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California Health Insurance - Affordable Health Insurance Quotes in California

Types of Health Insurance and How Health Insurance Works

Health insurance pays for expenses incurred for diagnosis and treatment of covered medical conditions. There are many different types of health insurance plans available in California. If you have a choice, it is important to choose the plan that best fits your specific needs, budget, and lifestyle. Also, make sure that you are aware of the state or federal agency that regulates the type of health care plan you purchase in case you experience questions or problems. Each of the different ways of receiving health care services has advantages and disadvantages. It is in your best interest to become familiar with the different types of health insurance, so you know what may be available to you.

Indemnity Policies (Traditional Fee-for-Service Insurance)
Preferred Provider Organizations (PPOs)
Health Maintenance Organizations (HMOs or Managed Care)
Self-Insured Health Plans (Single Employer Self- Insured Plans)
Multiple Employer Welfare Arrangements (MEWAs)

Indemnity Policies (Traditional Fee-for-Service Insurance)

Most indemnity policies allow you to choose any doctor and hospital that you wish when seeking health care services. The hallmark of traditional fee-for-service insurance is choice. You are given the choice of what provider to visit when seeking covered medical services with few geographic limitations. When purchasing an indemnity policy, you may often have a deductible. The deductible is the amount you are required to pay before policy benefits are provided. You may have a choice in the amount of your deductible. Once the deductible has been paid, the remaining charges are reimbursed to you at a specified percentage according to the policy contract. The difference between eligible charges and the percentage paid is called a "co-payment," and is normally your responsibility. The policy or an employee benefit booklet (if your indemnity policy is group coverage) will spell out the terms and conditions of what is covered and what is not covered. Read your policy or benefit booklet before you need health care services and ask your health insurance agent, insurance company, or employer to explain anything that is unclear.

The California Department of Insurance (CDI) regulates indemnity policies. If you have an individual or group health insurance policy that is a traditional fee-for-service policy issued by a CDI licensed health insurance company, then you may contact the CDI for assistance. Since jurisdiction is divided between state and federal agencies, it can be confusing to determine who regulates your health care coverage. The CDI is always available to assist consumers with health care questions or to direct consumers to the correct agency for assistance. Please see the last page of this brochure for the many ways you can contact the CDI. Important Points to Remember About

Indemnity Policies:

You have the freedom to choose your doctor, specialist, or hospital with few limitations.
Your options are seldom if ever limited by geographic restrictions.
You may be responsible for paying a deductible before covered medical benefits are reimbursable.
You may be required to pay a co-payment for covered medical services.
You can seek assistance from the CDI for questions regarding any indemnity policy issued by an insurance company admitted in California.

Preferred Provider Organizations (PPOs)

A Preferred Provider Organization (PPO) provides a list of contracted "preferred" providers from which to choose. You receive the highest monetary benefit when you limit your health care services to those providers on the list.

If you go to a doctor or hospital that is not on the preferred provider list (referred to as going "out-of-network"), then the plan covers a smaller percentage of your health care expenses or may cover none of your health care expenses based on the contract wording of the plan. Always check with your PPO or consult your list of preferred providers before you seek health care services to make certain your physician or hospital is a contracting provider (part of the network). Make sure that your doctor refers you to health care providers within your PPO network, if applicable.

PPOs in California may be regulated by either the CDI or the Department of Managed Health Care (DMHC) depending on whether the contract or policy was issued by a licensed insurance company or a managed care company. The California Department of Managed Health Care regulates HMOs and plans issued by Blue Cross of California and Blue Shield of California. The CDI regulates policies issued by insurance companies such as BC Life and Health Insurance Company and Blue Shield of California Life and Health Insurance Company. If you are confused about whom to call regarding a PPO problem or concern, then consult your plan documents for regulatory information.

Important Points to Remember About Preferred Provider Organizations:

You receive the highest monetary benefit when staying within the PPO network.
You may have the option to go outside the PPO network at a higher monetary cost to you.
Check to make sure your doctor or any specialist referred to you is part of the PPO network before utilizing covered services.
PPOs can be regulated by either the CDI or the DMHC depending on if the company that issued the contract is a licensed insurance company, or a managed care plan. PPOs can also be self-funded. If you need assistance and you are not sure which agency regulates your plan you can contact the CDI or the DMHC for clarification.

