The topic of today's subject is health insurance. So, let's get started with a basic definition.
Health insurance is a plan that individuals pay into on a predetermined schedule by which they may cover their health care costs. Sounds kind of like a savings plan doesn't it? It's a bit more complicated than that. I would personally define health insurance as group savings plan that everyone can benefit from.
How does health insurance work? The simple answer is, it's about shared expense. When you sign up for health insurance, you join a group of other people to combine your healthcare purchasing power. Your insurer covers the whole group, rather than individuals, so everyone shares the cost of doctor visits.
There are many options out there, and it can be very confusing if you have no idea what all the terminology is. So now I will cover some of the terminology and attempt to explain what all those big legal words mean.
Let's take a look at the terms of differing kinds of insurance. The most common type of insurance is HMO or PPO. HMO stands for Health Maintenance Organization. Basically this is an organized system consisting of providers who administer comprehensive prepaid health care that have five basic attributes. They provide care in a defined geographic area. Provide or ensure delivery of an agreed-upon set of basic and supplemental health maintenance and treatment services. Provide care to a voluntarily enrolled group of persons. Require their enrollees to use the services of designated providers. Receive reimbursement through a predetermined, fixed, periodic prepayment made by the enrollee without regard to the degree of services provided. In other words you have to use their doctors and they can decide to decline to cover any expense they deem unnecessary. The doctors are contracted to get paid a certain amount for each procedure.
So, what is a PPO? PPO stands for Preferred Provider organization. This is a group of doctors, hospitals and other providers who have an agreement with an insurer or a third-party administrator to provide health services at reduced rates to the insurer's or administrator's clients. This is a type of health insurance plan that offers in-network as well as out-of-network coverage. However, out-of-network coverage is typically subject to either a higher deductible or lower co-insurance than in-network, often times both. No referrals are required in order to access care. So, you have a choice to go to any doctor you want and still have some cost coverage.
So, now we have covered two of the options available. Here are some basic terms that you will encounter in these two options
Coinsurance
The amount you are required to pay for medical care in a fee-for-service health plan after you have met your deductible. The coinsurance rate is usually expressed as a percentage. For example, if the health insurance company pays 80 percent of the health claim, you pay 20 percent.
Co-payment
Another way of sharing medical costs. You pay a flat fee every time you receive a medical service (for example, X amount of $ for every visit to the doctor). The health insurance company pays the rest.
Deductible
The amount of money you must pay each year to cover your medical care expenses before your health insurance policy starts paying.
Maximum Out-of-Pocket Expenses
The most money you will be required pay a year for deductibles and coinsurance. It is a stated dollar amount set by the health insurance company, in addition to regular premiums.
Premium
The amount you or your employer pays in exchange for health insurance coverage.
Covered Expenses
Most health insurance plans, whether they are fee-for-service, HMOs, or PPOs, do not pay for all health care services. Some may not pay for prescription drugs. Others may not pay for mental health care. Covered health care services are those medical procedures the health insurer agrees to pay for. They are listed in the health insurance policy.
Customary Fee
Most health insurance plans will pay only what they call a reasonable and customary fee for a particular health care service. If your doctor charges $1,000 for a hernia repair while most doctors in your area charge only $600, you will be billed for the $400 difference. This is in addition to the deductible and coinsurance you would be expected to pay. To avoid this additional cost, ask your doctor to accept your health insurance company's payment as full payment. Or shop around to find a doctor who will. Otherwise you will have to pay the rest yourself.
Exclusions
Specific conditions or circumstances for which the health insurance policy will not provide benefits.
Pre-existing Condition
A health problem that existed before the date your health insurance became effective.
Coordination of Benefits
A system to eliminate duplication of benefits when you are covered under more than one group health insurance plan. Benefits under the two health insurance plans usually are limited to no more than 100 percent of the health claim.
Non-cancellable Policy
A policy that guarantees you can receive health insurance, as long as you pay the premium. It is also called a guaranteed renewable policy.
