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Understanding Your Benefits

 

Confused about the terms used to describe your health benefits? You’re not alone! Recent studies suggest most consumers with health coverage don’t fully understand health insurance terminology.

Therefore, we created this page to describe, in every day language, the terms that are most important for you to know. This will help you take full advantage of this valuable benefit provided by your employer.

Please Note: These descriptions are offered as illustrations only and do not include all coverage information, including coverage limitations. You should consult your Summary Plan Description (SPD) for complete plan details. In the event of an inconsistency between the information on this site and the information contained in your SPD, the SPD will in all respects control and govern.

SUMMARY PLAN DESCRIPTION
PREFERRED PROVIDER ORGANIZATION (PPO)
CO-PAY
DEDUCTIBLE
         Calendar Year
         Hospital
         Emergency Room
CO-INSURANCE
OUT-OF-POCKET MAXIMUM
MEDICAL CLAIMS
         Procedures
         Payments
         Grievances
WELLNESS

 

  

SUMMARY PLAN DESCRIPTION (SPD)

Also referred to as a Benefit Booklet or a Plan Booklet. Most Trust SPDs have “YOUR BENEFITS” at the top of the cover or first page. The SPD describes the benefits available under your insurance plan. This is a very important document. It is the final authority on what benefits you have, what procedures are covered, and what your insurance will pay. Remember, if someone (including an insurance company representative) tells you something about your benefits that is different than what is described in the SPD, the SPD is always right and overrides anything else you may have been told.

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 PREFERRED PROVIDER ORGANIZATION (PPO)

Most employers within the IBA Group Insurance Trust offer a PPO insurance plan. A PPO Plan is the most popular form of health insurance. It simply means that your insurance company has contracted with a group of doctors, hospitals and other medical providers to provide their services at a reduced rate.

When you visit one of these providers you are staying in-network and are rewarded by receiving in-network benefits vs out-of-network benefits. In-network benefits typically have a lower co-pay, a lower deductible, a lower out-of-pocket maximum, or all three.

So, staying in-network saves you and your company money.

The networks used by your plan give you access to the top hospitals, doctors and specialists in the state of Indiana. Please note that your PPO plan DOES NOT require you to select a Primary Care Physician (PCP) or coordinate your care through a single doctor.

You may also from time to time hear the phrase HMO, or Health Maintenance Organization used in connection with health insurance. Your employer does not offer an HMO plan. An HMO is similar to a PPO plan, but typically has more restrictions relative to in-network benefits.

Who exactly is the insurance company?

When you’re in a PPO network, it’s sometimes difficult to understand exactly which company is the insurance company.

The IBA Group Insurance Trust has contracted with Anthem Blue Cross Blue Shield to provide medical insurance to its members. As the insurer, Anthem assumes the risk for the claims, meaning they pay the claims to the health care providers.

Your doctor or provider will also send your claim to Anthem.  Anthem will reprice the claim (apply its negotiated rate), inspect it to insure it is valid, apply any deductibles or co-insurance, and then pay the claim by cutting a check and sending it to your doctor.  Anthem will then send you an Explanation of Benefits (EOB) showing their discounted (negotiated) rate, the amount they have paid to the provider and any amount you may still owe.

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CO-PAY

Under certain plans, this is the amount you pay when you visit your doctor or a specialist. For example, if your co-pay is $20, you will pay $20 every time you go to the doctor’s office. However, that is all you will pay for the visit, which is a great benefit since the actual cost can range from $90 to over $200. There may be additional charges if the doctor performs tests (such as blood work) or other procedures while you are at his or her office. These charges will typically be subject to a deductible and paid according to the terms of your policy.

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DEDUCTIBLE

Calendar Year Deductible (See also: Hospital Deductible)

Similar to auto or homeowner’s insurance, a deductible is the amount you pay for a covered charge before the insurance company pays. The deductible amount is specified in your SPD and it resets (you start paying it over again) every calendar year.

