HEALTH FAQS
Dental / Vision Insurance FAQ
Q: Can I apply for dental and/or vision insurance at any time?
A: Yes. However, dental and vision plans can usually only become effective
on the 1st of the month following the application. If you fill out an
application on April 4 th, the plan will be effective May 1st.
Q: What are waiting periods?
A: Dental plans have three levels of coverage. Basic, or preventative,
care is available as soon as the policy is active. Basic care includes
x-rays, exams and cleanings. Minor procedures, such as simple fillings
and extractions mostly have a waiting period of 3 months. That means
that your dental policy has to be active for at least 3 months, before
coverage begins. Any major procedures, such as root canals, crowns or
surgical extractions, have a waiting period of up to two years.
Disability Insurance FAQ
Q: Do I have to be totally disabled to receive benefits?
A: This depends on the policy provisions. Most disability policies offer
coverage for partial disability at a higher premium.
Q: Do I need a private disability policy if I qualify for social security disability?
A: There is no “yes” or “no” answer to this
question. First, you have to meet the rigorous requirements to receive
social security payments. Only 30% of applicants actually meet those
requirements. Even if you qualify, social security disability only pays
after you have been disabled for six months, and the benefits are rather
low. Private disability can pay after only 30 days of disability and
the payments are up to 60% or 70% of your taxable income.
Q: What is the difference between disability coverage and workers compensation?
A: Workers Compensation is usually linked to your employer and only
covers work related injuries. If you get hurt in your spare time, workers
compensation will not pay any benefits. Also, with a private disability
policy you can decide which benefit levels you want, what your waiting
period is and for how long the benefits will be paid.
Heath Insurance FAQ
Q: What is a PPO plan?
A: PPO stands for “Preferred Provider Organization”. Under
a PPO plan, you will find a network of physicians and facilities that
are contracted with an insurance company. Those contracted providers
cannot charge you more for a visit or service than what is listed in
your policy. If you choose a non-preferred provider, your co-payments
are higher than those agreed upon.
Q: What is a pre-existing condition?
A: Any medical condition that has been diagnosed before or at the time
of your application, is considered pre-existing. Unless you can prove
that you had prior coverage without lapse, any such condition will be
excluded from coverage for 6 months after your plan goes into effect.
Q: How long does it take for an application to be processed?
A: This can vary greatly. The more detailed the application, the faster
is the turnaround time. If an insurance company needs to review your
medical records for consideration, it mostly depends on how fast the
physician’s office or medical facility will get those records to
the company. We have seen everything from 24 hours to 3 months.
Life Insurance FAQ
Q: How do I determine what kind of life insurance policy I need?
A: You should talk to an agent and explain to what use you would want
to put the proceeds of a life policy. If you are looking to secure a
loan, a term policy is usually the right choice. This type of policy
is also very popular with younger people who are just starting a family
and have not yet established a secure retirement. Permanent life policies
are also an investment tool, and although it is best to start a permanent
policy at a young age, the premiums are considerably higher than those
of a term policy.
Q: How much life insurance do I need?
A: There are formulas to determine the amount of coverage if you are
unsure. Ask yourself how much money your spouse would need to pay for
the funeral, take time off work, pay the bills, put the kids through
college, etc. There is no one universal amount that fits everybody. Your
agent can help you determine the amount needed for your situation.
Q: What information do I need to provide in an application?
A: Every insurance company asks different questions, but some are the
same across the board. Besides your personal information, you will have
to provide your annual income, your medical history, give information
about your hobbies and vacation preferences and family history. In most
cases, a physical exam is also needed, which will be scheduled through
your agent and is usually free of charge.
Long Term Care Insurance FAQ
Q: How much does a Long Term Care policy cost?
A: There is no simple answer. A premium is determined by your age, benefit
amounts, benefit period, and mostly your health.
Q: What are the odds of needing Long Term Care?
A: Statistically, after age 65, there is a 60% chance of spending time
in a nursing home. An additional 15% will require some kind of care at
home. So you see, 3 out of 4 people will need some kind of Long Term
care after age 65.
Q: Doesn’t MediCal pay for Long Term Care?
A: In order to be eligible for MediCal, you have to be able to prove
that you have spent down your assets on Long Term Care and are now legally
broke. You will have to provide good financial records to back up your
claim and if somebody else has to find those records for you, it gets
increasingly difficult.
Medicare Insurance FAQ
Q: What is the difference between a Medicare Supplement and a Medigap policy?
A: There is no difference. They are just two different names for the same thing.
Q: How do I know which plan to choose?
A: Your agent can help you decide which plan works best for you. It
mostly depends on how much money you spend in a year for medical services.
Just keep in mind, that it might be difficult to change to a higher end
plan if you need more coverage.
Q: Do I have to get a supplement plan at the same time I become eligible
for Medicare?
A: No. Theoretically, you can apply for a supplement plan any time,
but once you have a medical condition, it can be very difficult to obtain
insurance. If you apply for a supplement plan within 6 months of your
Medicare Part B effective date, insurance companies cannot decline your
application, no matter what your health status is.
Q: I’m not taking any drugs. Why should I get a prescription drug plan?
A: Even if you are not taking any prescription drugs at the moment,
you can’t know how long this will continue. Although it is not
mandatory to obtain a drug plan, you will have to pay 1% additional premium
once you have the need for a plan for every month you did not have one before.
For example: You have been a Medicare recipient since August of 2006.
In December of 2007 your physician recommends you take medication to
control your blood pressure. Starting January of 2008 your drug plan
will go into effect. You have delayed getting a plan for 16 months, and
will now have to pay an additional 16% in premium every month.
Section 125 Insurance FAQ
Q: How does a Section 125 Cafeteria Plan benefit the employer?
A: An employer can deduct any voluntary contributions made by their
employees from the company’s reportable payroll. These deductions
will create savings in FICA taxes and insurance premiums that are based
on payroll (such as Workers Compensation).
Q: How does it benefit the employee?
A: Depending on the coverages offered, employees can pay for their personal
life insurance, disability insurance, day care and dependent’s
health premiums (if not covered by the employer) with pre-tax dollars.
Q: Do I need to offer health insurance to my employees in order to put a Cafeteria Plan in place?
A: Not necessarily. However, an employer must offer some kind of benefit
with a minimum contribution, to allow an Cafeteria Plan to be put in place.
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