Scarborough Insurance Agency

Frequently Asked Questions

HMOs
PPOs
Full-Time College Student on Parent’s Plan
Returning Policy
Birthday Rule
Information Requested (Individual Medical)
COBRA
Cal-COBRA
Tonik
HSAs

What are HMOs (Health Maintenance Organizations)?
HMOs are an alternative to commercial insurance that stresses preventive care, early diagnosis and treatment on an outpatient basis. HMOs are licensed by the state to provide care for enrollees by contracting with specific health care providers to provide specified benefits. Many HMOs require enrollees to see a particular primary care physician (PCP) who will refer them to a specialist if deemed necessary.

What are PPOs (Preferred Provider Organizations)?
PPO plans allow you to choose a doctor or hospital from a list of “preferred” providers in order to receive full benefits. If you go to a doctor or hospital that is not on the list, the plan may cover a smaller percentage or none of your costs. Check with the insurance carrier BEFORE you use the plan to make certain your physician or hospital is a contracting provider. Make certain your doctor refers you to other providers who are on the list, or who the carrier agrees to pay at the “preferred” rate.

My child is a Full-time College student. Will my health insurance plan cover them?
Most medical plans cover full-time college students under their parent’s group medical plan until the child turns age 24, regardless of whether or not they live at home. Read your policy carefully to understand how your particular insurance company handles full-time college students and to what age they are covered. If your plan is an HMO and your child's college is far from home, accessing an approved provider may prove difficult. As an alternative, consider purchasing health insurance coverage through your child's college. Many colleges and universities offer low-cost health insurance for students. Cost and level of coverage vary greatly from one school to the next, but school-subsidized health insurance is often less expensive than continuing coverage through your existing health plan. Since health care is typically provided on-campus, it may be easier for the student to access.

Can I return my policy?
Yes. If you are accepted for individual coverage by an insurer, you have a "free look" or review period which varies from 10 to 30 days. If you decide you do not want the policy, return it by certified mail within the required period of time and request a full refund of the premium paid. Employer group plans do not have a "free look" period.

What is the Birthday Rule?
When both spouses have health insurance that covers their children, the birthday rule applies. The birthday rule helps insurance companies coordinate benefits, assuring that a medical bill is not reimbursed for more than 100% of the actual cost of a claim. To prevent this, insurance companies typically designate one parent's health insurance plan as the primary plan and the other as the secondary plan. (That's why the patient questionnaire at your doctor's office asks for information on primary and secondary coverage.) The primary plan is responsible for paying covered expenses up to the limits of the policy. If any unpaid costs are left over, the secondary coverage kicks in. The birthday rule is often used to determine which plan is primary and which is secondary. Under this rule, the plan of the parent whose birthday occurs first in the calendar year is designated as primary. The date of birth is the determining factor, not the year. So it does not matter which spouse is older. Like most rules, the birthday rule has exceptions: If both parents share the same birthday, the parent who has been covered by his or her plan longest provides the primary coverage for the children. If one spouse is currently employed and has health insurance through a current employer, and the other spouse has coverage through a former employer (e.g., through COBRA), the plan belonging to the currently employed spouse would be primary. In the event of divorce or separation, the plan of the parent with custody generally provides primary coverage. If the custodial parent remarries, the new spouse's coverage becomes secondary. Read your policy carefully to make sure you understand how your insurance company handles dual coverage.

When I apply for Individual insurance, what information will the insurance carrier request?
Insurance carriers screen applicants for individual health insurance; so you will be asked to complete an application and answer questions on your medical history. If your information is incomplete or inaccurate regarding health history or age, the company may deny benefits or rescind your coverage. Companies frequently ask physicians for medical records and may require you to take additional physical exams or blood tests. However, they cannot ask you for an HIV test, except for disability income and life insurance. People with anything serious in their medical background may be charged a higher price for coverage or may denied health insurance coverage at any price.

What is COBRA Continuation Health Coverage?
COBRA is an extension of medical insurance benefits for terminated employees and their dependants. For a thorough explanation of COBRA continuation health visit the U.S. Department of Labor’s COBRA webpage.

What is Cal-COBRA Continuation Health Coverage?
Cal-COBRA extends COBRA-like benefits (i.e. continuation of coverage) to employees and dependent spouses and children of firms of less than 20 employees. For further information, visit the Cal-COBRA Highlights webpage.