If you are in a PPO plan, there are certain charges that don’t apply to your deductible. For instance, if you are in a plan where you pay a co-pay for a physician visit, then all you pay is the co-pay when you see your doctor – there is no deductible. Also, if you’re in a prescription drug plan where you pay a co-pay every time you fill a prescription, then all you pay is the co-pay and no deductible. In both of these examples, the amount you paid in co-pays does not apply toward your annual deductible.

If you are in a High Deductible Health Plan (HDHP), the deductible applies to all medical and prescription drug costs - there are no co-pays.  However, you still benefit from Anthem's PPO and prescription drug networks by paying their negotiated rates, which are normally  substantially lower than the provider's or drug company's customary charge.

There are also certain services that may be exempt from a deductible. For example, in some plans if you use an independent laboratory to have Lab work performed (such as blood draws and analysis) you will not pay a deductible for those services.  There are also certain preventative or wellness services that may be exempt from a deductible in both PPO and HDHP plans. Please Note: these examples are used simply for illustrative purposes. You should consult your SPD for a description of your deductible and what charges apply to that deductible.

Always pay close attention to in and out-of-network benefits since your deductible may be higher if you use an out-of-network provider.

Here is an example of how a deductible works:

  • Your insurance coverage includes a $20 co-pay and a $200 calendar year deductible.
  • You visit your doctor and he or she performs minor surgery (such as removing a precancerous mole) while you are in the office.
  • This is your first doctor visit of the year and nothing has been applied to your deductible.

The doctor bills the following:

Office Visit: $ 100

Minor Surgery: $ 300

Total: $ 400

You pay the following:

Office Visit: $ 20 (co-pay)

Minor Surgery: $ 200 (deductible)
Total: $ 220

The remaining $180 will be covered by your insurance company according to your policy terms.


If you visit the doctor a second time that year and have the same procedure performed, you will pay a co-pay and the entire $300 will be covered by insurance (subject to policy terms) since you’ve already met your deductible for this year.


What About Family Coverage?

Deductibles can get more complicated when you have family coverage. Your insurance will have one of two types of family deductibles:

1. A single family deductible (one deductible for the whole family), or
2. An individual and a family deductible

The single family deductible is the easiest to understand. In this case, your family and the medical charges they incur are looked at as one. The family deductible is applied against all of these charges, and once it is met (by either one person or everyone in your family) the remaining charges are covered by insurance, subject to policy terms.

For example, you have a single family calendar year deductible of $1,500. Each family member incurs covered charges that apply to your deductible in the following order.

CHARGES

TOTAL APPLY TO DEDUCTIBLE APPLY TO INSURANCE
1st Charge: You$ 800$ 800$   0
2nd Charge: Spouse$ 200$ 200$   0
3rd Charge: Son$ 600$ 500$ 100
4th Charge: Daughter$ 400$   0$ 400
Total$2,000$1,500$500

You pay the first $1,500 of these charges as your deductible and the insurance company covers the remaining $600 subject to policy terms and co-insurance.

If you have an individual and family deductible, then the insurance company tracks the deductible separately for each individual in your family. Once an individual meets his or her deductible, any additional expenses (for that individual only) will be covered by insurance subject to policy terms. These individual deductibles are also combined into a family deductible. However, the amount applied to the family deductible by each individual can not exceed the individual deductible amount.

For example, you have a family calendar year deductible of $1,500 with individual deductibles of $500. Each family member incurs covered charges that apply to your deductible in the following order.

CHARGES

TOTAL APPLY TO DEDUCTIBLE APPLY TO INSURANCE
1st Charge: You$ 800$ 500$ 300
2nd Charge: Spouse$ 200$ 200$   0
3rd Charge: Son$ 600$ 500$ 100
4th Charge: Daughter$ 400$ 300$ 100
Total$2,000$1,500$500

Although the deductibles are tracked individually, the most you will pay in deductibles is the family limit of $1,500. In this example, since the family deductible has now been met, any more covered expenses incurred by this family will be covered by insurance, subject to policy terms. This is true even if the spouse (who has not met the individual deductible) incurs the next expense.

