A CONSUMER’S GUIDE TO

Published by the Vermont Department of Banking, Insurance,
Securities & Health Care Administration

INTRODUCTION

Health insurance cost and coverage are important issues for consumers throughout Vermont and nationally. Choosing the best insurance policy to fit your needs can be a difficult and stressful task. Some of us may have health insurance provided by our employers, while others may have to purchase health insurance on an individual or small group basis.

There are many types of health insurance policies you can buy. It can be hard to figure out the difference between managed care plans like HMOs, PPOs, POSs or indemnity plans. In addition, there are public programs that pay for health care, like Medicare and Medicaid, which you may have instead of, or in addition to, other types of health insurance.

This booklet, developed by the Vermont Department of Banking, Insurance, Securities and Health Care Administration, helps you understand health insurance and how it works. It explains the different types of insurance policies available to you and what to expect once you have health insurance. With a little knowledge, you can choose the right kind of coverage for you and your family.

Should you have any further questions regarding health insurance, or have problems with a company about its services or a particular claim, you can ask for help from the Division of Health Care Administration’s Consumer Assistance Section. Call or write:

Health Insurance Consumer Assistance Section
Division of Health Care Administration
89 Main Street Drawer 20
Montpelier, VT 05620-3601

WHAT IS HEALTH INSURANCE?

Health insurance is a general term used to describe many kinds of insurance coverage. Generally, when people say “health insurance”, they mean comprehensive medical insurance. This kind of insurance usually covers most of the costs of keeping you healthy and getting you healthy if you become ill.

• Disability insurance. Disability policies provide replacement income, a set schedule of payments, or coverage for expenses if you cannot do your regular job.

• Long-term care insurance. Long-term care insurance policies help pay for the costs of nursing home, home health, adult day care and other similar types of care.

• Medicare supplemental insurance (“Medigap”). These policies pay for expenses not covered by Medicare, like deductibles and coinsurance. They may also pay for services that Medicare does not cover such as prescription drugs.

• Accident and other limited insurance. Policies for accidents, accidents and sickness, and accidental death and dismemberment can pay benefits to the policyholder, surviving family members, or to health care providers.

• Blanket insurance. This is a specific policy for students or a similar defined group.

Please note that workers’ compensation coverage and discount health plans are not considered health insurance.

If you have questions about any of these coverage types, call the Division of Health Care Administration for consumer assistance at 800-631-7788. For information on employment-related injuries, call the Vermont Department of Labor and Industry at 802-828-2286.

How can I get health insurance?

There are two basic ways of getting health insurance. If you work, your employer may offer you and your family health insurance as part of your benefits package, like vacation time or overtime pay. If your employer does not offer such benefits, or if you are self-employed or not working, you can buy your own insurance directly from a health insurance company.

When you buy a health insurance policy, the insurance company agrees to pay certain expenses listed in the policy in exchange for a “premium” payment. Premiums are paid on a monthly, quarterly or annual basis and remain at a specific dollar amount for a set period of time, usually one year. If your employer offers you health insurance, your employer will generally send the premium to the insurance company. If you buy your own insurance, you are responsible for paying the premium to the company.

Health insurance obtained through your employer

Most Vermonters get health insurance coverage through their employers. It is important to understand, however, that employers who pay for your insurance do so voluntarily – no law requires them to buy insurance for you. Employers have many options when they choose to buy health insurance for their employees. For example, your employer may pay for insurance only for you, or may decide to offer insurance for you and your family. Employers also have to decide how much of the premium they will pay. Some employers pay the full cost for health insurance. Others require employees to pay some or all of the monthly premium. The portion of the premium that an employee has to pay is called a “contribution”.

Some employers “self-insure” the health benefit plans that cover their employees. If your employer is self-insured, it means that your employer, not an insurance company, is responsible for payment of your covered health care services. These plans may be administered by the employer itself, or the employer may contract with an outside administrator (often a health insurance company) to process claims. Self-insured plans are regulated at the federal level by the Department of Labor. They are not subject to state insurance laws or state mandated benefits.

It is sometimes hard to know whether you are insured through a regular insurance company or your employer is self-insured, since self-insured employers often contract with insurance companies to administer benefits under the employer’s policy. The best way to know is to call your employer’s human resources or personnel department, or the person who handles your company’s insurance plans, and ask.

If your employer is not self-insured, your insurance will be offered through an insurance company. Plans available to employers are either “large group” or “small group” plans, depending on the size of your company (the “group”).

• Small Group insurance is available to employers with 1 to 50 employees or to those people who are self-employed.

Each of these provides comprehensive medical insurance, but different state and federal laws may affect the exact make-up of each type of plan. In both cases, your employer generally has some ability to determine what benefits will be offered and the type of plan offered (traditional indemnity or HMO, for example), and can determine how much, if any, of the premium it will cover (and therefore how much you will have to pay). The employer can also decide whether to offer coverage to you alone, or to you and your family (dependents).

Health insurance you can buy yourself

If you cannot get health insurance through your employer, or if you are not employed, you may buy individual (also called non-group) coverage for yourself and your family. Please note that if you are employed and your employer offers you health insurance coverage, you cannot buy individual coverage.

Special protections for small group and individual policyholders

Small group policies and individual policies in Vermont contain special protections for Vermont consumers that include:

• “Guaranteed issue.” Small group and individual policies are “guaranteed issue.” This means health insurers must issue them to all groups or persons eligible under Vermont law to buy such policies, and the insurers must guarantee acceptance of every eligible group member or individual.

• “Guaranteed renewable.” Health insurers may not cancel your small group or individual coverage at the end of your policy term (usually one year) because of the number of services you use, as long as the premium is paid on time.

• “Community rating.” Vermont’s laws require all small group and individual comprehensive major medical insurance policies to offer at least three “tiers” of coverage, which are “community rated.” This generally means that insurance companies cannot make you pay more than anyone else buying the same type of policy because of your health status or geographic location. The three most common tiers of coverage are:

• Family coverage. This covers two adults and any dependent children, or one adult and more than one dependent child.

