Indemnity Health Plan question...

[Guest Kimberly Stewart]

I am wondering if someone can give me information on an indemnity plan (helath plan). I am possibly going to switch employers, but the new company's plan is a health plan through United, it is an indemnity plan. I have researched it a bit, but the information I have been finding is vague.

I have three small children who are constantly at the doctor for ear infections, strep throat, bumped heads, etc.

The way I read indemnity plans is that unlike my usual HMO where I just pay $5 per visit, I would have to pay a % of the bill, usually 20%. In addition, I have read that I would have to pay the bill, then get reimbursed. Also some things I have read say that sometimes indemnity plans do not cover check ups. Would that include vaccinations for my kids, and well visits like prenatal care? I am confused about it all. The employer keeps pushing that it is great because I can see any doctor, but I dont particularly care about that (I have always been happy with the wide choice of doctors my HMO has offered)

I would truly appreciate an experts opinion on this indemnity plan. Is this increase in salary which I would be receiving going to be gobbled up by health care costs?

Thank you much,

Kimberly

[KIP KRAUS]

Kimberly:

The design of the new employer's indemnity plan will depend on how good it is. I would ask the employer for a copy of the Summary Plan Description, which will detail medical benefits that are coverdd and ones that are not covered.

You could also have annual deductibles before any benefits are paid, even at the 80% level. Until you see a full description of the plan, you can't really make a comparision. You are correct in that most indemnity plans do not cover well child care visits, but that doesn't mean that an employer could elect to cover them under an indemnity plan.

I suggest getting more details about the plan and then coming back to this site if you have any questions.

[Larry M]

echoing and expanding upon Kip's comments:

an indemnity plan can provide more, or less, benefits than an HMO - it depends upon the plan the employer has purchased.

A. some of the things you should consider:

1. is there a limit on "out of pocket expenses"? This may be called a "stop loss" and means the plan will pay 100% of covered expenses which are in excess of the combination of copayments incurred by you during the plan year (sometimes the deductible is counted toward the stop loss figure).

So, for example, if the deductible is $100 per year and the stop loss is $1,000 per person (not including the deductible), and you have incurred $7,000 of covered medical expenses on behalf of a child, then you pay the first $100, plus 20% of the next 5,000 and zero thereafter.

2. Many indemnity plans provide "well baby care", immunizations and cover diagnostic tests as well.

3. pre natal care is covered as part of pregnancy benefits .

4. although an indemnity plan says something to the effect of "we will reimburse you for medical expenses.." almost all hospitals and physicians will bill the insurance company on your behalf and bill you for the balance.

5. Yes, for many "healthy families" the hmo's $5 copayment per visit will be a smaller out of pocket cost than the 20% copayment. Whether these will amount to more or less than your change in salary is something you will have to estimate.

6. If you really, truly love your hmo plan and also really, truly like the other aspects of the new employer, check with the hmo to see whether you can continue the hmo plan by paying for it yourself.

Again, review the summary plan description and then come back to the site with any questions you have.