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Health insurance or health benefits are purchased to protect you and your family financially against the costs of an unexpected illness or injury. The principle of "health insurance" is simple: people pay premiums to cover the possibility of needing medical attention and protect themselves financially. People who use fewer medical services help pay for the coverage for those who have medical needs: illness, suffering an accident or having a chronic health condition.
Health insurance is a way for people and insurance companies to "share the risk" of medical costs. People – whether healthy or sick - pay premiums into a pool of money, administered by an insurance company, so that there is money to pay for services when someone in the pool of insured people needs medical attention.
Insurance pays out benefits to those customers who make claims when they see a provider, need treatment or tests. If the insurance company collects more premium than they make in payments and other administrative costs, then they make a profit. If they pay out more in claims than they have collected, they show a loss.
Purchasing health insurance, whether through your business or individually, can be time consuming and confusing. However, purchasing the right health plan can be critically important to the financial well being of you and your family. A good place to start the process is by reading the "Buyers Guide to Health Insurance." This guide will give you a basic understanding of health insurance terminology, standard policy provisions and frequently asked questions.
Next, consider how you would like to purchase a policy. Depending on your own comfort level with insurance information, there are three main resources to help you purchase a policy:
An insurance carrier’s website or a clearinghouse website
A licensed health insurance producer (agent or broker)
Contact the company directly through its customer service line
Health insurance policy premiums are typically the same regardless of how you purchase the policy.
It’s important you read your policy very carefully before making your decision!
Individual Health Insurance
if you are self-employed, unemployed or work for a company that does not offer employee health benefits, buying individual health insurance may be your best option for coverage.
When buying individual health insurance for yourself or for you and your family, the health insurance carrier is allowed to weigh personal risks, medical history and health conditions of the prospective member(s). Based on that information, the carrier may decide whether to offer coverage with some restrictions and premium cost. The carrier may deny you coverage on an individual policy or provide limited coverage, but must inform you about exceptions in that coverage for pre-existing conditions.
There are many different types of individual health insurance policies in the marketplace. Be sure you understand your options and what you are buying so the coverage you want, and expect, is there should you need it. See below for a listing of individual plan carriers.
Group Health Insurance or Health Benefits Coverage
You may have one option, or a choice of several plans that your employer has selected.
One advantage of "employer group plans" (if one is available to you) is that the premium cost is often shared by your employer. Small employer group plans in Colorado are "guaranteed issue," meaning that if you are a member of the group, you cannot be denied insurance and it cannot be cancelled due to your health condition. The small group market includes employers with up to 50 employees. See below for a list of small group health insurance carriers.
Some employers choose to offer coverage for health benefits through "self-funded" plans, which are plans that provide specific health coverage, but are not state-regulated insurance.
The premiums collected from employees are pooled and the employer or the plan administrator reimburses people for covered health benefits from the pool of money. The employer handles the premiums as one of the company’s budget lines. Know whether your health plan is "insurance" or an employer "self-funded plan" (often called an ERISA plan.) If you have concerns or complaints about a "self-funded" plan, the Division of Insurance does not have jurisdiction. Employer "self-funded" plans are regulated under the federal Department of Labor and must adhere to a set of rules and laws for that type of health coverage.