Primary Care Doctor
Usually your first contact for health care. This is often a family physician or internist. A primary care doctor monitors your health and diagnoses and treats minor health problems, and refers you to specialists if another level of health care is needed. In many health insurance plans, health care by specialists is only paid for if your are referred by your primary care doctor. An HMO or a PPO plan will provide you with a list of doctors from which you will choose your primary care doctor (usually a family physician, internists, obstetrician-gynecologist, or pedicatrician). This could mean you might have to choose a new primary care doctor if your current one does not belong to the health insurance plan. PPOs allow members to use primary care doctors outside the PPO network (at a higher cost).
Third-Party Payer
Any payer for health care services other than you. This can be a health insurance company, an HMO, a PPO, or the Federal Government.
On that note we will now discuss Government health programs. Medicare is paid for by you. That little deduction on your paycheck every payday that says medicare. This is a 'bank' of funds from every working, taxpaying person that goes to pay health care cost claims for those who are no longer working and are signed up to take back the funds they put in when they were working. Not everyone will get medicare. At present, you have to have paid into this fund to access it. Seems fair to me. Would you want the interest from your personal savings account to go to some nameless person who did not contribute to your account? Now, this does not mean that you will only get out what you paid in. Again this is a group account and each state budgets what amount they can give out each year. Not all services are covered under medicare, and you may still end up paying a small amount or co-payment.
Next up is Medicaid. The two sound similar, but are not. This is a fund that is paid for by all taxpayers. I don't know all the details of the budgeting on this, so this is my best educated guess. Each state sets aside a certain amount for welfare, and that money goes to those in need who either do not qualify for medicare as yet, or have never contributed. Each state will have their own criteria for this program. Some counties also have discount programs and sliding scale fees for those in the lower income bracket.
This takes us to the difference between health insurance and discount programs. Health insurance pays the overall cost of your care and you pay a co-payment. Health discount programs are basically like a coupon. You show them you have the membership and they give you a lower rate for the services in question.
And now for the shameless promotion. While I am in no way on expert on any of these topics, I do have some education on them. If you have found my blog helpful and informative monetary donations sent to my paypal address of tmmyprl@aol.com are always appreciated. :)
Source list:
http://www.goaskalice.columbia.edu/0853.html
http://www.wikipedia.com/
http://www.foreignborn.com/self-help/health_insurance/5-ins_terms.htm
Personal experience and education as a medical office assistant.
Recommended reading:
http://healthinsurance.about.com/od/understandingmanagedcare/a/HMOs_vs_PPOs.htm
http://en.wikipedia.org/wiki/Publicly_funded_health_care
Sunday, September 5, 2010
Saturday, September 4, 2010
What are the employment options available to today's job seeker?
In these hard times when you find yourself out of work and looking you have a few options. But how do you know which is the best one? Today I will take a look at several options.
The options available are temporary work from an agency, a direct hire permanent position, a contract position, and self employment. We'll start by defining each option and then listing the pros and cons of each.
The first and most common option today is a direct hire permanent position. This is defined as when a company hires you directly to a permanent post in the business. This means that if you manage to survive through layoffs, firings, and all the typical workplace politics you can possibly retire from the company.
So, what are the pros and cons of being hired directly to a company? Let's take a look. A permanent job offers (potential) job security and stability. This can be a major source of peace of mind. Most companies that directly hire tend to promote from within, so your chances of moving up the career ladder are very good. The pay overall will generally be higher than the other options for the field the company is in. The next great thing you will find with this type of employment is benefits. Like health insurance, raises, holiday pay, and some sort of investment plan for retirement. Whether it's a simple 401K or an employee stock purchase plan. Your rights as an employee directly hired to a company are much better than employees who are contracted or temps. Unemployment is much easier to get in some states if you lose your job with this type of employment. Transferring to another location should you move is quite simple as well. Some companies also help with costs of some further education if you take classes that will coincide with the company's aims.
So, you may be wondering now what can the cons possibly be? Well, there is always a chance of a layoff. Or, you may hit a wall on the career ladder or cap on salary that you can't get past. It is also possible that you may get bored with the same old routine every single day.