Other types of health insurance

You may be eligible for one or more of the following government health insurance programs:

• Medicaid is a state-sponsored health insurance plan paid for by state and federal taxes. You must meet certain eligibility requirements in order to get Medicaid coverage. Vermont’s Medicaid programs include coverage for children (Dr. Dynasaur), coverage for uninsured low-income Vermonters (Vermont Health Access Plan), and coverage for low-income families with children or people who are disabled.

For information on eligibility contact the Office of Vermont Health Access (OVHA) at 800-250-8427 or call your local Department of Prevention, Assistance, Transition and Health Access (PATH) district office, listed in your telephone book.

• Medicare is a federally funded insurance program for people age 65 and older and certain disabled people under age 65. Medicare has two parts:

• Part A covers hospital charges. You do not have to pay anything for Part A coverage if you have paid into the federal Social Security program for at least 40 quarters.

• Part B covers physician and other professional health care services. You pay a monthly premium for Part B coverage, which is deducted from your Social Security check

• Medicare supplemental insurance is also available to pay for benefits not covered by Medicare (Parts A & B). It is offered through insurance companies and covers coinsurance, deductibles and co-payments and may include additional benefits for services up to a specific limit. In general, it pays for the portion of the cost of services not covered by Medicare. It is therefore a “supplement” to the basic Medicare policy. Your options in Vermont include seven standardized plans (known as plans A, B, C, D, E, H and J), each of which has specific benefits. These plans are also referred to as “Medigap” plans because they cover the “gaps” in your Medicare coverage.

If you apply for a Medicare supplement policy within six months of when you are 65 or older and enroll in Medicare Part B, the insurance company must accept you. Please note: effective January 1, 2003, all insurance companies that offer Medicare Supplement policies to people who are 65 years or older and eligible for Medicare, must now offer the same policies to people who are under 65 years old, disabled and eligible for Medicare, during all enrollment periods.

If you are a Medicare beneficiary and you are not sure what choice is best for you, call the 1-800-MEDICARE or visit the Medicare website at www.medicare.gov. You may also contact the State Health Insurance Assistance Program (SHIP) at 800-642-5119.

TIP

If you are eligible for Medicare, you have several coverage choices:

Medicare alone. You may choose not to buy additional coverage. This means you must pay out of your own pocket for services that are not covered by Medicare.

Medicare plus a Medicare supplemental insurance policy. In addition to your Medicare coverage, you can buy a Medicare supplemental insurance policy, which may pay for some bills not covered by Medicare Parts A and B. The exact items paid for by a Medicare supplemental policy depend on which type of plan you buy.

Medicare plus Medicaid. Even if you have Medicare, you may still be eligible for Medicaid coverage for services not covered by Medicare.

The Different Types of Health Insurance Plans

Comprehensive medical insurance is offered to Vermonters, through employers or on an individual (non-group) basis, through several different types of insurance plans. Some insurance companies offer only one of these plans, while others may offer some or all of them.

• Indemnity plans. These generally allow you to use any doctor you choose. You are usually required to pay a set amount each year, called a “deductible” before the plan begins to pay a percentage of your medical expenses, called coinsurance.

Example: The plan has a $1,000 annual deductible per person. Generally, once you meet your deductible the insurance will pay 80% and you will be responsible for 20% of the allowed charge, which is determined by the insurance company. Most plans also have an annual out-of-pocket maximum. The out-of-pocket maximum is the most that you will pay for covered medical services in one year.

Please note that what an insurer will pay — and what you may end up paying — could differ depending on whether a provider “participates” with your indemnity insurer. A “participating provider” has agreed to accept a certain amount in payment from your insurer, so you will generally not be charged anything other than your deductible or coinsurance amount. If you go to a “non-participating provider”, the insurance plan will only pay its portion (80% in this example) of what they determine is the “usual and customary fee” for the particular service you receive. You may also pay any difference between the amount billed by the provider and the amount the insurance company determines is the usual and customary fee. You should call your insurance company’s member services department to find out if an individual provider is participating or non-participating.

• MSAs (Medical Saving Accounts) are often offered with indemnity health insurance plans. An MSA allows you to set aside money to pay for out-of-pocket expenses such as insurance deductibles, co-payments or co-insurance. An MSA also allows you to pay for expenses such as dental care or eyeglasses that are not covered by your health insurance.

MSAs must be combined with a qualified, high deductible health insurance policy, which can be less expensive to buy, but require the policyholder to pay more out-of-pocket. All monies deposited into an MSA are pre-tax dollars, so you only pay taxes on the amount you withdraw to pay for certain medical expenses. An MSA can only be used for specified medical expenses.

To establish an MSA, you must first have health insurance on a small group or self-employed basis, which includes an MSA option. An MSA is a tax-exempt trust or custodial account available through financial institutions such as a bank, but it may also be offered though an insurance company. You do not need IRS approval to start an MSA account; however, the IRS sets the rules and regulates MSAs. You can use the account to pay the premiums for the accompanying insurance plan, as well as to pay your deductible, which is typically between $1,500 and $2,500 for an individual and between $3,000 and $5,000 for a family.

• HMOs (Health Maintenance Organizations) may also be called “managed care plans.” HMOs attempt to control the cost of health care by managing your care. This means that you must choose a “primary care provider” from a network of providers who have agreed to participate in your HMO. You then go to your primary care provider for all services. If your primary care provider cannot help you, he or she will give you a “referral” to go to a specialist, who must also be part of the plan’s network of providers. Most HMOs require you to pay a small amount ($10 or $15, for example) each time you get medical services. Once you have paid your co-payment, the plan pays for everything else that is covered by your policy.

