Individual plans may be purchased from a variety of carriers as either an indemnity plan (commonly known as a "traditional" or "fee-for-service" plan) or as a managed care plan (HMO, PPO or POS). The B&E Plan may also be offered as an Exclusive Provider Organization (EPO) plan.  These options are outlined in more detail below.

Indemnity Plans

Generally, indemnity plans allow you to choose any physician or hospital and require you to file a claim after treatment and expenses are incurred. Thus, your choice of a licensed health care provider is made by you. The indemnity plans do, however, incorporate some elements of cost-containment, such as requiring pre-authorization of non-emergency hospitalizations and prior review and approval for certain services (for example, non-emergency surgery and certain tests and procedures).

The policy issued by your carrier carefully outlines the procedures you must follow. If you have questions about those procedures, you should contact your carrier or insurance producer for further assistance.

Indemnity plans typically require you to satisfy a deductible before the carrier will pay benefits based on the covered charge. After you have paid the deductible amount, you and the carrier share the covered charges for awhile by each paying a percentage of the allowed charge. This is referred to as coinsurance. You are responsible for your coinsurance share until you reach the maximum out-of-pocket amount. After that, the carrier pays the full amount of the allowed charge for all covered charges. The standard individual plans have various deductibles and coinsurance options to choose from (see the Benefits section).  Some carriers offer the B&E plan as an indemnity plan. 

"Covered charges" are charges for services and supplies which are covered by the policy or contract and which are less than or equal to the allowed charge for the service or supply.

For example, assume you have chosen Plan C with a $1,000 deductible. You receive a bill for $4,000 and the entire amount is considered a "covered charge." You will be responsible for the first $1,000, as your deductible. Of the remaining $3,000, your carrier pays 70 percent -- or $2,100. You would be responsible for the 30 percent balance -- or $900. Subsequent covered charges during that same year would be paid at 70 percent by the carrier, with you responsible for paying 30 percent. Once the sum of your deductible plus your 30 percent coinsurance share reaches the Maximum Out of Pocket (MOOP) of $3,500, the carrier pays for most additional "covered charges" at 100 percent for the rest of the calendar year.  Covered charges for prescription drugs are handled differently than covered charges for other services and supplies.  Covered charges for prescription drugs will continue to be covered at the plan coinsurance (70% in this example) even after the MOOP has been satisfied, and will not be paid at 100%.

In the example above, the carrier considered the entire amount of the bill as a "covered charge." Sometimes the amount the provider bills exceeds the "allowed charge" for the service. When this happens, the carrier only pays benefits based on the "reasonable and customary charge."  The covered person is responsible for charges that are not covered under the individual plan, and for the balance of covered charges that exceed what the carrier considers reasonable and customary.

Health care services and treatments are covered as stated in the individual policy. There also may be limitations on the amount that is reimbursed for a provided service.

Managed Care Plans

Carriers that offer managed care plans typically provide comprehensive benefits by contracting with a network of physicians, hospitals and other health care professionals.  There are several types of managed care plans, as described below.

HMO Plans

Health Maintenance Organizations (HMOs) offer individual plans with a network feature to provide network-based forms of managed care. The HMO has a network of physicians, hospitals and other health care professionals which provides members with medical treatment and care, subject to the terms of the individual plan. You choose a Primary Care Provider or Primary Care Physician (PCP) from those participating in the HMO network. That PCP coordinates your health care, referring you to specialists in the network, when necessary. Services not provided by or referred by a PCP are not covered, except for emergency medical care.  An HMO may offer individual plans that do not require referrals.  These no referral plans are often marketed as “direct access” or “open access” plans.

You are responsible for a copayment for specified services, for example, a $30 copayment for a physician visit or a $300 per day copayment for hospitalization. Generally, there are no calendar year deductibles or coinsurance requirement; however, the prescription drug benefits in the individual HMO Plan are subject to 50% coinsurance. 

HMOs must offer the HMO standard plan with a $30 copayment option, but may offer other copayment options as well as other cost-sharing options, including:

	A “split copayment” for physician services, where the copayment for use of a specialist may be higher than the copayment for a PCP visit.
	A plan that applies deductible and coinsurance provisions to certain services (but deductibles, coinsurance and copayments can not all apply to the same services or supplies.)

Some carriers are offering the B&E plan as an HMO product. 

See the individual HMO Plan options available on the rate comparison sheet. 

Please note:  An HMO is not required to offer coverage to persons who do not reside in its approved service area.  If a person covered under an HMO is outside the service area on vacation or attending school, or otherwise temporarily out of the service area, the only coverage available to the person while outside the service area is for emergency or urgent care. 

PPO Plans

Preferred Provider Organization (PPO) plans are network-based forms of managed care which allow you to seek medical care and treatment either from within a network of physicians, hospitals and other health care professionals or from physicians, hospitals and other health care professionals that are outside of the PPO network. If you seek medical care and treatment from network providers, you generally will be eligible for more benefits and/or less cost sharing. If you seek care and treatment from providers that are outside of the network, you will be eligible for less benefits, which usually means more cost sharing. In other words, you will probably have to pay more of the cost of services received outside of the network than you would if you obtained services within the network. 

The network benefits under the plan may be subject to copayments, just as is the case with HMO coverage and/or there may be deductible and coinsurance requirements. Non-network benefits will always be subject to a deductible and coinsurance.

Carriers are not required to sell PPO plans. PPO plans that are offered are identified on the rate comparison sheets. Contact the carriers directly for information concerning their PPO plan designs.

