Health Insurance
Coverage models
Indemnity (fee-for-service) plans reimburse after deductible and coinsurance. HMO members use a network, choose a primary care physician, and need referrals; care is prepaid and capitated. PPO members may use in-network or out-of-network providers at a higher cost. POS blends HMO gatekeeping with some out-of-network freedom; EPO covers network only. Cost-sharing vocabulary: deductible, copay (flat dollar), coinsurance (percentage), and out-of-pocket maximum. Group plans, individual plans, ACA marketplace plans, Medicaid, and Medicare (Part A hospital, Part B medical, Part C Medicare Advantage, Part D drugs) each have distinct rules.
Disability, long-term care, and business uses
Disability income replaces a percentage of income (commonly 60–70%). Own-occupation pays if the insured cannot perform their own job - broader and costlier; any-occupation requires inability to perform any reasonable work. The elimination period is the waiting time before benefits; the benefit period is the maximum duration. Residual benefits pay partial amounts for partial disability. Long-term care benefits trigger when the insured cannot perform 2 of 6 ADLs (bathing, dressing, eating, toileting, transferring, continence) or has cognitive impairment; it covers nursing home, home care, and assisted living. Business uses include key person, buy-sell, and business overhead expense coverage.
Traps
Employer-paid premiums are deductible to the business, but disability benefits received are then taxable to the employee; employee-paid premiums are nondeductible and benefits are tax-free. Individual health premiums are generally not deductible. COBRA continuation runs 18 months (longer in disability or certain events) and applies to employers with 20+ employees. ACA rules prohibit preexisting-condition exclusions and annual/lifetime dollar limits on essential benefits, and permit children to stay on a parent's plan to age 26.
Rule of thumb
Longer elimination period = lower premium; own-occupation = broader coverage = higher premium.
Worked example: Insured has a $2,000 deductible, 80/20 coinsurance, and a $5,000 out-of-pocket maximum. A $12,000 covered claim pays: insured $2,000 + 20% of $10,000 ($2,000) = $4,000, within the cap.