Q?What are HMOs and PPOs?

HMOs and PPOs are types of insurance plan networks. A Health Maintenance Organization (HMO) is an organization that coordinates care for insured members by contracting network care providers on a prepaid basis. An HMO requires you to choose a Primary Care Physician (PCP) who coordinates your care by seeing you for preventive care visits and common medical conditions, as well as being responsible for referring you to specialists or for certain procedures outside of the PCP’s area of expertise.

A Preferred Provider Organization (PPO) is an organization that selects “preferred” providers, any of whom an insured member can see without referrals or a Primary Care Physician’s go-ahead. When you receive care from one of these preferred providers, you’ll often pay a co-pay. Payment for other services in-network will count toward your deductible, if you have one.

Q?What is Coinsurance?

If you have a coinsurance amount on your policy, it will be in the form of a percentage — the amount of a medical bill you have to pay after you’ve met your deductible.

For instance, let’s say you have a $5,000 deductible, with a $10,000 out-of-pocket maximum and 20 percent coinsurance. You meet your deductible in October, but in November, you get sick and have to visit your doctor and have a few tests done. The bill for that comes to $1,000, but the negotiated rate is $300.

Since you’ve already met your deductible and are now in “coinsurance” mode, but haven’t yet met that out-of-pocket maximum, you’ll be paying 20 percent of that $300 amount (which would be $60). You’ll continue to pay 20 percent of any bills you get for accepted claims, until you’ve spent the rest of that remaining out-of-pocket maximum.

Q?What are High-Deductible Health Plans?

A High-Deductible Health Plan is a type of health plan that has lower premiums and higher deductibles.

In order to be called this, a HDHP must be qualified by the IRS, which can happen if the plan has a minimum annual family deductible of $2,500 or $1,250 for an individual. There are also restrictions on the maximum out-of-pocket, at $12,500 for a family and $6,250 for an individual. These plans are compatible with Health Savings Accounts (HSA’s) and in fact, are requirements for participation in an HSA.

An HDHP might be for you or your family if you’re generally healthy and are usually able to anticipate the amount you spend on health care, outside of your premium payment, per month.

The low premium allows you to make room in your budget to be able to put aside money in your HSA, which you can then spend on things like doctor’s visits, prescriptions, and any tests or procedures you have to get done. You won’t be paying co-pays, if that’s something you’re used to, but instead will pay the negotiated rate for your doctor or hospital bills, which you can do with the pre-tax/tax-deductible HSA funds.

Q?What is the difference between term life, whole life, and universal life insurance?

Term life insurance runs for a specific term or period of time and then ends. Permanent life insurance has no set term and is also called “whole life” coverage.  Universal life also fits into this category.

There can be a big difference between term & whole life insurance in terms of cost. Term life insurance is typically a lot cheaper with a much larger benefit, but then again, you (your survivors) only receive it if you die. Whole and universal life policies tend to cost more, but they also accrue a cash value that you can access while you are alive.

Q?What is an annuity?

An annuity is a contract between you and an insurance company in which you make a lump sum payment or series of payments and in return obtain regular disbursements beginning either immediately or at some point in the future.  The goal of annuities is to provide a steady stream of income during retirement.

Q?What is special event insurance?

If you organize family, business or community events, you know how much planning and effort is involved to make the occasion both safe and special for everyone. Even with the most careful planning, unexpected situations can arise. Special events insurance provides important liability protection for just these kinds of surprises.