Frequently Asked Questions
How long does it take to enroll in a health insurance plan?
For permanent health insurance, the answer depends on the applicant's health and the insurance company to which the application is being submitted. Some health insurance companies may approve, within a few days, the application of a healthy young adult. However, for less healthy or older applicants, processing of an application can take a few weeks or more. Each circumstance is different. Consult your independent health insurance agent to get a realistic expectation. If you're in a hurry to get health insurance, be aware that applications for short-term or temporary health insurance are processed promptly. This kind of policy often can usually start the day following application submission.
Do I have to take a physical exam to get health insurance coverage?
The health insurance companies represented by MedPlan Access rarely require physical exams. The rare exceptions usually involve older applicants who have not recently consulted a physician.
Can my health insurance application be denied?
Yes it can. Whether an application is approved or denied primarily depends on the applicant's health. Contact a knowledgeable health insurance agent to get a realistic assessment regarding your own circumstance.
Can I pay less for health insurance if I bypass agents and deal directly with an insurance company?
No. Health Insurance rates are strictly regulated by the state. A health plan will cost the same whether you use an independent health insurance agent or deal directly with an insurance company.
Why should I use an independent health insurance agent?
Independent agents are not insurance company employees paid to sell the products of their employer. They're objective independent contractors who can survey the market and recommend the best health plan for you.
Must I pay a fee to an independent agent?
No. An independent health insurance agent is paid a commission by the health insurance company. No additional fees for the agent are added to your health insurance cost.
Will a new health insurance policy cover my pre-existing condition?
Most of the time the answer is no, but it depends on the insurance company and your individual circumstances. Some "individual" health insurers provide credit for having satisfied the pre-existing condition exclusion under a prior plan, but in Illinois and Indiana this isn't mandated.If you're thinking of switching health insurance policies, be sure you understand the implications regarding pre-existing condition coverage. Discuss this with your agent.
How do insurance companies define "pre-existing condition?"
Each insurance company has its own definition. However, the following wording is consistent with most health insurance policy provisions: "A pre-existing condition is a medical condition that would cause a normally prudent person to seek treatment during the twelve months prior to the beginning of coverage."
I have prior group health insurance coverage. Does this mean an "individual" health insurance company must accept my application and waive any pre-existing condition exclusions?
No. The prior group coverage doesn't matter in Illinois and in Indiana. A health insurance company can still deny your application or agree to insure you subject to extra limitations on the policy. However, if you are denied health insurance, you may be eligible to participate in your state's comprehensive "safety net" plan established for persons unable to obtain health insurance through the private market.
I'm pregnant. Can I obtain health insurance?
No. No "individual" health insurance company will agree to insure you while you're pregnant. However, group health insurance plans WILL accept new enrollees (employees or dependents) who are pregnant. So, if you're pregnant and have an opportunity to enroll in a group health insurance plan, do it.
Can I add dependents to my individual health insurance policy?
You can automatically add newborns, but anyone else will have to undergo an underwriting evaluation before the insurance company agrees to provide coverage.
What are my options if my health insurance application is denied?
You can try applying to another health insurance company. It's not unusual for a person to be rejected by one health insurer, but accepted by another. It depends on the health conditions at issue. A person in this circumstance should seek out the advice of a knowledgeable agent.If no health insurance company agrees to insure you, you may qualify for enrollment in your state's comprehensive "safety net" plan.
I'm overweight. Does it make a difference in my health insurance rates?
Yes. All Illinois and Indiana health insurers use their own height/weight tables to make rate determinations. People with "non-standard" height/weight ratios may be charged higher rates or refused coverage.
Can a health insurance company terminate my "individual" coverage?
Illinois and Indiana both provide strong consumer protection. In general, the insurance company can terminate your coverage for only the following reasons: Failure to make premium payment within the payment grace period
Material omission or misrepresentation on your health insurance application
The insurance company entirely withdraws from the individual health insurance business in your state.
How do I know if I can I keep my doctor under a new health insurance plan?
You should review the new plan's physician and hospital network before applying to the plan.
How long am I committed to keep any health insurance I purchase?
You can terminate the coverage whenever you want. Just inform the insurance company of your intentions. You may even get a refund for any excess premium you've paid.
What is short-term health insurance?
Short-term health insurance is designed to fill temporary gaps in your "permanent" health insurance coverage. These policies are relatively inexpensive and can go into effect very quickly. Most short-term plans last for no more than one year.
Should I get Health Savings Account (HSA)-compatible coverage?
Most people are better off wit HSAs. However, this is too big of a subject to handle in a paragraph or two.
Are there meaningful differences in how insurance companies underwrite health insurance applications?
Yes. For example, one insurance company assigns "preferred" rates to a 5'10" male who weighs 215 lbs. Another insurance company would assess an additional 40% charge for this person. One insurance company charges an additional 40% for smokers. Another charges an additional 25%. One insurance company turns down a man with hypertension. Another agrees to insure him. This is an area of health insurance where a quality agent makes a big difference.
What's the difference between an HMO and a PPO?