What is Tonik?
Tonik Health was created by the largest health insurance company in California. TONIK is a brand name referring to Blue Cross of California’s Individual health plans specifically designed to appeal to and service the active lifestyle needs of nineteen to twenty-nine year olds.

How much does Blue Cross’ Tonik Cost?
That varies based on your zip code and age. Click on get an instant Tonik Health Quote If you have previous medical conditions you may be asked to pay a little more.

Do you have to be younger than 29 to qualify for TONIK?
No, while TONIK is marketed towards young adults between the ages of 19-29, anyone under 65 can apply and be accepted.

How long will it take me to be approved for TONIK?
If Blue Cross of California requests additional information in order to review your medical history, it will take a little longer. Otherwise, most of our TONIK applicants, without a previous health conditions, are approved in just one day.

What are the three TONIK plans and how are they different?
The three TONIK plans are the "Thrill Seeker”, the "Part-Time Daredevil” and the "Calculated Risk Taker.”

How do I Apply for Tonik?
Either contact a Sales Associate or apply on-line.

What is an HSA?
Health Savings Accounts (HSAs) are tax-advantaged personal savings accounts that may be established in combination with HSA eligible high-deductible health plans. HSAs were approved with the passage of the Medicare Prescription Drug, Improvement and Modernization Act of December 31, 2003. HSAs are available to all market segments, including individual and family plans, and small, midsize and large groups. Almost everyone with an HSA-eligible high-deductible health plan can get an HSA. Funds in HSAs may be accumulated over the years and may be distributed on a tax-free basis to pay for, or reimburse, qualified medical expenses. The remaining covered medical expenses are then paid as indicated by the has-eligible high-deductible health plan. Clients should be advised to contact their financial or tax advisors for more detailed information on HSAs, including information about how to establish a new HSA or how to replace an existing MSA.

Who can establish an HSA?
Individuals or eligible employees can establish an HSA if they: are covered by an HSA-eligible high-deductible health plan on the first day of the month that they establish the HSA. Could not be eligible for Medicare benefits but do not have Medicare coverage are not listed as a dependent on another individual's tax return. Individuals or eligible employees cannot establish an HSA if they are covered by a health plan that doesn't qualify as an HSA-eligible high-deductible health plan, except for permitted insurance.

What advantages do HSAs have over Medical Savings Accounts (MSAs)?
HSAs are portable. HSA-eligible high-deductible health plans have lower deductible requirements and higher out-of-pocket limits than MSAs, making the accounts more flexible and accessible than MSAs. HSAs, unlike MSAs, may be offered as part of an employer's "cafeteria" plan. HSA tax-deductible contribution limits are greater than those for MSAs. An employer and employee are both permitted to contribute to an HSA in the same year (unlike MSAs where either the employer or employee may make contributions in the same year, but not both). "Catch-up" contributions are allowed for HSAs for people between the ages of 55 and 65 (starting at $500 per year in 2004).

What is an HSA-eligible high-deductible health plan?
To qualify as an HSA-eligible high-deductible health plan a plan must satisfy certain requirements with respect to deductibles and out-of-pocket maximums. See the table below for specific requirements. Individual At least $1,000 Not to exceed $5,000 Family At least $2,000 (Deductible applied to the family as a whole - family must incur covered medical expenses in excess of $2,000, or minimum family deductible if higher, before plan benefits are paid to any member of the family)

Who may contribute to an HSA?
HSAs are open to almost everyone with an HSA-eligible high-deductible health plan. Eligible and qualified individuals, employees and employers may contribute to an HSA. In addition, contributions can be made by others on behalf of the individual covered by the HSA-eligible high-deductible health plan with the contributions deductible by the covered individual (May 15, 2004, Treasury Guideline).

What are the limits for contribution to HSAs?
According to the Treasury/IRS guideline dated May 15, 2004, "Annual HSA contribution limits in 2004 are the lesser of: 100% of the deductible amount on the accompanying high-deductible health plan; or $2,600 for self-only accounts and $5,150 for family accounts (these dollar amounts will be indexed for inflation in future years)." The amount is also reduced by any contribution to an existing Archer MSA.

What are the limits for contribution to HSAs?
Visit the U.S. government HSA webpage.