SECTION II: HEALTH PLANS
1 - Do I Have to Have Health Insurance?
Yes. Massachusetts has something called an "individual mandate." Under this law, if you live in Massachusetts and are age 18 or older you must have health insurance by July 1, 2007. By January 1, 2009, your health insurance must have certain basic benefits, called "minimum creditable coverage."
Until January 1, 2009, any health plan that can be legally sold in Massachusetts meets the "individual mandate." However, on January 1, 2009, the standards go up. To meet the rules by 2009, you will need a health plan that meets these "minimum creditable coverage" standards:
- Covers prescription drugs (may have deductible of up to $250 per individual/$500 per family
- Covers regular doctor visits and check-ups before any deductible
- Caps the annual deductible at $2,000 for an individual or $4,000 for a family
- If you have a deductible or co-insurance on core services, caps out-of-pocket spending for health services at $5,000 for an individual or $10,000 for a family each year
- Does not cap total benefits for a sickness or for each year; and,
- Does not cap spending for a day in the hospital.
Also, any of the plans listed below will meet the minimum coverage standards for 2009:
- A Young Adult Health Plan offered through the Health Connector
- A High Deductible Health Plan that meets federal requirements for a Health Savings Account
- A Commonwealth Care Health Insurance Plan
- A Qualifying Student Health Insurance Plan
- A Medicare plan
- A Medicaid plan
- A Tricare plan
- A medical care program of the Indian Health Service or of a tribal organization;
- A state health benefits risk pool
- A health plan offered under 5 U.S.C. 8
- A public health plan as defined in federal regulations authorized by the Public Health Service Act, section 2701(c)(I)(I), as amended by Public Law 104-191
- A health benefit plan under the Peace Corps Act
- Any other qualifying coverage required by the Health Insurance Portability and Accountability Act of 1996, as it is amended.
If your religion does not allow you to heave health insurance, you can file a sworn statement with your Massachusetts income tax return.
If you cannot afford health insurance that meets the standards, you can contact the Commonwealth Health Connector (The Connector) for a waiver. You can go to the Connector website at www.mahealthconnector.org for information and look at the Affordability Tool to help you decide if you might be able to get a waiver. If you get a waiver, you will not pay a penalty for being uninsured.
If you do not have health insurance by December 31, 2007, you will lose your personal income tax exemption for 2007. That exemption gives an individual a Massachusetts tax savings of around $219. In 2008, the penalty will go up. Starting in the 2008 tax year, the penalty will equal half of the cost of the lowest-priced plan available to you for each month that you don't have coverage.
2 - How Do I Get Coverage in a Health Plan?
To meet the individual mandate and protect yourself from high health care costs, you will want to join a health plan. If you work, your employer or union may offer a choice of one or more health plans as an employee benefit. If your employer does not help you pay for a heath plan, you may be able to buy one through The Connector. The Connector is a state agency that offers health plans to individuals and small groups. You can also go directly to one of the companies that sell health plans to individuals in Massachusetts. You might also be able to get lower cost insurance through the state if you meet income and other eligibility rules.
If your employer or union offers a health plan, you will probably want to join that plan. Many employers pay part of the premium and may offer more choices than you could get on your own. If you do get your plan through your employer or union, they will choose the plans that they offer to you and they will buy the plan from the company. You can then choose the health plan that is best for you from the choices offered by your employer or union.
Beginning July 1, 2007, employers that buy health insurance must allow every eligible full-time employee to join any health plan that the employer offers. If the employer pays for a part of the premium, the insurance company must make sure that the employer does not pay more of the premium for higher paid employees than it does for other employees.
Large Employer Groups
Many employers (those with over 50 eligible employees) do not buy insured health plans from insurance companies. Instead they pay for health services from their own self-funded accounts. Although these employers may use insurance companies to process claims and handle other administrative tasks, the insurance companies are only Third Party Administrators. These are called "self-funded" plans. They are not considered to be insured plans and federal law exempts them from state law. To know if the state laws apply to your plan, you should ask your employer if your plan is self-funded.