This is basically an academic question as HMOs are no longer much of an option for "individual" health insurance in Illinois and in Indiana. The main difference is that HMOs restrict your non-emergency health care coverage to a limited network of physicians and hospitals. On the other hand, PPOs provide varying benefits for services delivered by ANY licensed physician or hospital. There is a tradeoff in that HMOs usually provide more generous benefits.When Midwest HMO membership surged in the mid 80's, HMO rates were a lot lower than those of traditional health plans, but that isn't very true anymore.
Will my health insurance rates increase because I get older?
Yes. As people get older they tend to require more health care services, so health insurance companies have to charge higher rates for them. For example, the health insurance rate charged to a 50-year-old is typically more than twice the health insurance rate charged to a 25-year-old.
Is there an important difference between Blue Cross and Blue Shield and other health insurance companies?
Yes and No. Blue Cross and Blue Shield health insurance companies are a lot like other big health insurance companies, but they happen to be licensed by the Blue Cross and Blue Shield Association to use the Blue Cross and Blue Shield brand name. However, both Blue Cross Blue Shield of Illinois and Anthem (Indiana) Blue Cross and Blue Shield are financially powerful health insurers with the largest market share in their respective states. They both have great brand name recognition and make a lot of profit, which makes them a little more special than most other health insurers.
What is "durational rating" and can it effect me?
People don't actually ask this question much, but they should. Durational rating is a practice by which some health insurers charge higher rates to clients who have been policyholders for longer periods -- typically four or more years. Conversely, insurance companies that use durational rating charge lower rates for new customers. Most health insurance companies practice durational rating to varying degrees. They don't like to discuss it, because it involves the unfortunate phenomenon of less healthy people being charged higher rates because their health conditions leave them "stuck" with a particular insurance company. Only one of the primary health insurers we represent – UniCare – completely abstains from durational rating. Blue Cross Blue Shield of Illinois and Anthem (Indiana) Blue Cross and Blue Shield practice only moderate durational rating, and sometimes actually charge lower rates to longer-term policyholders. We consider these companies "safe" on the issue of durational rating. From our perspective, it's the smaller health insurance companies that tend to be the more meaningful practitioners of durational rating. Insurance companies can cite solid actuarial studies supporting the validity of durational rating. In addition, most people are not insured under an "individual" health insurance policy long enough for durational rating to have much of an impact. However, the health insurance industry is changing and we're seeing a shift from employer-sponsored health insurance to "individual" health insurance. More people are purchasing and keeping "individual" health insurance for longer durations. For the benefit of the less healthy consumer and in the interest of "spreading the risk" (Isn't that what insurance is about?), we'd like to see durational rating banned in Illinois and in Indiana.
Why are health insurance rates always increasing?
There are many factors in what seems to be a permanent rise in health insurance costs. Primary reasons include: General price inflation for medical services
The leveraging effect of fixed deductibles and co-payments – Insurance companies must adjust rates above the general inflation rate when total claim costs increase, but the portion paid by the insured person stays the same.
Cost-shifting – Providers make up for “shortfalls” in government-sponsored program revenue by shifting charges to the private sector.
Increases in health services utilization due to product promotion and improved diagnostic services
The availability and use of more expensive treatment and drug therapies
Government-mandated benefits and other legislative changes
Technological changes and their effect on the intensity of care
Why do group health insurance rates increase year after year?
There are many factors in what seems to be a permanent rise in health insurance costs. Primary causes include: General price inflation for medical services
The leveraging effect of fixed deductibles and co-payments – Insurance companies must adjust rates above the general inflation rate when total claim cost increase, but the portion paid by the insured person stays the same.
Cost-shifting – Providers make up for “shortfalls” in government-sponsored program revenue by shifting charges to the private sector.
Increases in health services utilization due to aging, product promotion and improved diagnostic services
The availability and use of more expensive treatment and drug therapies
Government-mandated benefits and other legislative changes
Technological changes and their effect on the intensity of care
What can an employer do to moderate group health insurance rate increases?
The basic things you can do are: Share more of the insurance premium cost with employees.
Choose medical plan designs that neutralize cost increase components by providing incentives for more cost effective plan usage, while channeling patients to the appropriate provider and treatment options. HSA-compatible plans are an example. Other examples are encouraging use of centers of excellence, disease/case management programs and eliminating fixed dollar co-pays.
Aggressively seek out more competitively-priced insurance companies.
Individual Health Management – Offer incentives to use preventive care and wellness services.
How many employees are required for group health insurance coverage?
At least two employees have to enroll, but you still have to meet the insurance company's employee participation requirement.
What percentage of employees have to enroll in the group health plan?
As a general rule, at least 75% of eligible full-time employees must either enroll in the plan or have other group coverage through their spouse. At least 50% of all eligible employees must actually enroll. No participation requirements apply to dependents.
Can part-time employees enroll in a group plan?
Most health insurance companies will insure only full-time employees (30 or more hours per week) under a small group plan.
When can an employee enroll in a group health plan?