POS Plans

Point-of-Service (POS) plans are network-based forms of managed care which allow you to seek medical care and treatment either from within a network of physicians, hospitals and other health care professionals or from physicians, hospitals and other health care professionals that are outside of the network. If you seek medical care and treatment from network providers other than your designated primary care physician (PCP) you will need to get a referral from your PCP.  When you use network services you generally will be eligible for more benefits or less cost sharing than if you seek care outside the network. If you seek care and treatment from providers that are outside of the network, you will be eligible for lower benefits or more cost sharing. In other words, you will probably have to pay more of the cost of services received outside of the network than you would if you obtained services within the network. 

Sometimes a POS plan may be available that does not require referrals to visit a network provider other than your PCP.  These plans are often marketed as “open access” or “direct access” plans. 

The network benefits under the plan may be subject to copayments, just as is the case with HMO coverage and/or there may be deductible and coinsurance requirements. Non-network benefits will always be subject to a deductible and coinsurance.

Carriers are not required to sell POS plans. Because POS plans are similar to PPO plans, POS plans are identified together with the PPO plans on the rate comparison sheets. Contact the carriers directly for information concerning their POS plan designs.

EPO Plans

Exclusive Provider Organization (EPO) Plans are available only in connection with the B&E product.  EPO plans are similar to HMO plans in that there is a network of physicians, hospitals and other health care professionals which provides members with medical treatment and care.  While a member is encouraged to select a PCP, it is not required.  Members can seek treatment directly from any physician in the network. However, only emergency services are covered outside of the network, even when a person is outside of the service area of the EPO. 

The B&E plans sold as EPO plans include copayment, deductible and coinsurance provisions. There are separate rate comparison sheets for the B&E Plan.  

Frequently Asked Questions About Delivery Systems

Question 1: What plan should I choose if I want to keep my present doctors?

Check with your doctors to find out if they participate in any HMO, PPO, POS or EPO plans listed as available through the New Jersey Individual Health Coverage Program. If they do not participate in one of the networks, and you are unwilling to select new doctors, you may want to avoid HMO or EPO plans since those plans do not provide non-network coverage.  If you select a PPO or POS plan, you would be able to access care from your out-of-network providers, and still receive coverage, but benefits will be at the non-network level (which usually means more out-of-pocket cost to you).  With an indemnity plan, you may use any doctor you choose. 

Question 2: How can I compare costs between an indemnity plan and a managed care plan or even one managed care plan to another?

You should compare not only the premium cost of the plans, but also your potential out-of-pocket costs for various services, based on the deductible, coinsurance or copayment requirements of each plan.  Consider your medical care utilization over the course of an average year.  How many doctor visits do you generally have?  Be sure to include visits to specialists.  What would those visits cost under the terms of various plans you are considering? 

Question 3: What are Allowed Charges?

Allowed charges are the allowances carriers use for various services under an indemnity plan and non-network services under a PPO or POS plan. For example, a provider may bill you $500 for a service. The carrier will determine what the allowed charge is for that service. If the allowed charge for the service is $460, the carrier will calculate benefits based on the $460 charge. The provider may require you to pay the $40 difference. Carriers are required to use standards established in accordance with the IHC Program rules to determine the amount of an allowed charge. While the IHC Program requires carriers to determine allowed charges according to specific rules, the IHC Program cannot give you information on what the allowed charge will be for a service you plan to use. 

Question 4: What if I want to change from one individual plan to another? Can I do it whenever I like?

It depends on the plan you have and the plan with which you want to replace it.  You must wait for the November Open Enrollment period to make certain plan changes.  For example, if you have an HMO plan, you can only switch to an HMO plan with a lower copayment or to a non-HMO plan during the November Open Enrollment period.  However, if you bought an individual HMO for the first time, and realize the plan is not for you during the first 90 days, you may replace the HMO with a non-HMO at any time during the first 90 days.  If you have a B&E plan, either with or without a rider, you may only replace it with a standard individual plan or with a B&E plan with a different rider during the November Open Enrollment period.  You can only switch to a plan that has a higher monthly premium during the November Open Enrollment period. More specifically, you can switch at any time: (a) from one individual plan to another individual plan with a lower premium, or (b) from a standard individual plan to the same type of standard individual plan with the same or greater deductible, same or greater coinsurance or same or greater copayments, or (c) from a B&E Plan with a rider to a B&E Plan without a rider.

But you can only switch during the Open Enrollment Period in November: (a) from any individual plan to another individual plan with a greater premium (for example, from a B&E Plan to a standard Plan C), or (b) from an individual plan without a rider to an individual plan with a rider, or (c) from one rider to another rider, or (d) from an HMO Plan to a non-HMO standard plan (including those offered as PPO and POS products), or (e) from an HMO Plan to another HMO Plan with lower copayments.

Question 5: Am I covered under my HMO plan if I need to use a doctor or hospital outside of New Jersey?

Coverage for services provided outside the service area of the HMO is generally limited to medical emergencies and urgent care.  Sometimes HMO carriers allow members to use doctors or hospitals located in another state if the doctor or hospital belongs to that HMO’s network in that other state. Contact your HMO for details.

Question 6: If I am covered under Plan C issued as an indemnity plan and admitted to the hospital on an emergency basis and am not able to call to notify the carrier, can the carrier still apply a penalty for not requesting authorization?

It depends. The standard plans issued as indemnity coverage require that you request authorization for an emergency admission within 48 hours after admission, or the next business day, whichever is later, or as soon as reasonably possible. If you are not able to call, a hospital representative, your doctor or a family member may call on your behalf. If authorization is not requested, as required, and it was reasonably possible for you to have provided notice, your benefits will be reduced by 50%.

Question 7: If I use the services of an emergency room or facility, but am not admitted, must I call the carrier to request authorization?

Yes. The standard plans issued as indemnity coverage require that you request authorization for emergency treatment within 48 hours after treatment, or the next business day, whichever is later, or as soon as reasonably possible. If authorization is not requested, as required, your benefits will be reduced by 50%.