Other large employers do buy insured health plans from insurance companies. These plans must follow all state insurance laws. This includes mandated benefits, eligibility rules and continuation of coverage protections. If the large group buys the health plan in Massachusetts, the plan must follow Massachusetts insurance laws. However, a large group may buy the health plan in another state as part of their national plan and they would then follow the laws of that state.
Small Employer Groups
Many employers with between 1 and 50 eligible employees include a health plan as part of the employee benefits package. In Massachusetts, sole proprietors are considered to be small employers and can buy the same small group health plans available to other small employers.
All small group plans in Massachusetts are "guaranteed issue" and "guaranteed renewable." This means that a company cannot turn down your application or refuse to renew your plan based on the amount or cost of services that you have used or may use. The company can only refuse to offer or renew a plan for certain reasons such as fraud or non-payment of premiums.
Directly from Carrier or Intermediary
You may buy a health plan directly from an insurance company. Some companies require you to go through an intermediary. An intermediary is an entity that handles the enrollment and premium collection for the company. Insurance companies must offer the same health plans to individuals that they offer to small groups. If you are eligible for Medicare, you may buy a Medicare Supplement plan or Medicare Advantage plan directly from a company that offers that type of plan.
Through the Connector
If you do not work for an employer that pays at least 33% of your health plan premium, you can buy coverage from the Connector. These special plans are called "Commonwealth Choice."
If your family income is less than 300% of the federal poverty level, you may be able to buy a "Commonwealth Care" plan from the Connector. Massachusetts helps pay for the Commonwealth Care premiums. This means that you pay a smaller premium or none at all, depending on your income.
If you are between the ages of 19 and 26, and are not eligible for subsidized coverage from your job, the Connector offers a Young Adult Benefit Plan for Massachusetts residents.
Go to www.mahealthconnector.org or call 1-877-623-6765 to learn more about all of these Connector plans.
Qualified Student Health Insurance Plans (QSHIP)
If you are enrolled as a student in a Massachusetts college or university, you can buy a special health plan directly from your school. This Qualified Student Health Insurance Plan (QSHIP) is designed for students and is only available while you are an enrolled student. Keep in mind that you must have insurance if you are enrolled at least ¾ of the time in a Massachusetts college or university. This is true whether or not you consider yourself a Massachusetts resident. You are not eligible for Commonwealth Care if you are required to purchase a QSHIP or have coverage as a student.
Government Health Benefit Plans
MassHealth is a Medicaid program paid for by state and federal taxes for eligible persons. Please go to http://www.mass.gov/eohhs/gov/departments/masshealth/ or call 1-800-841-2900 to learn more about MassHealth.
If you are over 65, or if you have a certain type of disability, you may be eligible for Medicare. To learn more about Medicare eligibility and benefits, call the Social Security Administration at 1-800-772-1213 or visit your local Social Security Office. TTY users may call 1-800-325-0778.
Other Government Health Plans
The state and federal government provide lower cost health coverage for certain people through public health programs. This includes the Indian Health Services, Peace Corps, CommonHealth, HealthyStart and other programs. Please call 1-800-841-2900 to learn more about these programs.
3 - What Are the Types of Health Plans?
Many different types of health plans are sold in Massachusetts. This guide only tells you about health plans that offer comprehensive hospital and medical care coverage. The sections below will explain how these plans work.
Traditional Health Benefit Plans
Traditional health plans pay some of the cost of medical treatment. They may differ in the services covered and the providers offered in the network.
Medical/Indemnity Plans (Open Choice or Open Network Plans)
These plans usually cover hospital and medical expenses for an accident or illness. They may also cover preventive care. These plans may only cover a fixed percentage of any covered cost. For example, the policy may say that the plan pays 80% of a service and you must pay the other 20%. With these plans, you are covered for any licensed health providers.
Health Maintenance Organizations (Closed Network Plans)
These plans cover hospital, medical and preventive care. You are only covered if you get your care through a network of providers, except in the case of an emergency. With most HMO plans you pay a flat dollar copayment for covered services. However, some HMO plans also have deductibles, coinsurance and benefit limits.