New employees can enroll upon completion of the initial probationary period. Employees who don't enroll at that time must wait for open enrollment (usually the policy anniversary date) or a for a qualifying event.
When can dependents enroll in a group health plan?
An employee's dependents can enroll upon completion of the new hire probationary period. If dependents are not enrolled at that time, they must wait for open enrollment (usually the policy anniversary date) or a for a qualifying event.
When can a baby be enrolled in the group health plan?
A newborn baby can be added as of the birth date, but it's critically important that the insurance company be notified within 30 days. Otherwise, the employee may be stuck with the nursery bills and the baby's health insurance will have to wait until open enrollment or a qualifying event.
What is a "qualifying event?"
A qualifying event is an occurrence (such as death, termination of employment, divorce, etc.) that changes an employee's eligibility status under a group health plan. The term is frequently used in reference to COBRA eligibility, but it can also refer to an event enabling an active employee to make a coverage change at some time other than open enrollment.
How do insurance companies define "full-time" employee?
A full-time employee is generally defined as an employee working 30 or more hours per week.
How much of the group health premium does the employer have to pay?
As a general rule, the employer must fund at least 50% of the employee health insurance premium. The employer is not required to fund any portion of the dependent health insurance cost.
How long does it take to obtain group health insurance?
From the time application materials are submitted, expect at least a two or three week wait. However, it could take longer, depending on how much additional documentation the insurance company requests. If the application process takes less than two weeks, consider it a pleasant surprise. It helps if you work with an insurance broker who prepares complete paperwork and anticipates concerns and questions from the insurer’s underwriting department.
What documentation is required by the group health insurance company?
A primary concern of the health insurance company is validating that enrolling persons are actually full-time employees. In Indiana, the insurance company usually requests a copy of the UC-1 report submitted to the Indiana Department of Workforce Development. In Illinois, you'll typically need to provide a copy of the UI-3/40 form submitted to the State of Illinois Department of Employment Security. Start-up businesses may not be able to provide these reports. In such a circumstance, payroll records, check stubs or other employment confirmation documentation may meet the insurance company's requirements.
Will a replacement group health plan apply a pre-existing condition exclusion to employees?
Persons who have satisfied the prior plan's pre-existing condition exclusion should be credited likewise under the new plan. Persons who have partially satisfied the prior plan's pre-existing condition exclusion should have the same status under the replacement group plan.
If a business is offering group coverage for the first time, will pre-existing condition exclusions be applied?
Unless an employee or dependent has qualifying prior health insurance that has ended no more than 62 days prior to the effective date of the new group plan, that person will have to satisfy the full pre-existing condition exclusion waiting period.
Does group health insurance cost less than individual health insurance?
No. This is a common misconception. In the majority of circumstances, individual health insurance is a less costly option. However, individual health insurance policies have their disadvantages, such as declined applications, lesser benefits, maternity coverage gaps and expense deductibility issues.
How do insurance companies define "pre-existing condition?"
Each insurance company has its own definition. However, the following wording is consistent with most health insurance policy provisions: "A pre-existing condition is a medical condition that would cause a normally prudent person to seek treatment during the twelve months prior to the beginning of coverage."
Do different pre-existing condition exclusion rules apply to pregnancy coverage?
Yes. Under group plans, pregnancy is NOT subject to a pre-existing condition exclusion. This is federal law, which extends to new hires and their dependents.
Can a small group health insurance application be rejected?
The law states a group of 2-50 employees cannot be denied group health coverage for medical reasons. However, a small group application can be rejected if the organization does not meet the insurer's participation and employer contribution requirements.
To what size businesses does COBRA continuation apply?
Though its provisions may be adjusted from year to year, COBRA basically applies to employer groups that averaged 20 or more full-time employees during the previous calendar year.
Can any group of people organize to purchase group health insurance?
No. In the world of small group health insurance, an employee-employer relationship is needed.
Can independent contractors (1099 employees) be insured under a group health plan?
Most health insurance companies will agree to insure a limited number of independent contractors (1099 employees). These limits vary from insurance company to insurance company.
Can a small business reduce group health insurance cost through bypassing an agent and dealing directly with the insurance company?
No. Small group (2-50 employees) rates are strictly regulated by the state. In addition, group health insurance companies in Indiana and in Illinois are not organized to sell directly to small employers.
For how long am I committed to keep a group health insurance plan?
Though group health rates are set for twelve-month periods, the group can terminate coverage anytime during the policy year. If you want to switch to another group insurance company, you don't have to wait until your policy anniversary.
I own two small businesses. Can I insure them under a common plan?
In general, small group health insurers resist this -- particularly if the businesses have different federal tax ID numbers. However, if the businesses can be categorized as a controlled group of corporations under IRS section 414, you can combine them under a single small group policy.
If a group offers Health Savings Account (HSA) plans, must all employees enroll in the high-deductible HSA-compatible plan?
No. Many group health insurers have "combo" plans, providing employees a choice of traditional PPO or HSA-compatible coverage. These plans are available for groups with as few as two employees.