lower for coverage through an HMO plan than for other types of plans, because HMOs take aggressive steps to control claims and administrative costs.
• You will have access to a number of preventative care resources.
HMOs place a significant emphasis on preventative care as a means of keeping subscribers healthy and reducing claims costs. Whether you are interested in quitting smoking or losing weight, concerned about a disease or condition that runs in your family, or want to receive checkups to maintain your health,
HMOs will provide benefits for these services.
• You can be reasonably certain you will not lose your coverage under an HMO. An HMO is prohibited by law from terminating your coverage for any reason other than fraud or material misrepresentation, nonpayment of premiums or copayments, failure to continue to meet eligibility requirements, termination of the group contract under which you obtained coverage, or your violation of your contract terms.
Disadvantages
• You will always have to consult your primary care physician when seeking care for a medical condition and will have to rely on your primary care physician to refer you to an appropriate specialist inthe HMO network.
• HMOs do not provide coverage for healthcare services performed outside your designated geographic service area, except for emergency services.
• In some cases, an HMO's focus on cutting costs may compromise the quality of care you receive. In recent years,
HMOs have used administrators, rather than physicians, to make decisions regarding the delivery of care within the HMO. Also,
HMOs have been criticized for providing bonuses and incentives to doctors for conserving medical resources.
PREFERRED PROVIDER ORGANIZATIONS (PPOS)

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In contrast to HMOs, PPOs do not use primary care physicians as gatekeepers to control the healthcare received by members. Instead,
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PPOs manage costs by increasing the level of benefits available to
members when they choose to use the services of a physician, specialist, or hospital within the PPO's network.
For example, if you needed to see a gastroenterologist, your PPO plan may require a $75 co-payment if you receive care from a gastroenterologist outside the PPO's preferred provider network but may require only a $20 co-payment if you use a gastroenterologist within the network.
This financial incentive is a PPO's primary means of cutting costs. A PPO does not require you to use doctors and facilities within the network, and it does not require you to obtain a referral from your primary care physician before visiting a specialist outside the network.

PPO plans involve a yearly deductible that must be met before payment for healthcare services will begin and a coinsurance requirement after your deductible is met. Your deductible is a flat dollar amount, such as $500 or $1,000, which you must pay out of pocket each year. Your coinsurance requirement is expressed as a percentage of the healthcare costs you incur after your deductible has been met.
You may have several deductible and coinsurance choices available through your PPO plan. If you and your family will use the PPO network often, it may be cost effective to select a high deductible, such as $1,000, and a low coinsurance requirement, such as 10 percent, so that your PPO plan will pay 90 percent of your healthcare costs after you meet your deductible. If you are not sure how much you will use your PPO's network, it may be more cost efficient to select a lower deductible, such as $250, and a higher coinsurance requirement, such as 30 percent, so you have a better chance of getting some use out of your PPO plan.
advantages and disadvantages of ppos
Advantages

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• There is no need to consult a primary care physician for a referral to a specialist. PPOs do not use primary care physicians as gatekeepers to manage costs.
• You are not restricted to doctors, specialists, and hospitals within a network or geographic service area. You are free to choose any medical professional or facility with which you feel comfortable.

• If you have already established a relationship with a physician or specialist, a PPO plan will allow you to continue receiving healthcare services from that medical professional.
Disadvantages
• PPOs can be significantly more expensive than HMOs. In addition to copayments, you may also be required to pay yearly deductible and a coinsurance requirement for healthcare costs that exceed your yearly deductible.
• Benefits for preventative care may not be as readily available as they are through an HMO. You may have to pay for smoking cessation classes or weight-loss training on your own if you are a member of a PPO.
• If you do not exceed your yearly deductible, you will not receive any type of benefit from your PPO plan, because your benefits will not begin until after you have paid your yearly deductible.
Choosing between an HMO plan and a PPO plan can be difficult,
especially if you are not able to reasonably anticipate your healthcare needs. If you do not mind being restricted to certain doctors and certain geographic areas, an HMO may adequately meet your needs.
If you are willing to pay more for your coverage in the form of deductibles and copayments to have the freedom to visit healthcare professionals outside a network, a PPO may be right for you.

selecting an employersponsored health insurance plan

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If you work for an business with at least 25 employees, your
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 employer may sponsor a group health insurance plan. An employer purchases a master policy from a health insurance company, and employees who enroll in the plan are supplied with certificates of insurance as proof of health insurance coverage.
Group health insurance plans offer several advantages over insurance plans available to individuals:
• Your employer may subsidize a portion of the insurance premiums. Few employees are fortunate enough to work for a company that pays for 100 percent of its employees' health insurance premiums, but many employers pay for a portion of employees' insurance as a benefit of working for that employer.
This can help make group health insurance coverage more affordable than individual health insurance plans not sponsored by an employer.
• Premiums for group health insurance plans are determined by experience rating. The health insurance company issuing the master policy to the employer takes into account the claims made by all of the subscribing employees and establishes
premiums in anticipation of the number and dollar amount of claims the health insurer anticipates for the next plan year.
Experience rating offers a significant potential for cost savings over individual health insurance plans, which base rates on community rating a formula that takes into account the average costs for various healthcare services charged by various providers in a geographic area.

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• You can obtain coverage through a group health insurance plan without a physical exam. When you begin employment with a company that offers a group health plan, you will have the opportunity to enroll in the plan simply by electing to do so within
the time specified by your employer.
• If you have been insured under a group health plan immediately before beginning a new job, your new employer's group health plan may have a shorter waiting period for coverage for preexisting conditions or may not be permitted to impose a waiting period for pre-existing conditions. This offers a significant advantage over individual health insurance plans, which are not obligated to cover pre-existing conditions without a significant waiting period.
• You will often obtain better coverage though a group insurance plan than through an individual insurance plan. Because the health insurer providing a master policy to an employer has the benefit of experience rating, an employer can often afford to offer
coverages through the insurer's policy that would be cost prohibitive under an individual policy.