One important difference between HMOs and indemnity plans is that HMOs usually pay for preventive services, like routine physicals, for no more cost to you than your usual office visit co-payment. HMOs provide services within a defined geographic area. Generally speaking, you must live or work within the HMOs area. HMOs will pay for limited services outside of their areas under certain circumstances (usually emergency services).

• PPOs (Preferred Provider Organizations). These plans are a cross between an indemnity plan and an HMO. They are less restrictive than HMOs, but more restrictive than an indemnity plan in terms of both access and cost. A PPO plan will give you the choice of getting care from either a network or a non-network provider, but you will pay more if you go out of network, either through a higher co-payment or a higher percentage of coinsurance.

Example: You have the choice of Doctor Kildare or Doctor Casey. Doctor Kildare has joined the PPO network; Doctor Casey has not. Here’s what might happen depending on which doctor you use (and your plan’s co-payments and coinsurance requirements):

• POS (Point-of-Service) Plans. POS plans are sometimes offered by HMOs to give their members more choice of providers, but at an additional cost. Under a POS plan, HMO members pay only their usual co-payment for covered services obtained from their primary care providers or through referrals to specialists within the HMO’s network. They are free to use out-of-network providers, too, but will usually pay a higher co-payment or some kind of deductible in addition to the co-payment. Premiums for belonging to a POS plan are usually higher than for belonging to an HMO.

What is “managed care”?

In a managed care plan you choose your primary care doctor or other health care provider (often called a “primary care provider”) from the plan’s provider list (called a “network”). This person coordinates all decisions about the medical care you will get from your plan. Usually you will need to call your primary care provider’s office first to get a referral before going to another provider or to the hospital.

Most managed care plans are full insurance policies offered by HMOs (health maintenance organizations) or PPOs (preferred provider organizations). Many indemnity insurers “carve out” some of their benefits and administer them through managed care companies. For example, you may have an insurance contract that allows you to go to any of the company’s participating providers, but will still require you to go through a managed care company to use your mental health benefits. In that case, you would have to work directly with the managed care company to get your mental health benefits. And you may be subject to different rules on how to get those services and whom you could get them from.

Vermont has a “patient bill of rights”

Vermont has a broad set of consumer protections for people insured through managed care plans. Known as “Rule 10,” these protections include the right to information about how your plan works and the right to covered services under the terms of your contract. Other areas covered by Vermont’s patient bill of rights include:

The right to emergency services. If you have a medical problem that you reasonably believe poses serious risks to your health, managed care plans have to pay for your visit to an emergency room, even if it later turns out there was no emergency.

Reasonable access to the plan’s providers. Managed care plans are required to have enough providers, both primary and specialty care, to care for all of their members. This means that you should be able to see providers relatively close to your home and without having to wait an unreasonable time to get an appointment.

Access to specialty services. Plans must allow you to see specialists as necessary. This includes the use of “standing referrals” to specialists if you have a condition requiring ongoing care. Plans must also allow specialists to coordinate your care if you have life-threatening, degenerative or disabling conditions.

Direct access by women to gynecological health care services. Plans must allow women to see their network gynecological health care providers (OB/GYNs or Planned Parenthood, for example) without a referral from their primary care provider at least twice a year for reproductive and gynecological health care services, plus any necessary follow-up services.

Continuity of care. If you are pregnant and in your second or third trimester when you join an HMO, or if you have a life-threatening, disabling or degenerative condition, the plan must allow you to continue using your out-of-network provider for up to 60 days after your enrollment. You get the same 60-day transition period if your provider is in the plan’s network, but decides to leave.

Consumer information. When you enroll, or upon request, plans must give you basic information about how their plans work and what services are covered. You will also get a handbook that clearly describes in detail what you need to do to get services.

Confidentiality of medical records. Managed care plans must ensure the confidential handling of your personal health care information. They must also allow you to see your medical records, and to copy them for reasonable fees.

Because of federal laws that prohibit the state from regulating certain types of employer-sponsored health benefit plans, not every person with health insurance in Vermont benefits from Rule 10 or other regulatory protections. If your employer’s plan is “self-insured” you will not necessarily have these protections.

The Division of Health Care Administration can give you detailed information and publications about Rule 10 and what to expect if you are insured by a managed care plan. It can also help you find out whether Rule 10 and other Vermont laws and regulations affect your health insurer. Call Consumer Assistance at 800-631-7788.

When you buy a health insurance policy, you will usually get several different documents, all of which work together. First of all, you will get a “contract.” (If you are one of the many Vermonters who get insurance through an employer, your employer gets the contract. You will be given a “certificate of coverage” instead). The contract or certificate is very important, since it describes in detail what kind of coverage you have. You may also get an “outline of coverage” which tells you about specific conditions that apply to your individual or group policy, like deductibles, co-payments and limits on certain types of services. You should also get a member handbook, which gives a more general description of how your plan works and what you must do to get health care.

The Insurance Contract

The insurance contract is the binding agreement between an insurance company and your employer or you. If your employer purchases group insurance, the insurance company must provide a certificate that summarizes the contract to each subscriber. You have the right to see the contract itself at your employer’s personnel office. If you buy your own insurance, you will get a copy of the contract directly from the company.

In looking at your contract and accompanying materials, you should pay special attention to the following sections:

The definitions. This section explains, as precisely as possible, the meanings intended for terms used in the policy. These definitions are the key to understanding the extent of coverage your policy provides.

Covered services. The policy may describe the covered services in one section, or may break them into several sections, such as “inpatient care,” “outpatient care” or “medical services,” “home care,” and “emergency care.” These sections explain exactly what services are covered.

Exclusions. This section details what is not covered by your policy under any circumstances.

Endorsements or amendments. An endorsement or amendment to your policy can add, remove or change the standard coverage described in the contract. Sometimes amendments or endorsements appear in the contract you receive, and sometimes the insurance company sends them to you separately. For example, if the law is changed to require coverage of a certain type of disease that is not covered by a policy, your insurer will send you an endorsement or amendment that becomes part of the policy you already have. Endorsements are subject to the other terms and conditions of your contract, like co-payments or deductibles and coinsurance.

