Employers today are faced with a challenging task as they try to balance the need to contain rising health care costs with their responsibility to provide their employees with affordable coverage. While plans with higher deductibles and/or higher copays can effectively keep health care costs in check, conscientious employers may be concerned that these plans will leave their employees facing financial burdens they will be unable to meet. Gap insurance plans give employers a way to provide their employees with a financial safety net. If your company is considering adding a high deductible and/or high copay plan to your coverage offerings, it may be time for you to investigate gap insurance benefits more closely. To aid you in your task, we provide the following answers to common questions about gap insurance and the benefits it provides.
Gap insurance, or Supplemental Limited Benefit Medical Expense Insurance as it is more formally known, is a benefit that helps to cover the exposure that your employees have until their deductible or out-of-pocket maximum is satisfied. For employees who have relatively low deductible and copay amounts, gap insurance is unnecessary. When out of pocket maximums are higher than employees can comfortably manage, however, gap insurance is a necessary protection that can keep them from financial disaster. The majority of workers who choose a high deductible, high copay plan have an out of pocket maximum over $2,500. This can cause an insurmountable financial hardship for many employees and their families unless they have gap insurance to cushion the blow.
How does gap insurance work?
Gap insurance may be used to coordinate benefits with your employees’ primary insurance for inpatient, outpatient, and physician services. Benefits may be paid to the medical provider or directly to your insured employee, depending on the plan you choose. Premiums for gap insurance plans vary, according to the specific benefits you choose, but they are generally low enough that the combination of primary insurance and gap insurance will be less expensive compared to primary insurance with a lower deductible.
What specific benefits does gap insurance provide?
The specific coverage that most gap insurance plans provide is separated into three categories:
- Inpatient services that are covered by gap insurance benefits include hospital stays, inpatient surgeries, and physician’s in-hospital charges. Gap insurance pays inpatient benefits of up to $10,000 per confinement.
- Outpatient Coverage Surgery, diagnostic exams, and other outpatient treatment of injury and sickness is covered, provided the service is performed in a hospital, outpatient surgical or emergency facility, a diagnostic testing treatment facility, or similar facility licensed to provide outpatient treatment. Some gap plans include coverage of outpatient radiation and chemotherapy. Gap plans can pay outpatient benefits depending on the particular plan you choose for your employees.
- Physician office treatment coverage, is included in some gap insurance plans. Gap insurance plans that include physician office treatment coverage generally pay $25 or $50 per visit to the doctor.
Selecting the right health insurance plan for your employees can be a difficult task, but the experienced insurance brokers at MHG are glad to help you sort through the terminology and key features to determine the best group health insurance plan for your business to offer. Our Insurance Specialists will help you assemble a complete insurance offering that includes health insurance, gap insurance coverage, life insurance, disability, and more. Call us today at 954-828-1819 or visit us online at mhginsurance.com for help in selecting the ideal group health insurance plan options for your employees.