A group health insurance plan allows companies to offer employees a more cost-effective way to pay for health care expenses. The premiums employees will pay under a group plan are typically less expensive than those of individual plans, providing a cost-savings all around and an enticing employee benefit. When enrolled in a group plan, the insurance company pays a portion of the medical costs incurred. What services are covered and the percentage of the costs that the insurance company pays, however, vary from plan to plan. Here is an overview of group coverage basics.
What Group Coverage Includes
A group health plan covers a wide variety of medical services and equipment, including:
- Wellness Services
- Sick Visits
- Outpatient Care
- Emergency Services
- Maternity and Newborn Care
- Pediatric Services
- Long Term Treatments
- Mental Health Services
- Substance Abuse Services
- Rehabilitative Services
- Laboratory Services
- Many Preventive Screenings (blood pressure, diabetes testing, mammograms, cancer screenings)
- Durable Medical Equipment (crutches, orthotics and diabetic supplies)
Group Coverage Limits
Under current federal law, lifetime and annual limits on most health care benefits are prohibited. Plans can, however, put an annual and lifetime limit on spending for health care services that are not deemed essential. In New Jersey, the lifetime limit is “unlimited”, meaning they will pay out, after the cost share deductibles and coinsurance, as much as is needed within and maximum.
There are also coverage limits based on the type and location of services. For example, the allowable coverage amount for a service or procedure in a hospital may vary from the same procedure or service performed in a doctor’s office, and can vary from provider to provider.
Group Limitations and Exclusions
Every health care plan has coverage limitations and exclusions. There are certain services and items for which the insurance company will limit the amount paid or simply not cover at all – regardless of open enrollment. Some of the most common limited or excluded areas include cosmetic surgeries, alternative medicine, home care and private nursing, in-patient rehabilitation, out-patient rehabilitation, chiropractic care, dental care, and vision care. It is important that you carefully review all limitations and exclusions when selecting your insurance plan so that you won’t be caught off-guard.
There is a wide variation in terms of how insurance companies cover prescription drugs. Just because you have prescription coverage doesn’t mean that the prescription you wish to take is covered. Each insurance carrier has a formulary list of prescriptions unique to their products. These formulary lists are finite lists of medications they will cover, and health insurers are allowed to develop these lists and adjust them as needed. Prescription lists are typically divided into tiers based on price. There are also restrictions on how covered medications can be dispensed, such as prior authorization, dosage being consistent with FDA regulations, and step therapy which requires you try a less expensive drug before approving coverage for a more expensive option.
Combing through what is and is not covered in a group health insurance plan can be overwhelming. It is beneficial to speak with a health insurance broker who can guide you through and discuss plans tailored to your needs. We are here to help do just that.