Employee Benefit Resource Center: Articles

Open Enrollment: Why It's Your Only Chance to Make Changes

The benefits offered to you are controlled by the contracts your employer maintains with insurance providers. These contracts contain, among other things, eligibility provisions, waiting periods, and enrollment provisions. The enrollment provisions in insurance contracts are fairly standard for all employers and conform to federal and state laws regulating the insurance carriers. Generally, those enrollment provisions allow you to choose your insurance benefits only at new hire, open enrollment, and under certain circumstances according to federal law.

The Health Insurance Portability and Accountability Act of 1996 (HIPAA) allows you to make certain changes in your medical coverage during the year. For instance, if your spouse changes jobs and does not meet his or her new employer’s eligibility provisions for medical insurance, then your spouse has a "special enrollment right" under your employer’s medical insurance policy. This means that you may add your spouse to your medical coverage within 30 days of losing his or her medical coverage. Your spouse will remain covered under your medical insurance until the next open enrollment period. HIPAA does not apply to any insurance coverage other than medical insurance.

You may also make mid-year changes in your health coverage that are consistent with "changes in family status." For example, if you become legally divorced during the year, you may drop coverage for your spouse within 30 days of becoming divorced. Likewise, if you marry or have a child during the year, you may add your spouse or child within 30 days of the marriage or birth.

In summary, outside of the events discussed above, open enrollment is your only opportunity to make changes in your insurance coverage.

HIPAA: What Is It?

The Health Insurance Portability and Accountability Act (HIPAA) of 1996 created valuable protection for many people, including those with pre-existing conditions. If you change your job, lose your job or become self-employed, HIPAA allows you easier access to health coverage and prohibits discrimination against employees and dependents based on health status. HIPAA allows prior coverage from one health plan to be used to reduce or eliminate pre-existing condition exclusion periods if you move to a new plan. It also allows you to purchase individual coverage on a guaranteed basis, provided you have been continuously covered for 18 months. HIPAA does not apply to all coverages; for instance, it does not cover dental or vision insurance. If you’d like to learn more about HIPAA and how it effects you, contact your benefit department.

Making the Most of Your HMO or POS Plan

For those of you who participate in either an HMO (Health Maintenance Organization) or a POS (Point of Service) plan, do you now how to use it? It’s really quite easy. If you participate in an HMO, you have one option - to coordinate all care through your primary physician. By participating in an HMO, you are allowing your primary care physician to direct your medical care. Therefore, it is vitally important to develop a relationship with your primary care physician. If you are one of the many people who has picked your primary care physician out of a directory but has never met that physician, you may experience problems when trying to use your insurance. If you try to seek out medical attention, the hospital, urgent care facility or specialist that you are trying to see will ask you who your primary care physician is and if you were referred. If not, they will call your primary care physician to verify that you are a patient. If you have never met your primary care physician, he or she will not be able to prescribe care or issue a referral on your behalf. In order to direct coverage for you, your physician must know you and your medical history. Therefore, when you choose a new primary care physician out of directory, the burden is on you, as the patient, to set up an introductory appointment. Doing so will make a tremendous difference in your ability to use your insurance when you really need it.

If you participate in a POS plan, you have two choices. A POS plan is a hybrid of an HMO and Preferred Provider Plan (PPO). It allows you to direct you coverage and seek medical attention both inside and outside of the HMO network. If you use the plan like an HMO, you will need to follow the HMO rules as previously stated. You will receive all of the same benefits that an HMO participant receives - low co-pays, no claims forms, a high level of benefit payments, no deductibles, and so on. In addition, you have the option of seeking care outside of the HMO network if you are willing to pay a little more money out of your pocket. When you use your out-of-network benefit, you can see any doctor you want, you must pay the bill yourself and then submit a claim form for reimbursement. The insurance carrier will then reimburse you a certain amount (usually 70%) after you satisfy an annual deductible. The POS plan offers you added flexibility at an additional cost.