The next employment type we will look at is temporary work. Temporary employment is defined as a job that you work at for a set amount of time and then are released. As defined in Wikipedia: Temporary work or temporary employment refers to a situation where the employee is expected to leave the employer within a certain period of time. Temporary employees are sometimes called contractual or seasonal or freelance or temps.
There are literally thousands of temporary agencies that have business agreements with companies to provide the manpower they need. These companies make a profit by paying the temp less than what they are paid by the company you will work at. They look at all the skills you have and find a company with an opening that fits your skill set.
The pros of this type of arrangement for you, the worker are that you have a company that is your agent so to speak. They will find the work for you if it is available. You can work any time frame from one day to an indefinite amount of time, provided you adhere to the policies. It is possible that a company may like a temp worker so much that the worker is hired onto the company. So, the pros are possible direct hire by the company, flexibility to work when you want, and to work in various environments. It's a good way to learn a new trade and get your foot in the door at a good company.
The cons are that you never know when the assignment may end. You may not have steady work to pay the bills. You may end up at a company you hate to be at. You will not get any raises or benefits with this kind of employment. No 401K, no vacation days, no accrued sick time, no health insurance from the company. Also, at the end of the assignment, no unemployment can be collected.
Next up is contract work. The definition of a contract worker is someone who is not an employee of a company. He is a self-employed person who operates his own business usually as a sole proprietor. He/she is hired for a specific task or project, sets their own rates and pays their own income taxes. A contract worker must find their own clients and complete a specific task for them. You are not bound by the control of the company.
The pros of being a contractor? Control your own hours and choose your own clients. You will not necessarily be committed to only one company at any given time. You may concurrently work for as many companies as you choose. You have the right to refuse additional work from any company if that is your choice. You are free to work for who you choose to work for. You can negotiate your pay and hours. There are multiple cons to this type of employment. The first thing I can think of is that you have to pay your own medicare and federal taxes directly rather than having it taken out of your check. You have to find your own clients. You have again no benefits that are company provided. No 401K, no vacation days, no accrued sick time, no health insurance from the company. Also, at the end of the contract, no unemployment can be collected. You are bound by a contract to complete a task for a client. This is very similar to self employment and is actually a form of self employment.
Sounds great right? Well, let's look at some of the cons of self employment. No outside accountability. No boss looking over your shoulder also means it is entirely up to you to stick to your goals. It can get very lonely at times. No coworkers to discuss troubles with. What about job selection? Finding a job for yourself where you are the boss can be quite challenging. What about insecurity? No benefits, it's all up to you to invest in a retirement plan, and get your own personal health insurance.
Now, not everyone will agree with my pros and cons lists. Each person will look more favorably on their own personal favorite form of employment. I hope this blog entry has helped to define and give a bit more information on the types of employment available. It's up to each person to decide what is right for them at the various stages of their life. My next blog topic will discuss health insurance. What exactly is health insurance and how does it work? What is available out there as far as private and non private options? What is the difference between an HMO and a PPO plan? Do I have to take what is offered at work or are there other options out there? It will take me about a week to gather all the information on this particular topic.
Sources for this blog: Wikipedia, suite101, and of course personal experience. Ofcourse, I hope the shameless promotion I will now perform will not dissuade you from continuing to follow my blog. If you found my blog helpful and informative donations (as in voluntarily sending me money) are always appreciated and may be sent to my paypal, tmmyprl@aol.com.
The options available are temporary work from an agency, a direct hire permanent position, a contract position, and self employment. We'll start by defining each option and then listing the pros and cons of each.
The first and most common option today is a direct hire permanent position. This is defined as when a company hires you directly to a permanent post in the business. This means that if you manage to survive through layoffs, firings, and all the typical workplace politics you can possibly retire from the company.
