If you’re shopping for health insurance for individuals, ignorance is not bliss. The more you know, the more likely you’ll find affordable health care insurance that suits your needs and your budget. Check your health insurance IQ and test your knowledge of these common terms and concepts used by the health insurance industry before you shop for competitive health insurance quotes online.
Creditable Coverage Means
A. The policy is a really good one with lots of credibility in the health insurance industry.
B. A requirement that you show proof of past health insurance.
C. Insurance you can pay for with a credit card.
The correct answer is B. Apply for health insurance and you’ll be asked to produce a certificate of creditable coverage issued by your last health insurer that says how long the policy was in place. It can help offset the length of time your new insurance will impose a pre-existing condition exclusionary period. If you are fired or laid off from a job with a group plan, be sure to contact the insurance company and ask to have a certificate of creditable coverage mailed to you.
A. A dangerous venomous snake.
B. A helpful medical appliance used after breast augmentation.
C. A federal law regarding health care insurance.
The correct answer is C. Cobra (the Consolidated Omnibus Budget Reconciliation Act) was passed in 1985 and gives you the right to continue on your employer-provided group health insurance if you quit, are let go or have your hours reduced from full-time. The duration of time you can stay on COBRA ranges is usually 18 months (up to 36 for a divorced spouse with dependent children, and disabled Americans). The problem with COBRA is that you will have to pay 100% of the plan cost, plus a 2% administration fee.
Social Health Insurance is
A. Health care coverage that is subsidized with tax payer dollars through government programs.
B. Health insurance provided by Facebook.
C. Coverage for sexually transmitted diseases.
The correct answer is A. Social health insurance includes programs like Medicare (mostly for Americans aged 65 and older) and Medicaid, a federal program administered by individual states to provide comprehensive health care for indigent people who qualify.
Mandated Benefits are
A. Benefits that expire after a specific date from the time you take out a policy.
B. Health care benefits that apply exclusively to single men.
C. Benefits that health insurance policies must offer by federal and/or state law.
The correct answer is C. A health insurance mandate requires that a policy cover a specific type of health care provider (chiropractors, for example), a specific benefit (fertility treatment) or a specific patient population. Mandates help provide broader health care coverage but they can also drive up costs.
A Health Savings Account is
A. A pre-tax medical savings account you can use to pay for medical expenses.
B. A credit on your premium from your health insurance company to encourage you to take better care of your health.
C. A form from your health insurance company that asks you to account for trips to health care providers.
The correct answer is A. Health Savings Accounts (HSAs) are usually coupled to high-deductible health insurance plans. The maximum amount an individual can contribute in 2012 is $3,100 ($6,250 for families). The money is pre-tax and can be withdrawn at anytime without federal tax liability if you use it for a qualified medical expense. Unlike use-it-or-lose-it Flexible Spending Accounts, HSAs roll over from year to year, accumulating interest. You can take money out of them for non-medical uses, but will have to pay penalties for doing so if you are under retirement age.
Check your health insurance IQ before you purchase any policy will not only save you money and time, but help you find the right coverage.