The advantage to this type of arrangement is that charges may be applied toward your insurance faster than under a single family deductible. For example, consider that if only you and your spouse incurred covered charges in the above example for a total of $1,000, this would have all been applied to your deductible under the single family deductible. However, with an individual AND family deductible, only $700 would have applied to your deductible and the rest covered by insurance subject to policy term


  

Hospital Deductible (See Also: Calendar Year Deductible)

In addition to a calendar year deductible, your health plan may also have a Hospital Deductible. There are two types of Hospital Deductibles. Your plan may include one or both of these types.

In-Patient Deductible

This is an additional deductible you will pay if you are admitted to the hospital. For example, if your in-patient deductible is $300, you will pay the first $300 of covered hospital charges. Covered charges above that will then be applied to your calendar year deductible. Once that is met, covered charges will be paid by insurance subject to policy terms.

This is NOT only paid one time each calendar year. It is incurred each time you are admitted to the hospital. In addition, the amount paid toward the in-patient deductible does not apply toward your calendar year deductible. HOWEVER, it does apply toward your out-of-pocket maximum.

The lesson here is to opt for out-patient procedures where practical and as recommended by your doctor to avoid paying this deductible.

Emergency Room Deductible

This is an additional deductible you will pay when you visit the emergency room. For example, if your emergency room deductible is $200, you will pay the first $200 of emergency room charges. Covered charges above that will then be applied to your calendar year deductible. Once that is met, covered charges will be paid by insurance subject to policy terms.

Similar to the in-patient deductible, it is not based on a calendar year and is incurred each time you visit the emergency room. However, this deductible will not be charged if you are admitted to the hospital during your visit to the emergency room.

The idea is to encourage you to only use the emergency room for emergencies. You can almost think of this deductible as the co-pay you will pay to visit an emergency room physician. All in all, your health (and your pocket book) is best served by establishing a physician-patient relationship with a Primary Care Physician or Internist, and seeing them for most common illnesses, such as flu and viruses.

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CO-INSURANCE

Co-insurance is usually expressed as a percentage, for example 70%. This indicates the percentage of a covered charge that your insurance company will pay after your deductible is met. In this example, they will pay 70% of the charge and you will pay 30%. This is also sometimes expressed as: 70/30 co-insurance.

Here is an example of how co-insurance works:

Your insurance coverage includes a $20 co-pay, a $200 deductible and 70/30 co-insurance.
You visit your doctor and he or she performs minor surgery (such as removing a precancerous mole) while you are in the office. This is your first doctor visit of the year and nothing has been applied to your deductible.

The doctor bills the following:

Office Visit: $ 100

Minor Surgery: $ 300

Total: $ 400

You pay the following:

Office Visit: $ 20 (co-pay)

Minor Surgery: $ 200 (deductible)
Co-Insurance: $ 30 (30% of remaining $100 charge)
Total: $ 220
 

 

If you visit the doctor a second time that year and have the same procedure performed, you will pay a $20 co-pay and $90 in co-insurance (30% of the $300 charge) since you’ve already met your deductible for this year.


 

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OUT-OF-POCKET LIMIT (OOP)

This is the most you will pay in any given benefit period for covered medical expenses.  The OOP includes all deductibles and/or co-payments/coinsurance you incur in a benefit period except for non-network human organ and tissue transplant co-payments/coinsurance.  Once you reach the OOP, your insurance pays 100% of covered charges (subject to policy terms) incurred for the remainder of the benefit period in which the OOP was reached. At the beginning of the next benefit period, the amount applied toward your OOP goes back to $0 and you start all over again.

Here is an example of an out-of-pocket maximum

Your insurance coverage includes a $300 calendar year deductible, a $200 in-patient hospital deductible, 70/30 co-insurance and a $2,000 OOP. You are admitted to the hospital where you incur $8,000 in covered charges. These are your first medical charges of the year and nothing has been applied to your deductible.

