Understanding Health Insurance
Insurance Waiting Periods
The idea of a waiting period in the world of health insurance may seem simple enough: It's the period of time specified in a health insurance policy which must pass before some or all of your health care coverage can begin. However, the definition is just the tip of the iceberg. Underneath are the types of waiting periods, the rules that apply to each and how they each apply to a given type of health insurance plan.
In general, there are three main types of waiting periods that you encounter in health insurance: employer waiting periods, affiliation periods and pre-existing condition exclusion periods.
- Employer Waiting Period The most common is referred to as the employer waiting period and is found in an employer group plan in which a new employee must wait a given time period, often within three months, before being eligible for health care services. This waiting period is imposed by the employer and is usually done to avoid hit and run behavior by their new employees, in which they file a large claim right after joining, and then quickly leave the company.
- Affiliation Period A waiting period that's imposed by an HMO and not an employer is referred to as an affiliation period. This type of waiting period can't last longer than three months and has specific rules attached to it.
- Pre-existing Condition Exclusion Period A pre-existing condition exclusion period is a type of waiting period that involves those who have a condition during the six months prior to signing up for health insurance. This type of waiting period means that your insurance coverage can be limited or excluded for any pre-existing condition. The length of this type of waiting period can vary from one to 18 months. However, once you've proven that you've had uninterrupted insurance previous to your current plan, this insurance coverage can be added up and credited toward any pre-existing condition exclusion you may have. In fact, if you had at least one year of group health insurance at one job and then received health insurance at a new job without a break of more than 63 days, the new health insurance plan can't impose a pre-existing condition exclusion on you.
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Selecting Your Policy
Whether you're trying to decide which plan to get through your employer (since they often offer several choices) or you're trying to decide on an individual health plan, you need to think first about your needs.
- Do you want a plan that covers preventive care like annual check-ups? Remember that most fee-for-service plans don't cover these visits, but managed care plans do. It's particularly important to consider this aspect if you have (or are planning to have) children.
- How healthy are you? If you need a low premium and are healthy, you might consider a plan with a higher deductible. Keep in mind that accidents happen, however, and a single hospital stay could wipe out your savings and put you into debt. Think about how much money you would be able to put toward medical expenses if it should become necessary.
- Do you have a specific doctor or hospital you want to be able to use? Remember that managed care plans use networks of doctors, and unless your doctor is in that network you'll pay all or some of the bills whenever you see him. If a specific doctor (or doctors) is necessary, you might need a fee-for-service plan.
- How important is it to you to have easy access to specialists? Many managed care plans require a referral from your primary care physician before you can see a specialist. If they don't feel it's necessary, then you'll be paying for the visit out of your own pocket.
For lots more information about health insurance and related topics, check out the links on the next page.