Riders. A rider usually includes one or more new benefits that can be bought, at additional cost, to expand the services covered under your health insurance contract. An example of a rider includes coverage for prescription drugs, if they are not covered in your standard policy. Occasionally, a rider will reduce coverage, which may also reduce your premium.

Outline of coverage. This document or section of your contract details any particular conditions that apply to your coverage. It also explains how much you will have to pay for services. For example, it will tell you the amount of your deductible(s) or co-payment(s).

Your rights and obligations. The contract will usually include sections explaining your or your employer’s obligation to pay premiums to keep the policy in force. It will also tell you under what circumstances the contract may be canceled, and what rights you may have at that time.

Your health insurance policy will give you lots of information about what services your insurance company will cover. In most cases, the insurer will only cover medically necessary services, which means that the care must be consistent with generally accepted medical practices, as recognized by other health care providers in the same or similar medical specialty to diagnose, treat or manage specific medical conditions. The following is a summary of the coverage you should expect if you have a comprehensive health insurance policy. Please check your own policy for variations and further details.

• Inpatient care. This usually includes stays in a general hospital for short-term, acute care. Most policies do not pay for private-duty nurses, private rooms or non-medical items (such as television rentals).

• Medical services. These generally include the services of physicians and other health care providers (including specialists) for routine office visits, lab services, diagnostic procedures like x-rays and CT scans, maternity care, ambulatory surgery and emergency care.

• Mental health and substance abuse services. These services must be provided with the same types of deductibles or co-payments that are applied to other health care services. A health insurance policy cannot limit the number of visits you get for these services, or cap the amount of reimbursement for those services, unless the same visit limits or caps apply to all health services provided under the contract. Alcoholism is covered under substance abuse treatment.

• Certain types of chemotherapy treatments. Medically necessary growth cell stimulating factor injections that are part of a prescribed chemotherapy regimen must be covered.

• Coverage of disabled children, regardless of age, who cannot care for themselves. Policies generally must cover unmarried children who cannot care for themselves and who are dependent on the insured person for support.

• Coverage for newborn children for the first 31 days after their birth. Newborn children are automatically covered under your policy for the first 31 days of the newborn’s life if you already have coverage for other dependents. You must notify your insurance company within those 31 days, and pay any additional premiums due, in order to keep the coverage in place after those 31 days. If you have single coverage (that is, coverage for yourself only) and have a child, you must notify your insurance company and pay the premium necessary to add your child as a dependent within 31 days of the child’s birth. If you do so, the coverage is retroactive to the day the baby was born.

• Diabetes education and treatment. Treatment for diabetes must be covered subject to the same contract limits as other services provided under the health insurance contract (that is, subject to the same deductible, co-payments or coinsurance). The diabetes law applies to both insulin dependent and non-insulin dependent diabetics. In addition to requiring coverage for insulin, this law requires insurance companies to pay for diabetes-related equipment, supplies, education, training and nutrition therapy.

• Mammograms for women. Women aged 50 and older are covered for an annual mammogram. For women under age 50, mammograms are covered upon recommendation of their health care provider.

• Maternity care. Policies must cover the costs associated with maternity care. Maternity stay guidelines and newborn discharge guidelines are part of Vermont law to help providers and consumers understand their full coverage rights.

• Payment for PKU (an inherited metabolic disease) supplies and medication. Plans must pay for foods that are medically necessary for treating inherited metabolic disease at a minimum level of $2,500 per person per year.

• Craniofacial disorders. Plans must pay for medically necessary treatment of specific musculoskeletal disorders, including temporomandibular joint syndrome (TMJ).

Remember: Contracts are usually written in a very formal, legal way. If you have questions about whether a particular type of service is covered, you should call your health insurer’s member services department for more information. You can also call the Vermont Health Care Administration toll-free for Consumer Assistance at 800-631-7788.

TIP: Typical Exclusions

While every policy has different exclusions, the following is a list of typical services, treatments and conditions that health insurance policies often do not pay for:

Services that were not pre-authorized. If you are covered by an HMO, you may be required to get a referral from your primary care provider before getting certain types of services (usually specialty services). Even indemnity policies often require some type of “pre-authorization” (like a second opinion) before paying for certain services, like inpatient hospital care. If you fail to follow the required steps for either type of policy, your health insurer may refuse to pay for some or all of those services.

Services covered by another insurance policy. Policies usually exclude any health care services for which you received other types of insurance payments (for example, under a workers’ compensation policy, or another type of insurance policy, like your car insurance, that may cover the same services).

Cosmetic surgery. Most policies exclude payments for surgery that is primarily intended to improve your appearance, like a face lift or a “nose job.”

Dental care. Most health insurance policies do not pay for routine dental care services, including check-ups, filling cavities, treating gum disease, or fitting crowns or false teeth.

Experimental or investigational procedures. Most policies do not pay for procedures that are not yet accepted by the medical community as treatment for particular diseases or conditions. A plan’s decision not to pay for a treatment that it considers experimental or investigational can be appealed to an independent review organization for a final determination.

Your Responsibilities

You have certain responsibilities to make sure you keep your insurance coverage. These include the following:

• You must review and return your policy within 10 days (31 days for Medicare supplemental insurance) if you want to cancel it.

• You must follow your plan’s requirements for getting care. For example, if you are covered by an indemnity plan, this means notifying the company of a claim within the time period required by the policy. If you are covered by an HMO, PPO or POS plan, this usually means getting care from your primary care provider or getting referrals or prior authorizations before seeing specialists.

Claims Processing Tips

If you are insured through an HMO, you will rarely, if ever, see the actual bill for your health care services. Once you have paid your visit fee or co-payment at the doctor’s office or hospital, the rest of the billing is taken care of between the provider and the HMO themselves.

