Smc and SMC Education Grant Information

A contract between an insurance provider (e.g. an insurance company or a government) and an individual or his/her sponsor (that is an employer or a community organization). The contract can be renewable ( annually, monthly) or lifelong in the case of private insurance. It can also be mandatory for all citizens in the case of national plans. The type and amount of health care costs that will be covered by the health insurance provider are specified in writing, in a member contract or “Evidence of Coverage” booklet for private insurance, or in a national [health policy] for public insurance.

(US specific) In the U.S., there are two types of health insurance – tax payer-funded and private-funded.[3] An example of a private-funded insurance plan is an employer-sponsored self-funded ERISA plan. The company generally advertises that they have one of the big insurance companies. However, in an ERISA case, that insurance company “doesn’t engage in the act of insurance”, they just administer it. Therefore, ERISA plans are not subject to state laws. ERISA plans are governed by federal law under the jurisdiction of the US Department of Labor (USDOL). The specific benefits or coverage details are found in the Summary Plan Description (SPD). An appeal must go through the insurance company, then to the Employer’s Plan Fiduciary. If still required, the Fiduciary’s decision can be brought to the USDOL to review for ERISA compliance, and then file a lawsuit in federal court.

The individual insured person’s obligations may take several forms:[citation needed]

Premium: The amount the policy-holder or their sponsor (e.g. an employer) pays to the health plan to purchase health coverage. (US specific) According to the healthcare law, a premium is calculated using 5 specific factors regarding the insured person. These factors are age, location, tobacco use, individual vs. family enrollment, and which plan category the insured chooses.[4] Under the Affordable Care Act, the government pays a tax credit to cover part of the premium for persons who purchase private insurance through the Insurance Marketplace.[5](TS 4:03)

Deductible: The amount that the insured must pay out-of-pocket before the health insurer pays its share. For example, policy-holders might have to pay a $7500 deductible per year, before any of their health care is covered by the health insurer. It may take several doctor’s visits or prescription refills before the insured person reaches the deductible and the insurance company starts to pay for care. Furthermore, most policies do not apply co-pays for doctor’s visits or prescriptions against your deductible.