Accident and Health Insurance
Benefit structure
Health policies pay for medical expense; disability policies replace income. Cost sharing includes the deductible, coinsurance (the insured's percentage after the deductible), copayment and out-of-pocket maximum. Coordination of benefits prevents double payment when two plans cover the same person, with the primary plan determined by rules such as active versus retired employee and birthday rule for dependent children. Delivery models include indemnity, HMO (closed network, gatekeeper, capitation), PPO (network discounts, out-of-network allowed), POS (hybrid) and EPO.
Policy provisions
Time limit on certain defenses is typically two years; grace periods run 7 days weekly, 10 days monthly, and roughly 30 days for other modes. Required provisions cover claim forms, proof of loss, legal actions, physical examination, change of occupation, misstatement of age, reinstatement, and cancellation. Conversion and continuation rights matter on group termination; beneficiaries under group life and health have specific notice rights.
Disability and AD&D
Disability income uses an elimination period before benefits begin, a benefit period, and an own occupation or any occupation definition of disability; residual or partial benefits pay proportionate amounts. Accidental death and dismemberment pays a principal sum for death and a capital sum (a percentage of principal) for specified losses; it pays only for accidental bodily injury, not illness.
Public programs and reform
Medicare has Part A hospital, Part B medical, Part C Medicare Advantage, and Part D drugs, with Medigap supplements filling gaps. Medicaid is income-based, and Pennsylvania's CHIP covers children in families above Medicaid limits. Under the ACA, individual and small-group plans are guaranteed issue, cover essential health benefits, cannot impose lifetime limits, and must allow dependents to age 26.
Trap
Do not confuse a pre-existing-condition limitation with a waiting period; also remember indemnity (medical expense) plans reimburse, while disability plans replace income.