So, what are the pros and cons of being hired directly to a company? Let's take a look. A permanent job offers (potential) job security and stability. This can be a major source of peace of mind. Most companies that directly hire tend to promote from within, so your chances of moving up the career ladder are very good. The pay overall will generally be higher than the other options for the field the company is in. The next great thing you will find with this type of employment is benefits. Like health insurance, raises, holiday pay, and some sort of investment plan for retirement. Whether it's a simple 401K or an employee stock purchase plan. Your rights as an employee directly hired to a company are much better than employees who are contracted or temps. Unemployment is much easier to get in some states if you lose your job with this type of employment. Transferring to another location should you move is quite simple as well. Some companies also help with costs of some further education if you take classes that will coincide with the company's aims.
So, you may be wondering now what can the cons possibly be? Well, there is always a chance of a layoff. Or, you may hit a wall on the career ladder or cap on salary that you can't get past. It is also possible that you may get bored with the same old routine every single day.
The next employment type we will look at is temporary work. Temporary employment is defined as a job that you work at for a set amount of time and then are released. As defined in Wikipedia: Temporary work or temporary employment refers to a situation where the employee is expected to leave the employer within a certain period of time. Temporary employees are sometimes called contractual or seasonal or freelance or temps.
There are literally thousands of temporary agencies that have business agreements with companies to provide the manpower they need. These companies make a profit by paying the temp less than what they are paid by the company you will work at. They look at all the skills you have and find a company with an opening that fits your skill set.
The pros of this type of arrangement for you, the worker are that you have a company that is your agent so to speak. They will find the work for you if it is available. You can work any time frame from one day to an indefinite amount of time, provided you adhere to the policies. It is possible that a company may like a temp worker so much that the worker is hired onto the company. So, the pros are possible direct hire by the company, flexibility to work when you want, and to work in various environments. It's a good way to learn a new trade and get your foot in the door at a good company.
The cons are that you never know when the assignment may end. You may not have steady work to pay the bills. You may end up at a company you hate to be at. You will not get any raises or benefits with this kind of employment. No 401K, no vacation days, no accrued sick time, no health insurance from the company. Also, at the end of the assignment, no unemployment can be collected.
Next up is contract work. The definition of a contract worker is someone who is not an employee of a company. He is a self-employed person who operates his own business usually as a sole proprietor. He/she is hired for a specific task or project, sets their own rates and pays their own income taxes. A contract worker must find their own clients and complete a specific task for them. You are not bound by the control of the company.
The pros of being a contractor? Control your own hours and choose your own clients. You will not necessarily be committed to only one company at any given time. You may concurrently work for as many companies as you choose. You have the right to refuse additional work from any company if that is your choice. You are free to work for who you choose to work for. You can negotiate your pay and hours. There are multiple cons to this type of employment. The first thing I can think of is that you have to pay your own medicare and federal taxes directly rather than having it taken out of your check. You have to find your own clients. You have again no benefits that are company provided. No 401K, no vacation days, no accrued sick time, no health insurance from the company. Also, at the end of the contract, no unemployment can be collected. You are bound by a contract to complete a task for a client. This is very similar to self employment and is actually a form of self employment.
Sounds great right? Well, let's look at some of the cons of self employment. No outside accountability. No boss looking over your shoulder also means it is entirely up to you to stick to your goals. It can get very lonely at times. No coworkers to discuss troubles with. What about job selection? Finding a job for yourself where you are the boss can be quite challenging. What about insecurity? No benefits, it's all up to you to invest in a retirement plan, and get your own personal health insurance.
Now, not everyone will agree with my pros and cons lists. Each person will look more favorably on their own personal favorite form of employment. I hope this blog entry has helped to define and give a bit more information on the types of employment available. It's up to each person to decide what is right for them at the various stages of their life. My next blog topic will discuss health insurance. What exactly is health insurance and how does it work? What is available out there as far as private and non private options? What is the difference between an HMO and a PPO plan? Do I have to take what is offered at work or are there other options out there? It will take me about a week to gather all the information on this particular topic.
Sources for this blog: Wikipedia, suite101, and of course personal experience. Ofcourse, I hope the shameless promotion I will now perform will not dissuade you from continuing to follow my blog. If you found my blog helpful and informative donations (as in voluntarily sending me money) are always appreciated and may be sent to my paypal, tmmyprl@aol.com.
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