Frequently Asked Questions > Individual & Group Health

Individual & Group Health FAQs

Q. My Health insurance plan has a deductible, what does that mean?

A deductible is a fixed dollar amount during the benefit period (usually each calendar year) that you the insured must pay before the insurer starts to make payments for covered medical services. Many Health plans have per individual as well as family deductibles. Some plans also have separate deductibles for specific services such as hospitalization and/or prescriptions drugs.

Q. What is coinsurance and how does it work?

A: Coinsurance is a form of medical cost sharing in Health insurance plans that requires an insured person to pay a stated percentage of medical expenses after the deductible amount (if any) has been paid.

Q. What is an H.S.A.?  

A: Health Savings Account (H.S.A.) is a checking/savings account that works in conjunction with a Qualified High Deductible Health Plan (QHDHP) to help pay the deductible on the QHDHP.  Money put into the H.S.A. account is pre-tax (Federal only in California).  Money can be used for Medical, Dental, Vision and prescription and over the counter Pharmacy expenses. Annual Funding limits apply.

Q. Who can have an H.S.A.?

A: An H.S.A. is available for anyone with a QHDHP, as long as you don't have other health coverage as well (Individual, Group, Medicare, Medi-cal, or other government-sponsored plans).  An account cannot be opened for someone that is declared as a dependent on someone else's income taxes (a child, for example).

Q. How can I use the money in my H.S.A.?

A: Money in your Health Savings Account can be used for expenses listed under the IRS Publication 502.  As a general rule, money can be used to pay for expenses incurred for medical, dental or vision services. Funds can also be used to pay certain insurance premiums (COBRA, Long Term Care, Medicare Part B), but cannot be used to pay premiums for an Individual Health plan or to reimburse for contributions toward Employer-sponsored coverage.  Please consult with your tax professional if you have questions on allowable expenses.  Money used for ineligible expenses are subject to tax and penalties.  Money deposited into the Health Savings Account can only be used for eligible expenses incurred AFTER the account is opened.

Q. Who can put money into my H.S.A?

A: Contributions into a Health Savings Account can be made by the Accountholder, an Employer, or both.  It is important to remember that there are annual contribution maximums, and the total of all contributions cannot exceed that amount.  Special ‘Catch-up' provisions are available providing additional funding allowances for members who are 55 or over.

Q. Who are Eligible Employees?

A: An Eligible Employee is one that works 30 hours or more per week (considered Full-time).  An Employer can also offer coverage to Part-time Employees (15 – 29 hours per week or 20 – 29 hours per week options available).  Owners working 20 or more hours per week are considered to be an Eligible Employee.

Q. What is a Legitimate Waiver?

A: Based on underwriting requirements, all Eligible Employees must participate in the Employer- Sponsored plan unless they have a “Legitimate Waiver”.  Legitimate Waivers are as follows:  Covered under Spouse's Employer-Sponsored health plan, Covered under Medicare, Covered under Medi-cal, or covered under any government sponsored programs.

Q. What is a Preexisting Condition?

A: Preexisting Condition means an illness, injury, disease, or physical condition for which medical advice, diagnosis, care or treatment, including the use of Prescription Drugs, was recommended or received from a licensed health practitioner during the six (6) months immediately preceding the earlier of: the first day of the waiting period (applicable to newly hired employees) or the date the Insured's coverage is effective. 

Q. What is Creditable Coverage, and how does it work?

A: Creditable Coverage is any individual or group plan that provides medical, hospital and surgical coverage, including continuation or conversion coverage, or coverage under a publicly sponsored program such as CHAMPUS, Indian health Service or tribal organization medical coverage, Peace Corps medical coverage, a state health benefits risk pool, Medicare or Medicaid.  Creditable Coverage does not include accident only, credit, disability income, Medicare Supplement, long-term care insurance, dental, vision, workers' compensation insurance, automobile insurance, no-fault insurance, or any medical coverage designed to supplement other private or governmental plans.

•  The Preexisting Condition period will be reduced if you were covered under Creditable Coverage, and within not more than sixty-two (62) days of termination of that coverage, you became eligible and applied for coverage under the Policy, the time spent under Creditable Coverage will be used to satisfy, or partially satisfy, the six (6) month period.

•  The six (6) month period will also be reduced if an Insured's employment has ended, the availability of health coverage offered through employment or sponsored by an Employer has terminated, or an Employer's contribution towards health coverage has terminated, provided the Certificate holder becomes eligible for health coverage offered through employment or sponsored by an Employer within 180 days of termination of the Creditable Coverage and applies for coverage within thirty (30) days of becoming eligible for coverage under the Policy.