Deciding When to Go to an Emergency Room

Most HMO-style medical plans require that you see your primary care physician or go to an urgent care facility when you need routine care or urgent care. When you have an emergency, however, you should go to an emergency room. But how will you know if your definition of an emergency is the same as the insurance company’s definition? Unfortunately, if you guess wrong, it could affect the amount of benefit you receive. Here are some examples that should help serve as general guidelines, although they may differ with each insurance carrier:

Go to the emergency room if you experience:

Serious breathing difficulties
Unconsciousness
Uncontrollable bleeding
Major burns
Sudden onset of chest pain
Spinal injuries
Shock
Seizures
Caustic substance in eyes
Anything that is considered life-threatening

Go to an urgent care facility for:

Broken bones
Persistent pain
Lacerations
Possible poisonings
Heat Exhaustion
Objects in eye, ear or nose

Medical problems such as colds and flus should be treated by your primary care physician during a scheduled office visit.

Drug Formulary: What Is It?

Those of you who have had prescriptions filled recently have probably heard more and more pharmacists refer to your insurance carrier’s drug formulary. A drug formulary is a list of preferred medications used to treat health plan members. Formularies have been used for years in hospitals to ensure quality and affordability in prescription drug selections. Prescription drugs are one of the main contributors to rising healthcare costs, and many carriers are looking to formularies to help minimize future rate increases. Most carriers select their formularies based on FDA approval, safety, quality, efficacy and, lastly, cost. Only after a medication is deemed safe and effective is cost considered. A panel of expert pharmacists, physicians and medical directors reviews the formulary lists at each carrier on a regular basis. If you would like to see if a certain drug is covered on your carrier’s formulary, check their website or call the member services phone number on the back of your ID card. Also, when your doctor prescribes a medication to you, ask him or her to check your insurance formulary to see if the drug is covered. It could help prevent costly surprises at the pharmacy.

Prescription Drugs: What's Advertised Versus What's Covered

It’s hard to miss those commercials and print ads for prescription drugs that will cure everything from allergies to hair loss. The problem is that many carriers do not include these drugs on their formularies, which means they’re not always covered. It is frustrating to see a drug advertised on television and have your doctor prescribe it, only to find out when you reach the pharmacy that you have to pay the entire cost. Why can’t the advertising agencies and the insurance carriers be a little more in sync?

The medical community will deny that their prescription habits are influenced by commercials. However, 22% of the recent $43-billion increase in prescription drug sales came from the ten most heavily advertised drugs. Drug companies have realized this and are expected to continue their increased advertising efforts. Although this is good for the pharmaceutical industry, it is bad for consumers, but not hopeless. If you see a drug advertised that you believe will help you, talk to your doctor about it and discuss other alternatives. Check with the member services department of your insurance carrier before your visit so you know what is covered and what isn’t. Remember, a carrier’s drug formulary is there to protect you from experimental drugs with little or no track record. If your carrier doesn’t cover a drug, it may not be in your best interest to take it until it’s been studied for a longer period of time. If your doctor insists that you need a drug not covered by insurance, make him or her justify the medical necessity of their claim. By calling member services ahead of time and having a discussion with your doctor, you should almost always be able to find a safe and effective drug that is covered by insurance. There are plenty of choices out there; do not be afraid to exercise your rights as a consumer, especially when it comes to your health.

Order Prescription Drugs by Mail and Save

If you are routinely taking some type of a maintenance drug, chances are you can order prescriptions through the mail and save on co-payments. Here’s how it works - you get two handwritten prescriptions from your doctor for the same drug. One prescription is for a thirty day supply, the other is for a ninety day supply or longer, depending on how much your doctor can prescribe at one time. You fill the prescription for your thirty day supply at the local pharmacy, so you have medication on hand. You then complete a prescription-by-mail form and mail it, along with the other prescription and a check for two co-payments. In return, you will get a three-month supply of medication for only two month’s worth of co-payments. For example, if you pay $10 per month for a prescription, it would cost you $30 if you obtained your three-month supply through the pharmacy. By ordering your drugs through the mail, it would only cost you $20 for the same three-month supply. Refills are easier too! Depending on how long your prescription is written for, you can simply reorder by completing a form and mailing it in. No more waiting in long pharmacy lines! Prescription-by-mail forms can be obtained through your benefits department or by calling the member service telephone number on the back of your medical ID card.