Health Maintenance Organizations (HMOs or Managed Care)

Membership in a Health Maintenance Organization (HMO) requires plan members to obtain their health care services from doctors and hospitals affiliated with the HMO. It is common practice in HMOs for the plan member to choose a primary care physician who treats and directs health care decisions and who coordinates referrals to specialties within the HMO network. The doctors and hospital personnel may be employees of the HMO or contracted providers. Since HMOs operate in restricted geographic regions, this may limit coverage for plan members if medical treatment is obtained outside the HMO network or coverage area. California HMOs are required to cover medically necessary emergency services even when outside of their coverage area. The intent of managed care products is to create less costly delivery of health care services while maintaining quality health care. HMOs offer access to a comprehensive package of covered health care services in return for a prepaid monthly amount (premium). Most HMOs charge a small co-payment depending upon the type of service provided.

All HMOs in California are regulated by the Department of Managed Health Care (DMHC). If you have a complaint with an HMO, contact the member services department of your HMO. HMOs are required to have an internal complaint/grievance process in place. If you file a grievance and it has not been resolved within 30 days or there is some question as to the HMOs decision, then you may contact the DMHC for assistance. Please see contact information listed for the DMHC in the "Resources" section of this brochure

Important Points to Remember About Health Maintenance Organizations:

You must obtain health care services from HMO providers, except in certain emergency situations.
Your choice of primary care physician is important because he/she directs your care. Also, your primary care physician often coordinates referrals to specialties within the HMO.
Your options may be limited by the geographic restrictions of the HMO network.
You may be charged a small co-payment each time you utilize an HMO covered service.
You can seek assistance from the DMHC on all HMO and managed care questions.

Self-Insured Health Plans (Single Employer Self-Insured Plans)

Self-Insured Health Plans have gained in popularity among large employers, labor unions, school districts and other municipalities. These groups provide a pool of money and then proceed to pay for the health care services of their members (employees) from this pool. It is common for self-insured plans to turn over the administration of their health plans to a Third Party Administrator (TPA). The TPA handles all administrative tasks including claims processing and payments. Often the employer will contract with an insurance company to act as a TPA for all health care claims.

Most self-insured health plans fall under the Employee Retirement Income Security Act (ERISA). ERISA is federal law that is enforced by the U.S. Department of Labor, Employee Benefits Security Administration (DOL-EBSA). If you are a member of a self-insured health plan through your employer or union, then you can contact the DOL- EBSA for assistance. However, the DOL-EBSA does not regulate self-insured health plans that are sponsored through school districts, other municipalities, and churches. If you are a member of this type of plan, you can file a complaint with the plan directly or you may seek a legal remedy through a court of law. The DOL-EBSA is available to answer questions about self-insured employer plans that come under ERISA regulation. You can gain information on the type of plan that you participate in by contacting your employer or union. If there is still some question, then you can contact the DOL-EBSA for clarification. Please see the "Resources" section of this brochure.

Important Points to Remember About Self-Insured Health Plans:

If you work for a large employer, have a union affiliation, work for a school district, or work for a municipality, the health plan offered to you may be a self-insured entity.
An insurance company or a TPA may administrate a self- insured health plan.
Self-Insured health plans are most likely subject to federal ERISA law.
If your self-insured health plan is not a school district, other municipality, or a church, you can seek help from the DOL-EBSA.
If your self-insured health plan is a school district, other municipality, or a church, you may seek assistance from the plan directly or from the courts.

Multiple Employer Welfare Arrangements (MEWAs)

MEWAs permit employer members of trade, industry, professional, and other associations to create trust funds for the purpose of offering and providing health care benefits to their employees. Because of significant and widely publicized mishandling of claims by MEWAs in the 1980s and early 1990s, legislation was passed to more closely regulate MEWAs. This legislation forced all MEWAs to file applications for certificates of compliance by November 30, 1995, or cease operating in California. Only MEWAs that satisfied strict requirements were granted certificates of compliance. It is now illegal for new MEWAs to form and to offer health care benefits. Currently, fewer than ten MEWAs have been issued certificates of compliance by the CDI, which permit them to operate legally in California. If your employer presents a health plan to you involving a new MEWA, then contact the CDI immediately. If you receive your health care benefits through one of the approved MEWAs, then you may seek assistance from the CDI if you have any questions or complaints. Please see the last page of this brochure for complete CDI contact information.

Important Points to Remember About Multiple Employer Welfare Arrangements:

Your employer may offer a MEWA health plan if they are an employer member of a trade, industry, professional, or other association.
There are currently less than ten MEWAs operating with CDI certificates of compliance.
After November 30, 1995, no new MEWAs can form, operate, or apply for CDI certificates of compliance.
You can contact the CDI for any questions regarding MEWAs.

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