Insurance companies pay claims for indemnity-type policies differently. Most health care providers will submit claim forms directly to your insurance company for reimbursement. However, some providers may want to be paid by you, and then you are responsible for getting reimbursement from your insurance company. You will have to submit your copy of the hospital or physician claim form, together with any necessary supporting documentation, for approval by the company. Supporting documentation can include the doctor’s office notes, lab reports, or operative reports, depending upon what service was provided.

Once the insurance company receives the claim form, it reviews the claim and tells the provider what it will pay for the services. The insurance company also sends you, the insured, a form known as an “EOB” (“Explanation of Benefits”) that tells you the same thing about your claims.

It is very important for you to look at your EOBs and any doctors’ bills you get. You should make sure the services listed on an EOB match the services you received. If a service is not covered, or is only partially covered (if, for example, you have to pay a 20% coinsurance), the EOB will help you understand what you will be billed by the doctor or hospital after the insurance company pays its share.

TIP

If you have a question about what your insurance company has paid or denied, call its Member Services Department and ask for more information. That number should appear on your insurance ID card. it is also helpful to have your ID card in front of you when you talk to the company, as well as copies of your bills and the company's EOB's.

ANOTHER TIP

The insurance company cannot always explain your bill. If you have questions about the bill itself, call your doctor's or hospital's billing office, and ask them to explain the charges.

Frequently-Asked Questions

When is my insurance company allowed to stop coverage?

An insurance company can cancel your coverage under certain limited circumstances. These include:

• Failure by you (or your employer, if you get coverage through your job) to pay for the policy. Vermont law requires insurance companies to give you at least 14 days notice after the payment becomes due before they cancel a policy for non-payment.

• If you intentionally include wrong information on your application for insurance.

• If your employer offers you insurance, he or she can choose to cancel the group policy, although the employer must notify you of the cancellation (usually 30 days in advance). You can also lose your insurance policy if your employer no longer meets the rules that qualify it for a particular type of group policy.

• If your employer has been paying for your insurance, but goes bankrupt and fails to pay premiums.

• If your employer is no longer a member of an association through which you used to buy your insurance.

• If your employer fails to meet any participation or contribution requirements for group insurance.

Yes. Vermont is a “guaranteed issue” state. This means that you can change health plans without being denied coverage. However, your new insurer might limit the coverage you get for any “pre-existing conditions” you have. Before canceling any existing health insurance coverage, be sure to check with your current insurer and certificate to find out if you are required to maintain coverage for a specified length of time before you may cancel i

What are pre-existing condition clauses?

Under certain circumstances, an insurance company may refuse to cover illnesses or health problems discovered or treated in the six months before you bought coverage. Pre-existing condition exclusions are limited by law and cannot exceed 12 months from the date the policy is issued. In other words, even if the company refuses to cover you for a particular pre-existing condition, it may only do so for a maximum of one year. After that time, it must start covering you for treatments related to that illness or health problem.

By law, companies that sell individual insurance and small group policies cannot always impose these “pre-existing condition exclusions.” Please note:

• If you are buying individual insurance directly from the company, the new insurer must cover you for pre-existing conditions if you had at least nine months of continuous health coverage from another company, and it has not been more than 63 days since that coverage ended. If you switch individual policies or insurance companies, this applies only if your coverage stays substantially the same.

• If you are covered through a new small group plan paid through your employer, or if you lose small group coverage because you leave your job and then decide to buy individual coverage yourself, the new insurance company must cover you for your pre-existing conditions if you have had at least 9 months of continuous health insurance coverage, and it has been no more than 90 days since you had that insurance.

• If you had some prior health insurance coverage, but not the full 9 or 12 months required for the type of policy you are buying, you will get some “credit” for that coverage, although the insurer can still prohibit coverage for a pre-existing condition for some amount of time.

If you have never had insurance before buying a policy (whether directly or through your employer), you will probably have to wait between 6 and 12 months before the insurance company will cover any pre-existing health condition. If you have been covered by other insurance prior to your new coverage, your insurer may cover all your health problems as soon as you get your new policy, or at least within a shorter period than the usual 12 months exclusion period.

You should also know that under federal law, if you are covered by a group-sponsored health plan (both large and small group), pregnancy is never considered to be a pre-existing condition. That means if you are covered by a group policy, you should never be denied coverage for pregnancy-related services just because you bought a new insurance policy after you became pregnant.

Can my insurer raise my rates?

Health insurers cannot increase your rates simply because you use services, or your health status changes. However, insurers are permitted to raise premiums as overall costs increase. Insurance companies must get the Department’s approval before raising their rates, and must notify you before the increases take effect.

I get my insurance through my employer. What happens if I lose my job or if I die? Can I or my family continue my health coverage?

If you lose your job voluntarily or involuntarily (unless the job ended as a result of misconduct), Vermonters have the right to continue group health insurance coverage for themselves and their dependents for up to six months under the Vermont Continuation of Coverage Program.

The Vermont Continuation of Coverage Program is also available in the following circumstances:

• When a dependent child has reached the maximum dependent age (e.g. up to either their eighteenth or nineteenth birthday or up to twenty-five years old in the case of a full time student).

To continue group benefits under the Vermont Continuation of Coverage Program, the employee must have been covered for the three months preceding termination under the company’s health insurance plan. You will now have to pay the entire premium yourself.

Under federal law, COBRA allows continuation of group health coverage for employees or their families who lose coverage as a result of either a voluntary or involuntary termination of employment, reduced hours, death or divorce. It applies to companies that provide health plans for twenty or more people. The period of continuation of coverage may vary between eighteen and thirty-six months depending on your situation. If you choose to continue your coverage under COBRA, your employer can charge you an additional 2% on top of your premium as a processing charge.

