Walczak Associates
Self-Employment Information

This page is designed to help the self-employed business owner, with no other employees in his or her company, to understand the terminology found on the self-employment grid. Plans found on the grid are health insurance plans available for those who can qualify (see "Qualifications for Joining Associations," below). The advantage to enrolling with one of these plans is that you obtain a group rate by joining an association. This rate is not otherwise available to the self-employed from the insurance carriers.

PLAN: Each plan design provides health insurance with the specific named insurance carrier and is administrated by a specific association. You would need to join the association and pay its annual fee. Rates change on the association's renewal date.

TYPE: Refers to the type of plan you are selecting. Seven plan types exist: HMO, POS, EPO, HMO-Open Access, PPO, POS-Open Access, and Indemnity. EPO and HMO-Open Access function similarly to each other as does PPO and POS-Open Access and are listed together below:
    HMO: Provides in-network coverage only. Must use participating HMO providers to receive benefits. All care is authorized by the PCP (Primary Care Physician).

    POS: Provides both in and out-of-network coverage. You can either select to use the plan like an HMO (in-network) or go out of the network. When you choose to go out of the network, you become subject to a yearly deductible plus the co-insurance - a percentage reimbursement from the carrier. Both deductible and co-insurance are subject to the UCR, (usual, customary and reasonable).

    EPO: (HMO-Open Access) Provides in-network coverage only. No referral is needed to see an in-network specialist.

    PPO: (POS-Open Access) Provides in and out-of-network coverage. No referral is needed to see an in-network specialist. You can choose to go out of the network (see POS above).

    INDEMNITY:The covered person pays 100% of all covered charges up to an annual deductible. The health benefits plan than pays a percentage of allowed charges.
COPAY: A predetermined fee paid at time of service usually for a doctor visit.

HOSPITAL: The cost for your in-network, referred hospital stay. This cost is a per confinement charge if you are admitted into the hospital.

ER: Emergency room charge (waived if you are admitted to the hospital).

RX: Prescription: (i.e., $10/15/30NF) $10 generic, $15 brand, $30 non-formulary. Non-formulary means that the drug is not on the carrier's list, but it can be obtained by paying the higher fee. Some plans have a yearly deductible and other plans have a maximum allowance on prescriptions.

DENTAL: Plans have a fee schedule. Carrier dentists must be used.

DED Deductible: (POS/PPO/INDEMNITY only) the calendar year deductible you must meet before the insurance carrier provides any reimbursement for out-of-network services. Based upon UCR.
CO-INS: (POS/PPO/INDEMNITY only) Percentage paid by the insurance carrier after the yearly deductible has been met for out-of-network services. Payment is based upon UCR.

OOP Out-of-Pocket: (POS/PPO only) your out-of-network costs before the insurance company pays 100% of claims for out-of-network services. Payment is based upon UCR.

UCR: Usual, customary and reasonable: (POS/PPO only) the higher the UCR (80th percentile = average, 70th percentile = below average), the greater the likelihood of claims being paid in full. UCR applies to the deductible, co-insurance and out-of-pocket portions of insurance plans. When insurance carriers pay claims, they determine if the bill conforms to the UCR for the geographic location in which the services were rendered.


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