Preferred Provider Plans (Different Levels of Benefits from Preferred Providers)
These plans usually cover hospital, medical and preventive care. PPOs have a network of preferred providers, but they also cover services for out-of-network providers. The benefits covered for preferred providers are usually more than the benefits for out-of-network providers.
4 - What is Covered in a Health Plan?
Your insurance company or your employer will give you an "evidence of coverage" certificate that tells you about your benefits. You may receive this certificate directly from the insurer, through your job, or through the internet. Not all health plans are the same, so you should read your certificate carefully. In order to get all of the coverage available to you, you should know your benefits and the procedures you must follow.
It is important that you read your policy carefully so that you know the benefits and services that are covered under your plan. You should also know what benefits and services are excluded from coverage. Massachusetts law requires that certain benefits be covered by all plans. However, all other services are only covered if they are specifically listed as a benefit in your plan certificate.
Until January 1, 2009, all health plans that can be legally sold in Massachusetts meet the individual mandate. On January 1, 2009, the rules change. To meet the rules for the individual mandate in 2009, you will need a health plan that meets all of the standards shown on page 6.
In addition, any high-deductible health plan that allows you to have a federal Health Savings Account also satisfies the individual mandate.
Health plans may have limits that apply when you first join the plan. Some plans have a pre-existing condition limit or a waiting period during which the enrollee is only covered for emergency treatment. According to Massachusetts law, insured plans may not have a pre-existing condition limitation of more than six-months. They may not have a waiting period of more than four-months. Also, if you were covered by another health plan before you joined and you did not have more than 63 days between plans, the time that you were in the other plan may reduce or eliminate the pre-existing condition limit or waiting period.
Keep in mind that even when your plan covers a service, you must still pay any cost-sharing. This means that you must pay for any deductibles, coinsurance or copayments that are part of your health benefit plan.
Also, some plans pay benefits only up to the "usual and customary" charge of the provider. This means that if the plan will not pay more than what is usually charged by other providers for the same service in that area.
If you have a health plan that covers dependents, you may keep your dependents on the plan until:
- Two years after the last year in which you (or your ex-spouse) claimed the dependent on your federal income tax return, or
- The dependent's 26 th birthday
Newborn infants are covered on a family plan from the moment of birth. You must be sure to follow your insurance company's rules to add the newborn infant to the plan within 30 days of birth.
Continuation of Coverage
You may have the right to continue your group health plan when you no longer qualify for coverage through your employer. Some of the ways you can do this are:
You may choose to continue your group health plan under federal COBRA or state continuation of coverage laws. Depending on the reason that you no longer qualify for your former employer's health plan, you can keep that health plan temporarily after the date your coverage ends. However, you will probably need to pay as much as 102% or more of the premium.
If you do not choose COBRA, or if your COBRA coverage ends, you have a state-mandated 90-day eligibility period for continued coverage in the event of a plant closing or partial plant closing, as determined by the Commissioner of the Department of Labor and Workforce Development. This provision does not apply to HMO plans.
Involuntary Layoff or Death
If you do not choose COBRA, you have a state-mandated 39-week eligibility period for continued coverage if you become ineligible for continued participation in a group plan because of involuntary layoff or death of the subscriber. Coverage is for up to thirty-nine weeks from the date of the ineligibility or until the subscriber, spouse and dependents become eligible for benefits under another group health plan, whichever comes first. However, you will probably need to pay the premium that the employer pays to the insurance company. This provision does not apply to HMO plans.
If you do not choose COBRA, a divorced spouse must be allowed to stay on the health plan without additional premium, unless the divorce judgment has other terms. The divorced spouse can stay on the plan until the remarriage of either the subscriber or the spouse, or until a time provided by the divorce judgment, whichever is earlier. If the subscriber remarries, the former spouse has the right to stay on the health plan on a rider to the family plan or through an individual plan. Either of these options may require additional premium rates.
Other Ways to Continue Coverage
Although you may be able to continue your group coverage in one of the ways shown above, in Massachusetts, you can also join a plan from one of the companies offering individual plans or through the Connector.
5 - How Do I Use a Health Plan?
Massachusetts has certain protections for you if you have a managed care plan. Your health plan is a managed care plan if it has a network of providers or if it uses any "utilization review."