At the end of the continuation of coverage period, you or your family may be offered a “conversion” plan by the insurance company. The new policy may be different than the one available under the company plan.

What happens if I am covered by another plan, or my spouse’s plan, in addition to my own group policy?

The purpose of coordinating benefits is to make sure that there is only one insurer who is responsible to pay the primary benefits, while the secondary carrier is responsible to pay deductibles or any remaining covered balances, subject to the terms and conditions of your health insurance policy. This process is described in the policy itself, and follows standards published by the National Association of Insurance Commissioners (NAIC).

How long are my children covered under my policy?

Dependent children are generally eligible for coverage until their eighteenth or nineteenth birthdays if they are not married. Employer health plans may also offer a student rider (see top of page 5) that generally extends coverage up to age 25 if they are full-time college students (taking at least 12 credits per semester).

What happens after my child turns 18 or 19, or stops going to college full-time?

When your child is no longer covered as a dependent on your employer-sponsored health policy, and your employer has more than 20 employees, generally he or she would have the right to continue that coverage for up to 36 months under COBRA.

If your child has been covered as a dependent on an employer-sponsored health policy with fewer than 20 employees, he or she has the right to continue that coverage for up to 6 months under the Vermont Continuation of Coverage Program.

In both situations, the premiums will be the responsibility of the child. At the end of the continuation period, the insurer may offer a conversion plan, which may provide different coverage than the policy provided through the employer plan.

What happens if my child has a disability? Will he lose his coverage when he turns 18 or 19?

Not necessarily. If a child was covered under the parents’ insurance prior to turning 18 or 19 years of age, and due to a disability is unable to support him or herself, the insurance company must continue covering the over-age child, as long as the parents remain his or her sole support because of the disability. The company can periodically ask you for proof that your child’s condition is ongoing, but no more than once a year. Information from a physician may be required.

I’m getting a divorce. What happens to my insurance? Can my children still be covered under my ex-spouse’s policy?

Divorce is considered a ‘qualifying event’ in terms of eligibility for continuation of group coverage if your ex-spouse’s employer has more than 20 employees and you have been covered through an employer-sponsored plan. In this case, you and your children can continue coverage through COBRA in the employer-sponsored plan for up to 18 or 36 months, depending on your situation. You will have to pay the premium yourself. After your group coverage ends, you then have the right to buy a policy directly from the insurance company, although the coverage may be different than the group’s plan. If you have group coverage through an employer with fewer than 20 employees in the health plan, you may extend your coverage for up to six months under the Vermont Continuation of Coverage Program. You will have to pay the premium yourself.

If you have group coverage through an employer with fewer than 20 employees in the health plan, you may extend your coverage for up to six months under the Vermont Continuation of Coverage Program. You will have to pay the premium yourself.

If your spouse bought a policy directly from the insurance company, rather than getting coverage through an employer, you will now have to buy insurance for yourself and your children in the same way. Under Vermont law, insurance companies that sell individual policies must accept anyone who wants to buy this insurance.

When you go to court, you should make sure that a section of your separation agreement or divorce decree clearly states which spouse is responsible for carrying insurance for the divorced spouse and any dependents, and who is responsible to pay for it. The agreement or decree should also clearly state who is responsible to pay for your out-of-pocket health insurance costs (deductibles, coinsurance or co-payments).

I have a new job with an employer who provides health insurance. But, I have been told that I will have to wait three months before I will be covered by the plan. Is this legal?

Yes. Some employers impose a “waiting period” before new employees are covered by their health insurance plans. The waiting period is usually one to three months, although it can be longer.

I only work part-time. Can I still get insurance through an employer-sponsored plan?

Yes. Employers have the option of including part-time employees (those who work 17 hours per week or more) in any health plans they provide their full-time employees. You should check with your employer directly to find out whether they will cover you.

My employer offers something called a “flexible spending account.” What is it, and how can it help me with my medical expenses?

A flexible spending account allows you to pay for certain medical services with pre-tax dollars. Those dollars can be used to pay for medical expenses not otherwise covered by your health insurance such as co-payments, prescription eyeglasses or dental work. Your employer, as part of a benefits package, may offer a flexible spending account. If you choose to set up such an account, you can ask your employer to withhold a specific amount of money each week from your paycheck and put it into the account. At the end of each year, your employer keeps any money from the account that you did not spend – so calculate carefully!

Please note that a flexible spending account is different than a Medical Savings Account (MSA) (see page 6) and is subject to different IRS regulations. Ask your employer or insurer for details.

Is my civil union partner entitled to health insurance coverage under my policy?

The insurance provisions of Vermont’s civil union law took effect on January 1, 2001. The civil union law applies only to Vermont-regulated health insurance plans; it does not govern federally regulated plans.

In the individual market, insurers subject to Vermont law are required to offer civil union couples and their families individual coverage equivalent to the coverage that they offer to married couples and their families. If you purchase family or two-person coverage in the individual market, you are entitled to family or two-person rates.

The answer is not as simple for employer-sponsored health insurance in the small group, large group, and self-insured markets. Certain public employers, such as Vermont state and local governments (but not the federal government), that offer health insurance to married couples and their families are required to provide the same health benefits to civil union couples.

Insurers in the small and large group markets are required to offer policies that include civil union coverage to employers, but it is employers that ultimately decide who is eligible to enroll in their plans.

Employers that offer self-insured plans governed by a federal law called ERISA (Employee Retirement Income Security Act of 1974) are not required to offer coverage to civil union partners, but they may do so if they choose.

If you think your insurance carrier is required to offer equivalent benefits and is not doing so, call the Division of Health Care Administration at 800-631-7788. If you think your employer is required to provide equivalent benefits and is not doing so, you can contact the Attorney General’s Office toll-free at 800-649-2424.

The Division of Health Care Administration provides toll-free access to Consumer Assistance to help people with health insurance questions and problems. You may call Consumer Assistance at 800-631-7788 during normal business hours, 7:45 a.m. to 4:30 p.m., Monday through Friday, except state and federal holidays.