For the first $5,500 of charges you pay:

  $ 200 Deductible
+ $ 300 Calendar Year Deductible
+ $ 1,500 Co-Insurance*
* 30% 0f the $5,000 charge left after your Deductibles

Your $2,000 OOP maximum has now been reached

For the remaining $2,500 in charges you pay: $ 0 (subject to policy terms)


What About Family Coverage?

If you have family coverage, you will typically have a family OOP. Unlike deductibles, a family OOP will never have an individual OOP. The family OOP will be higher than an individual OOP, and it accumulates charges incurred by all family members. Once this maximum is reached, covered charges will be paid at 100% (subject to policy terms) for all family members, except for co-pays.

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MEDICAL CLAIMS

Procedures

The insurance company must receive written notice that covered services have been given to you. The notice must be given to them within 90 days of receiving the covered services, and must have the data they need to determine benefits. If the notice submitted does not include data sufficient to process the claim, then the necessary data must be submitted within specified time frames or no benefits will be payable except as otherwise required by law.
 
If the insurance company does receive the information they need to process a claim, they will ask for the additional information necessary to complete the claim. You will receive a copy of that request for additional information, for your information. In those cases, the insurance company cannot complete the processing of the claim until the additional information requested has been received. They will make their request for additional information within 30 days of their initial receipt of the claim and will complete processing of the claim within 15 days after their receipt of all requested information. An expense is considered incurred on the date the service or supply was given. If the insurance company is unable to complete processing of the claim because you or your provider fail to provide the additional information within 60 days of the request, the claim will be denied and you will be financially responsible for the claim.

Failure to give the insurance company notice within 90 days will not reduce any benefit if you show that the notice was given as soon as reasonably possible. No notice of an initial claim, nor additional information on a claim can be submitted later than one year after the 90 day filing period ends, and no request for an adjustment of a claim can be submitted later than 24 months after the claim has been paid.

Claim forms will usually be available from most providers. If forms are not available, either send a written request for claim forms to the insurance company, or contact customer service and ask for claim forms to be sent to you. The form will be sent to you within 15 days. If you do not receive the claim forms, written notice of services rendered may be submitted to the insurance company without the claim form. The same information that would be given on the claim form must be included in the written notice of claim. This includes:

  • Name of patient
  • Patient’s relationship with the Subscriber
  • Identification number
  • Date, type, and place of service
  • Your signature and the Provider’s signature

  

Medical Claim Payments

State law requires claims submitted by a provider be paid or denied within 30 days of receipt of an electronic clean claim (i.e., the claim contains all of the information the insurer needs to make a decision) or within 45 days of a clean claim filed by paper.  If the submitted claim is not a clean claim, the insurer must notify the provider within 30 days for an electronic claim and 45 days for a paper claim what further documentation is required.

  

Grievances  

To obtain information on grievance procedures or to file a grievance orally, call the toll free customer service number listed on the back of your plan identification card.  A plan representative who is knowledgeable about the grievance procedures and any applicable state laws and regulations will be available to assist you at least 40 normal business hours per week.

You can also call 1-800-408-5372 at any time to leave a voice mail message concerning a grievance.  Any messages you leave though the toll-free number will be returned on the following business day by a qualified plan representative. 

If you wish to file your grievance in writing, mail it to:

Anthem Appeals
P.O. Box 33200
Louisville, KY  40232-3200
ATTN: Appeals Specialist

Or, you can send a written grievance via facsimile to:
1-317-287-5968 

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WELLNESS

Your plan may offer a number of wellness benefits, including:

An annual on-site Health Screening
Educational programs for individuals at risk for serious health problems
Wellness Campaigns and Information
Access to online health and wellness information

If available, these services are offered to you at no charge. This is a tremendous benefit that can have a lasting impact on your health and wellbeing.

Please also visit: Why Participate in Wellness

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