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 FUNDAMENTALS OF GROUP HEALTH COVERAGE
It used to be there were only two certainties in the world -- death and taxes. A third certainty has been added to the equation -- the spiraling costs of medical services. When seeking employment, especially if you are the sole or primary provider of a family, an employer's health care benefits package can sometimes be just as important as the wages the employer is willing to pay. Some employers pay the full amount of the cost of group health coverage for an employee while other employers only pay a part of the cost. Very few employers pay for dependent coverage. Large employers often offer employees choices between what are known as HMO coverage plans (Health Maintenance Organization) and PPO coverage plans (Preferred Provider) for employees. Each has its attractive and not so attractive sides for you the insured. What follows is a general description of both types of group health coverage. Because there are so many different group health coverage plans on the market, this is intended as only general information and your plan must be consulted to determine the exact details of your coverage.
An HMO can take the form of either an institution (such as Kaiser) or a medical group set up to accept HMO insureds through an HMO program. An HMO offers the comfort of knowing that all hospitalization, physician and prescription charges will be absorbed by the HMO with only a relatively small co-pay expected from the insured. The size of co-pay depends upon the particular HMO and the provider. When services are provided by an HMO physician or HMO operated facility, the co-pay is generally minimal. As an example, a visit to a Kaiser facility for services or with a Kaiser clinic health care provider usually requires only a minimal co-pay. However, the same services obtained on emergency basis at a private facility that is contracted with Kaiser to provide emergency services may require a larger co-pay. A second advantage of an HMO is that there is generally no "pre-existing condition" limitation on the coverage provided to the insured. This can be particularly important to an insured who has a long-standing disease process such as diabetes or rheumatoid arthritis that requires ongoing medical care.
The downside of an HMO is that the medical services are controlled by a "gatekeeper." In an institutional HMO, all medical services must be approved by the institutional physician unless there is a true emergency. Referrals to outside contract providers is at the discretion of the institutional physician. The same function is provided by the primary care physician of a group that accepts an HMO plan. Unfortunately, repeated news stories bear witness to the fact that HMO's often offer incentives to primary care physicians to keep down the cost of providing health care to HMO insureds. The economic bottom line can and often does interfere with health care decision making, usually to the detriment of the HMO insured.
A PPO allows an insured considerably more input in the decision making regarding health care services. The PPO insured usually has a wide range of participating physicians from which to choose for services. Likewise, there is usually a wide range of participating facilities that allow the insured choices for therapy, diagnostic studies and even hospitalization. Referrals for medical services are not controlled by a "gatekeeper," and are usually at the discretion of the PPO insured.
Now for the bad news about PPO's. Enrollment in a PPO is almost always more expensive than an HMO. In addition to a co-pay, often stated as a percentage of the allowed health care charge, the PPO may have a deductible which the insured must meet before receiving any benefits under the insurance plan. This means that the first several hundred to several thousand dollars of medical expenses may come straight out-of-pocket of the PPO insured. Additionally, if the insured obtains health care treatment from a nonparticipating provider, the co-pay percentage is usually significantly higher than if the insured had obtained the same health care treatment from a participating provider.
If you are employed in the private sector, the group health coverage provided through your employment will usually be subject to ERISA regulations. ERISA provides for specific procedures to be followed if you believe that health care benefits are not being provided to you by your plan whether it is HMO or PPO. You must follow the specific administrative review procedures of your plan to obtain reconsideration of a decision to refuse requested medical care. The plan will provide the specific steps that you need to take, and your employer must provide you with access to the plan so that you can follow these steps. Large employers will provide each employee with a plan description booklet that will provide this as well as other useful information about the benefits available under the plan. If you are employed in the public sector, the group health coverage provided by your employment will not be subject to ERISA regulations. However, most public sector group health plans provide a means short of litigation for an insured to obtain reconsideration of a decision to refuse requested medical care.
Whether your group health coverage plan is HMO, PPO, subject to ERISA rules or not governed by ERISA, it will, without fail, have a reimbursement provision. This means that if someone else causes the injuries for which you are obtaining treatment, and you seek a recovery of monetary damages from that other person for the injuries, your group health plan will expect you to reimburse the plan for any medical expenses paid for by the plan and caused by the person from whom you are seeking monetary damages. The language of your plan may actually make any payment made by the plan for medical services caused by another person an "advance payment" on your behalf rather than an insurance payment by your group health coverage. In either event, the fact is that your recovery of monetary damages may be subject to repayment to your group health coverage plan of monies paid for medical services provided to you.
Your group health coverage provides a means for payment for medical attention regardless of how the incident that caused your injury to occur. If you are injured as a result of someone else's fault, you should always immediately seek the medical attention necessary to help you recover. Some people think that they should not be forced to involve their own insurance coverage if an injury is the fault of another person. As a result, they may delay treatment. All this will do is guarantee that you will remain injured for a longer period of time. If the person who caused your injury has insurance, that insurance will rarely pay for your immediate health care treatment. Obtain the medical services that you need with your own group health coverage (or your medical payments coverage if you are involved in a motor vehicle accident and have medical payments coverage on your auto policy); the responsibility of the other person to pay for your damages can be sorted out at a later date.
For additional assistance, please contact the Group Law Service at 661-325-3425.
The information contained in the Chain-Younger Web Site is general in nature and is not intended as a substitute for legal advice. In addition, an
Attorney-Client relationship is not created by viewing this information.
Changes in the law or the specific facts of your case may result in legal
interpretations that are different from those presented. To protect your
legal rights following severe injury or wrongful death resulting from an
accident, it is wise to immediately consult Chain-Younger.
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