I’ve heard that Vermont has a “Health Care Ombudsman.” Who is that, and how can the Ombudsman help me?

In Vermont, the Office of the Health Care Ombudsman was established to help consumers understand and use the health care system effectively. The Ombudsman’s office assists consumers in many ways. Like the Division, the Ombudsman offers information and educational materials about health insurance in general, but does not have regulatory authority. More importantly, it can help individuals file complaints against any health care insurer, as well as advocate on behalf of individual consumers in a variety of settings. The Ombudsman’s office can be reached toll-free at 800-917-7787 or 802-863-2316.

Who do I call if I have a question about my health insurance policy?

All health insurance companies have customer (or member) service departments that you can call with general questions about your policy, or if you have particular questions about the company’s decisions (for example, a denial of payment). Many problems can be resolved at this level, often during your initial telephone call. And if they can’t help you over the phone, they will explain to you exactly what you need to do to file a formal complaint.

Your insurance identification card should have the number of your insurer’s customer service department or check the yellow pages for assistance. The Vermont Health Care Administration also can provide telephone numbers of insurers’ service departments by calling Consumer Assistance at 800-631-7788.

I have tried calling the company’s customer service department and I am still not satisfied. What else can I do?

Every health insurance company in Vermont must, by law, allow you to file formal complaints for review by the company. Most companies request that you do this in writing, although, when necessary, they will accept complaints over the telephone. The timeframes for review and decision of an appeal are specified in your contract.

If your complaint relates to emergency services, urgently needed medical care or mental health or substance abuse services, insurers must respond more rapidly. Please refer to your contract or contact the insurance carrier.

Your doctor’s office or another representative of your choice can help you file complaints against an insurance company.

My insurance company still refuses to pay for my services, even after I’ve filed my complaint. Is there anyplace else I can go for help?

Vermont law allows certain types of health insurance decisions to be “appealed” to people outside of the insurance company. Appeals are allowed if the service you are requesting would be covered by your policy. Also, you can file an appeal only if you have exhausted the health insurer’s required internal review process. Please read your contract’s section on appeals or contact the health insurer for details.

If your complaint is about mental health or substance abuse services, you can appeal the plan’s denial to the state’s Independent Panel of Mental Health Providers, a committee of Vermont mental health and substance abuse professionals appointed by the Commissioner of the Department of Banking, Insurance, Securities and Health Care Administration. The Panel can reconsider and, in appropriate cases, reverse adverse decisions. It cannot, however, change the insurance contract between you and your insurer (for example, by requiring the insurer to pay for services not covered under the contract). To file an appeal, call the Division of Health Care Administration at 802-828-2900 or toll-free at 800-631-7788.

If your complaint is about physical health services (non-mental health or substance abuse services) you may file a request with the Division for consideration of a further appeal by an Independent Review Organization. To file this request for an appeal, call the Division of Health Care Administration at 802-828-2900 or toll-free at 800-828-7788.

If you are insured through Medicaid (including Dr. Dynasaur and VHAP), you have the right to a fair hearing before the Human Services Board. Call the Office of Vermont Health Access (OVHA) toll-free at 800-250-8427 to find out if your problem is eligible for this kind of review.

Glossary of Terms

Accident Insurance

An insurance policy that provides benefits for injury or sickness directly resulting from an accident. No benefits are paid for illness only.

Annual “Out-of-Pocket” Maximum

The most you will have to pay in any given year for all services received under an insurance policy. This amount includes co-payments, coinsurance and deductibles. If you exceed this amount, the insurance company will pay all other expenses for the remainder of that year.

Balance Billing

The portion of a provider’s charges for which the insured person is billed after the insurance company pays the “usual and customary” charges it deems appropriate for the services received (after the person has paid any applicable co-payment or coinsurance).

Certificate

The formal document received by an employee that describes the specific benefits covered by the policyholder’s health care contract with the insurer. The certificate contains co-payment and/or deductible requirements, specific coverage details, exclusions and the responsibilities of both the certificate holder and the insurance company.

This federal law allows employees (and their dependents) who had health insurance coverage through their employer to purchase and continue the coverage under certain circumstances for a limited period of time after the employment ends.

Coinsurance

An insured person’s share of the cost of services; most frequently part of an indemnity plan. Coinsurance is usually expressed in a percentage form, such as 20%.

Coordination of Benefits

A provision in a health insurance policy that applies when a person is covered under more than one group medical program. It requires the payment of benefits to be coordinated by all insurers who cover that person in order to eliminate over-insurance or duplication of benefits.

Co-payment

The set dollar amount an insured person is required to pay for each medical service received, or each doctor or hospital visit. Under a co-payment schedule, the insured pays only the co-payment for the service received; the health insurer pays the rest of the fees charged.

Deductible

The out-of-pocket dollar amount an insured must pay for health care services before the insurance policy begins to pay for services. A policy may contain a deductible that applies to each covered member and a limit on the total deductibles a family will pay.

Dental Insurance

A contract that reimburses an insured for some or all of the costs of caring for teeth, oral surgery, and gums; most benefits under a dental policy are for preventative or maintenance services.

Dependent

An individual – usually a child or a spouse – who relies on another person for support and who obtains health coverage through that person (usually a spouse, parent or grandparent).

Disability Insurance

A type of insurance that provides the policyholder with replacement income when he or she is unable to perform the major duties of his or her regular occupation, or an occupation for which the policyholder is qualified by reason of education, training or experience.

The federal law that mandates reporting and disclosure requirements for self-insured health plans. It also prohibits states from regulating insurance plans offered by employers to their employees if the employer is self-insured.

Exclusions

Specific conditions or circumstances listed in the policy for which the health insurer will not pay.

The statement sent to an insured by the health plan listing services provided, the amount billed, and the payment made.