• Because your employer wants to continue to provide health insurance to employees at the lowest premium possible, it may actively seek to reduce claims costs to maintain the best possible coverage at the lowest cost. Employers often institute wellness programs to help employees live healthier life styles and may be willing to pay for some on-site preventative care, such as flu shots and smoking cessation programs.
• Your group health insurance premiums can be paid on a pre-tax basis. Your employer can deduct your portion of the premium payments from your paycheck before any taxes are applied to your gross income. This can save you several hundred dollars a year over purchasing a healthcare policy on a post-tax basis.
The main drawback of choosing to obtain group health insurance through your employer is the lack of choice of your coverages or premiums. Health insurers providing group health coverage to a company's employees may revise premiums, coverages, deductibles, or entire plans each year, and you may have little say about how these changes affect you. Still, many Americans find the cost savings obtained by choosing a group health plan far outweighs the lack of choice in coverages or premiums.
TYPES OF EMPLOYER HEALTH PLANS

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Primary group health insurance plans offered by employers fall into one of two categories: PPOs and HMOs. These plans were discussed in detail in Chapter 24.
Another plan that may be available through your employer is a cafeteria plan. Cafeteria plans allow you to pick and choose from a
variety of medical services and pay for these services on a pre-tax basis. The money you contribute can be paid toward medical, wellness, and other expenses, such as:
• Premiums for group health insurance policies.
• Deductibles, copayments, coinsurance requirements, and other medical expenses not paid for by your primary health insurance policy.
• Alternative medicine not paid for by your primary health insurance policy, such as chiropractic services, acupuncture and acupressure treatments, aromatherapy, reiki, and massage therapy.
• Smoking cessation and weight-loss programs (these may be covered under an HMO but may not be covered under a PPO).
• Contraceptives, including birth control pills.
• Alcoholism treatment and counseling.
• Psychiatric and psychological counseling and treatment.
• Day care for your dependents. Your employer may offer a number of other coverages as part of your group health insurance plan or as separate plans that comprise part
of your employee benefits package. These coverages may include
dental and vision coverage, short-term and long-term disability, and
accidental death and dismemberment.

ENROLLING IN YOUR EMPLOYER'S PLAN

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When you begin employment with a company that offers a group health insurance plan, you will have the option of joining the plan.
Some companies specify a minimum period of employment, such as 60 or 90 days, before an employee is eligible for health benefits. This is because the company bears numerous administration cost associated with adding a new employee to the group health insurance plan, and it does not want to incur these costs for employees who may join the company and quickly leave.
If you do not join your employer's health insurance plan at the initial enrollment period, you will have to wait until the employer's next regular enrollment period, which may occur near the end of each calendar year. Again, your employer may allow employees to join the plan or modify coverage selections during specified periods to
minimize the costs associated with managing the health insurance plan.
If you have joined your employer's group health insurance plan and experience a qualifying life-changing event, such as marriage, divorce, death of a covered family member, birth of a child, or your spouse's loss of health insurance coverage, you will be able to make changes to your health insurance policy regardless of whether you
are within a regular enrollment period. You need to notify your company of the qualifying event within 30 days of the date it occurred. If a child has been adopted or born into your family,
coverage will begin on the date of adoption or birth of the child.

You will not be subject to a physical exam when enrolling in your employer's group health plan.
WHAT TO DO IF YOU AND YOUR SPOUSE BOTH HAVE GROUP PLANS AVAILABLE

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If you and your spouse both work for employers that offer group health insurance plans, you will be faced with choosing which plan to use to provide coverage for your family's healthcare needs. There are a number of factors you will need to consider when deciding whether to choose health insurance coverage through your own employer or through your spouse's employer:
• The types of health insurance plans available. You or your spouse may be eligible for a health insurance plan that is set up as a Preferred Provider Organization (PPO), a Health Maintenance Organization (HMO), a cafeteria plan, or another
type of plan. Evaluate your family's healthcare needs to determine which of the plans available through your respective employers will best meet your family's needs.
• The premium costs associated with each plan. As noted earlier in this chapter, an employer may elect to pay a portion of employees' health insurance premiums. Plans through different companies may carry different premiums depending on the
experience rating for that company's members. These factors can result in significantly different premium costs, even if your employer and your spouse's employer offer the same type of plan.
• The likelihood that you or your spouse will change jobs or become self-employed. If you or your spouse carry the health insurance coverage for your family and change employers, you
will be able to subscribe to your new company's health insurance
plan, assuming a plan is available through your new employer. However, you will find you have to deal with new premiums, different coverages, and perhaps a different type of health insurance plan. If you have already established a primary care physician and have established relationships with specialists or doctors employed by a specific hospital, you may find that a new health insurance plan will not cover services provided by some of these medical professionals or will cover their services only on
an out-of-network basis.
If the member of your family who carries the group health insurance policy becomes self-employed, you may see a drastic increase in premiums. Health insurance for self-employed individuals is often more costly than group health insurance
coverage these policies are rated differently than group policies, and you will not have an employer to pick up part of the premium costs. Also, if your family switches to a self-employed individual health insurance policy, your new insurer may not cover pre-existing conditions for up to one year after you begin coverage.
It is important that you take the time to carefully evaluate each plan available and your family's unique needs. Once you select a plan, you will not be able to switch your family to a different plan unless you are within your annual enrollment period, you or your spouse leave your employer, or some other qualifying event occurs.
The next chapter covers COBRA, a federal plan that will help you maintain your healthcare coverage if you separate from your
employer and do not have coverage available through your spouse's employer.



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