Limited Benefit Frequently Asked Questions
Why are they called “Limited” Benefit (LB) plans?
Limited Benefit plans (also known as “Limited Medical” or “Mini-Med” plans) provide coverage that is generally less expensive than most Major Medical plans. Further, they are “guarantee issue,” which means the consumer cannot be turned down for coverage, unlike many Major Medical plans. In order to make these plans affordable and accessible, the benefit payouts are less than typical Major Medical plans, resulting in greater consumer out-of-pocket expenses. The term “limited” is used to help differentiate these types of plans from Major Medical coverage.Should I buy an LB policy?
The answer depends on a number of factors, from your health status (or that of members of your family), your budget (considering both premium and out-of-pocket costs) and your access to other forms of insurance. The first thing to understand about LB is that it is not Major Medical nor should it be ever considered a replacement for a Major Medical policy. It has been designed as an alternative for those consumers who cannot qualify and/or cannot afford a Major Medical policy. Generally, if you are young and healthy, a Major Medical policy will provide more coverage at less cost than a typical LB plan. Sometimes, by varying the benefits (having a bigger deductible, etc.), the premiums for a Major Medical policy can fit your budget. Before purchasing an LB policy, you should be sure that a Major Medical policy will not work for you. You should consult with a professional insurance agent on your coverage options before deciding on purchasing an LB.I am being offered a membership in an Association; how does that work?
Many of AMLI’s LB plans are offered by Associations as part of their mission to provide quality and relevant goods and services to their members. AMLI issues a group policy to an Association; the Association can then offer coverage under that policy to its current and prospective members. The Association generally packages the LB coverage along with other benefits and services (including other insurance policies, often at varying levels) in order to offer its membership an array of options. You may, of course, join the Association without selecting a membership level that contains an LB policy. Similarly, if you select a membership level that has an LB policy and want to terminate the policy, you can remain a member of the Association.Can I buy an LB plan without going through an Association?
Currently, AMLI only markets LB policies through qualified groups.I have a preexisting condition; can I get LB coverage?
Yes; however, you may be subject to a waiting period for claims related to your illness. For claims not related to a preexisting condition, upon enrollment you would be eligible to receive benefits. The “Preexisting Condition Limitation” means that if you have a condition, illness, disease or other health issue for which you needed treatment within six months leading up to your effective date of coverage, any claims related to this condition would not be covered for the first 12 months of coverage. After 12 months of continuous coverage, you would be covered for all eligible conditions. An exception to this is if you have a “Certificate of Creditable Coverage” and can present evidence that you were insured in a qualified plan up until your enrollment in the LB policy. If you had creditable coverage leading up to your initial enrollment, you would receive credit for the time for which you were covered under the creditable coverage against the waiting period in the preexisting condition limitation.What does HIPAA Creditable Coverage Mean?
The Health Insurance Portability and Accountability Act (HIPAA) was enacted by the U.S. Congress in 1996; among its provisions are protections afforded consumers when switching health insurance plans. The objective of this provision is to prevent consumers from losing coverage for preexisting conditions solely as a result of a change in their health insurance policy. Major Medical carriers are not allowed to enforce a preexisting condition on any new enrollees if they have creditable coverage just prior to enrolling. The definition of creditable coverage can be complicated, but the general rule of thumb is that plans that provide coverage on a covered expense basis - which means that the benefit payment varies based on the amount billed by the provider - are considered creditable. Major Medical and most employer-sponsored plans are considered creditable. Plans that are pure indemnity, which pay a flat amount regardless of covered expense, are generally not considered creditable. Most, but not all, of the plans offered by AMLI are considered creditable because they contain plan design elements that qualify them as such. For these plans, should you decide to terminate your policy, you will receive a Certificate of Creditable Coverage to provide as evidence of your coverage for your new policy. For additional information you can refer to the following Web site:http://www.dol.gov/ebsa/faqs/faq_consumer_hipaa.html