Fee-for-Service

The traditional health care payment system (also known as “indemnity” insurance) under which physicians and other providers receive a payment that does not exceed their billed charge for each unit of service provided. Under a fee-for-service insurance plan, insureds usually may choose to go to any provider they want, as long as the provider is willing to accept the insurance company’s payments.

Grace Period

The period of time after a premium becomes due in which you can still pay for the insurance and keep it in force. Vermont law requires health insurers to give you at least 14 days’ notice before canceling a policy because you failed to make the payment by the regular due date.

Guaranteed Issue Policy

Small group and individual policies cannot be denied to any eligible Vermonter who wishes to purchase one.

Guaranteed Renewable Policy

A health insurance policy that continues in force and is renewed regularly as long as the premium is paid on time.

Individual Insurance

Health insurance bought directly by an individual not eligible for group coverage through an employer or association. Also called non-group coverage.

Lifetime Benefit Maximum

The total amount an insurance company will pay for health care services over your lifetime. If the cost of the benefits you receive since enrolling in a plan exceeds this amount, your coverage ends and no additional services will be covered.

Long-Term Care Insurance

This type of insurance is designed to help pay for some or all long term care costs, including care in a nursing home, adult day care facility or at home. Benefits are paid when the insured person needs assistance with activities of daily living, or when the insured person suffers from a cognitive impairment.

Mandated Benefits

Benefits that health insurance plans are required by state or federal law to provide to policyholders and eligible dependents.

Managed Care

Generally a health care delivery system that links doctors, hospitals and an insurance plan to deliver care to the plan’s members with the intent of improving quality and reducing costs. Health insurance can “manage care” in a number of ways, including requiring members to choose a primary care provider, to obtain the primary care provider’s permission to see a specialist and to use only providers with the plan’s network of providers.

Medicaid

A jointly funded state and federal program that provides health insurance to certain eligible people. Eligibility for Medicaid is based on income, requirements of special-needs children and other criteria.

Medicare

A federally funded health insurance program for people 65 years of age and older, certain younger disabled people and people with end stage renal disease.

Medicare Supplemental Insurance or Medigap

An insurance policy available to persons covered by Medicare that provides coverage for services or expenses not paid by Medicare such as deductibles or prescription drugs.

Network

The group of physicians, hospitals and other providers who contract with an insurance company to provide services to members of HMO, PPO or POS plans.

A provider, hospital, pharmacy or other facility is “in-network” when it has contractually accepted the health insurance company’s terms and conditions for payment of services.

Any provider, hospital, pharmacy or other facility that has not contracted with the health insurance plan to provide services to the plan’s members.

Outline of Coverage

The document given to each health plan member that summarizes the benefits, co-payment, coinsurance, deductibles and other requirements for obtaining services covered by the health plan that are listed in full detail in the contract.

Participating (“Par”) Provider

A provider who has agreed to accept a certain level of payment from an indemnity plan for treating the plan’s insureds. The provider may be a hospital, pharmacy, other facility or a physician who has contractually accepted the terms and conditions as set forth by the health plan. Insureds may not be required to use participating providers, but usually pay more if they do not.

Prior Authorization

The requirement of some health care plans that an insured obtain the plan’s approval for certain services before the service can be received and paid for by the company.

Pre-Existing Condition Exclusion

A contractual limitation or exclusion of benefits for pre-existing conditions. An illness, medical condition, or injury that has been diagnosed, or for which a person has been treated, before buying a new health care policy.

Premium

The amount paid to an insurance company in exchange for providing coverage for a specified period of time under a contract. Premiums are usually paid for a one-month period, but can be on an annual or quarterly basis.

The first health care provider a managed care plan’s member is required to contact when he or she needs health care services, usually a physician specializing in primary care services. The PCP is responsible for knowing the member’s complete medical history, performing routine health care duties, and referring the member to a specialist when necessary.

Reasonable and Customary Charge

Referral

An authorization given by a provider, usually a primary care provider, allowing a managed care plan member to seek care from a specialist.

Rider

Optional coverage for benefits not covered in a basic policy and purchased for an additional premium. Riders may contain co-payments or deductibles that differ from the base policy. Some of the more common riders cover prescription drugs and durable medical equipment.

Self-Insured Plan

A health insurance plan provided by an employer who assumes all of the financial risk of providing health insurance benefits to employees. The employer may contract the administration of its health insurance program to an insurer or third party administrator (TPA). Self-insured plans are exempt from regulation by state laws, but are subject to certain federal requirements under ERISA.

Student Rider

A rider that extends coverage for children beyond the usual age limit if the children are enrolled as full-time students. The rider will include the new age limit for coverage of the students.

Subscriber

The person responsible for payment of premiums or whose employment is the basis for eligibility for membership in a health plan.

Organizations that administer health benefits for an insurance company or self-insured employer plans. TPAs typically handle claim payments, underwriting, premium collection, case management, authorizations and customer service.

Usual and Customary Charge

A charge for health care based on the going rate in a certain geographic area for identical or similar services. This may also be referred to as “reasonable and customary charge” or “allowed price.”

Vermont Continuation of Coverage Program

A Vermont law that requires continuation of coverage for people who leave employer groups with 20 or fewer employees. This law requires employers to offer those employees the option to continue their group health care coverage for up to six months.

Waiting Period

Set periods of time that an employer may make a new employee wait before enrolling in the company’s health care plan. The health insurance policy cannot impose a waiting period, but the employer may.

GENERAL INFORMATION & ASSISTANCE

Vermont Division of Health Care Administration

Consumer assistance, appeals for denials of mental health and substance abuse services, and external appeals of service denials: 802-828-2900 or toll-free 800-631-7788

Office of Vermont Health Access (OVHA)
Medicaid program and eligibility questions, including Dr. Dynasaur and VHAP: 802-241-2880 or toll-free 800-250-8427