HMOs (Health Maintenance Organizations), PPOs (Preferred Provider Plans) and POSs (Point-of-Service Plans) are all managed care plans that use a network of providers. In an HMO plan, non-emergency care is covered only when it is provided or arranged by a network provider. In a PPO or POS plan, the plan covers medically necessary care from any health care provider, but usually pays more for services provided within the network.
Health plans use "utilization review" to decide if a service is necessary according to their medical standards. If they decide that a service is not medically necessary, the plan may deny or reduce payments. For some health plans, this medical necessity decision is made before treatment. For other health plans, the decision is made when the company gets a bill from the provider.
If your insurance company decides that a service is not medically necessary, they must tell you in writing. This letter must tell you the reasons for their decision. They must also tell you that you have the right to file a grievance with them. If you file a grievance and they continue to deny coverage, you may appeal the decision to the Commonwealth of Massachusetts Office of Patient Protection.
Internal Grievance Protections
A managed care plan must allow you to file a grievance whenever they determine that a service is not medically necessary. You may file the grievance by calling, writing or faxing the grievance to the company. The company must send you a notice within fifteen days acknowledging receipt of the grievance. They must resolve the grievance within 30 business days - unless you agree to an extension. They must send you a written resolution of the grievance within 30 business days.
External Review Protections
If you get a denial of your internal grievance, you have the right to file for an external review with the Office of Patient Protection (OPP). When the insurance company sends you the denial letter, they should also send forms that you can submit to the OPP. The OPP will arrange for an independent external review within 45 days. You may also get these forms by calling the OPP. To learn more, call 1-800-436-7757 or go to the OPP website at http://www.mass.gov/dph/opp.
6 - What Are the Costs of Health Plans?
When you choose a health plan, you need to understand the entire cost of your coverage. You will probably need to pay all or part of the premium. You may also have "cost sharing". Cost sharing means that you pay for part of the cost of a service covered by your health plan. You need to understand both the cost of the premium and the amount of any cost-sharing you may expect over the next year.
The insurance company that offers your health plan sets the premiums that you must pay for the plan. You might not pay the full premium yourself - many employers pay at least some of the premium for their employees. The insurance company sets the premiums according to different rules depending on whether the health plan is offered to a large group, a small group or an individual. Insurance companies in Massachusetts may not set premiums based on the number or cost of any services that you personally have used in the past or are expected to use in the future. However, the number and cost of services that your group or a class of groups has used may be used as a factor in setting premiums.
Most health plans in Massachusetts only cover some of the cost of care and include "cost-sharing" features. Cost-sharing means that the insurance company pays for part of the cost of a health service and you pay the rest. Some of the cost-sharing features you may have in your health benefit plan include:
A copayment is a fixed dollar amount paid by you directly to a doctor, hospital, pharmacy or other health care provider at the time that you get a service. For example, you may pay $20 toward a covered office visit and the plan pays the rest. A plan may have different copayments for different types of services. For example, the copayment for a primary care visit may be $20 and the copayment for an emergency room visit may be $100.
A deductible is a dollar amount that you must pay before the health plan starts to pay for a covered service. Some health plans may have a separate prescription drug deductible. The deductible amount does not include the premiums that you pay. For example, you may pay a $1,000 deductible toward your health care services each year before the plan pays any benefits. A health plan may have a deductible for a calendar year (from January 1 to December 31) or for a plan year (from the policy effective date to one year later.) If your plan has a deductible, be sure to know the time period.
Coinsurance is a percentage of the allowed charge that you will pay for a covered service after any copayments. For example, you may pay 20% of the cost of a covered office visit and the plan pays the rest.
Some plans have a limit on the visits or dollars allowed for a specific covered service. For example, the plan may allow only $350 for a scalp hair prosthesis (wig) and you will pay for any cost beyond the $350 limit.
Exclusions are listed services for which there is no benefit. For example, the company may exclude (not pay for) cosmetic surgery and you will pay for the entire cost of the service.
An out-of-pocket maximum is a cap on your cost sharing for a year. Once your cost share amounts have equaled the out-of-pocket maximum, the health plan will pay 100% of the covered services for the rest of that year.
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