Private Health Coverage

In addition to government programs like Medicare and MO HealthNet, you may also get health coverage offered by private companies. This section will cover the basics about your health coverage options if your employer offers employer-sponsored coverage as a job benefit. Then, it will explain how you can get private health insurance if your employer does not offer it as a benefit.

Note: The rules related to private insurance changed a lot on January 1, 2014 and this article has been updated to reflect those changes.

Does your job have health care coverage as a benefit?

Not all employers offer health care coverage as a benefit — check with your employer’s Human Resources (HR) department to see if your employer offers it. Even employers that offer health insurance usually don’t give it to all employees. For example, an employer may only offer health insurance to employees who work at least half-time. In that example, employees who work less than half-time would not be able to get health care coverage.

If your employer does offer health coverage, talk to the HR department and learn how to sign up. You may have to be working for a certain period of time, called a waiting period, before your coverage begins. It’s important to sign up for coverage when it is first offered. Some plans will not allow you to enroll if you do not enroll when you first become eligible, except if you have certain changes in family or coverage status changes that trigger a special enrollment period.

Your Expenses When You Have Employer-Sponsored Coverage

Even if you get private health coverage through your employer, that doesn’t mean that everything is free for you. Here we’ll introduce what sorts of expenses you may have to pay even if you have private health coverage.

Premiums

With private health coverage, you (or your employer) pay the insurance company a certain amount of money each month to be covered. This payment is called a premium. If your employer offers group health coverage, they may pay for some, or all, of your monthly premium.

Premium Example

You have a policy with a $400 monthly premium. Your employer pays $300 every month and you pay $100 every month to be covered by that policy.

In addition to the premium, there may be other costs like copayments, deductibles and co-insurance if you use medical services. These expenses may be higher if you do not use specific providers contracted by the private insurance company. In the end, the amount you pay for medical services when you have private insurance depends on the type of plan you have and on the details of the policy.

Copayments

A copayment is a small amount of money you have to pay for each medical visit or service. Copayments are often between $10 and $40.

Copayment Example

You have a $30 copayment for office visits and a $15 copayment for prescriptions. Every time you go to the doctor, you pay the doctor’s office $30. Each time you get a prescription filled, you pay the pharmacy $15.

Deductible

A deductible is a set amount of money that you pay out of your own pocket each year before the insurance company will begin to pay for services. While some plans have no deductibles, other plans require you to spend thousands of dollars before they will begin to pay for services.

Deductible Example

You have a policy with a $2,000 yearly deductible. You go to the doctor for the 1st time this year and get a bill for $1,800. You have to pay all of that out of your own pocket, because you haven’t met your deductible amount yet. You go back to the doctor the next month and get another bill for $500. You pay for $200 of that bill and have now met your deductible for the year ($2,000). Your policy will help pay for the remaining $300 of that second bill, and the cost of any other covered medical costs you have during that year, after any copayments and co-insurance that you may be required to pay under your plan.

Co-Insurance

Co-insurance is a percentage of the cost of each medical service that you must pay.

Co-Insurance Example

You have a policy with a 20% co-insurance. That means the policy pays for 80% of medical services and you pay the other 20%. You have a doctor’s visit that costs $200. The policy will pay $160 (that’s 80% of $200) and you pay the remaining $40 (that’s 20% of $200).

Limits to Costs

The good news is that your policy may have a limit on how much money you have to spend in a year. This is called an out-of-pocket maximum. The out-of-pocket maximum does not include the premiums you pay, and certain other costs may or may not be counted.

Out-of-Pocket Maximum Example

Your policy has an out-of-pocket maximum of $5,000 a year. Before you have paid $5,000 in expenses out of your pocket, this particular plan pays for 80% of a bill for a doctor visit. Once you’ve spent more than $5,000 that year, the plan will pay for the entire bill for covered services.

Types of Health Coverage Plans

Your employer may offer you only 1 insurance plan, or may offer you a choice of several different types of plans. There are 4 main kinds of health coverage plans:

Some of the main differences between the plans are costs, how you choose the doctor you see, and the amount of paperwork you have to fill out. Talk to your employer’s Human Resources department to learn more about how each plan they offer works and how much it will cost you.

When you sign up for a plan, you’ll get a booklet, called your policy, with details about your plan. Reading through this booklet carefully can save you time and money.

Public and private coverage at the same time

You can have both private health coverage and public health coverage at the same time. Some private plans have rules limiting what services they will pay for. These rules may include some services that are critical to some people with disabilities, such as Personal Assistance Services (PAS) and private duty nursing.

If you are eligible for Medicare or MO HealthNet and you get a job that offers you private group coverage, be sure you understand how they will work together. Sometimes your MO HealthNet coverage will help pay for some costs associated with your private coverage, such as your premium, copayments, or deductibles.

Buying an Individual Plan on Healthcare.gov

Some people pay a health coverage company directly for their health care coverage instead of getting it through their jobs or parents. This is called individual coverage. With individual coverage, you will usually have to pay a monthly premium. Additional expenses, such as copayments, co-insurance, and a deductible, work the same way as they do for employer-sponsored plans. Also, like employer-sponsored coverage, you can choose between different types of plans like PPOs and HMOs.

The main reason to get an individual plan is if you cannot get health coverage from:

  • Your job
  • Your spouse’s job
  • Your parent’s job
  • MO HealthNet, or
  • Medicare.

If you are in that situation, Healthcare.gov is the easiest place to apply for individual coverage. It used to be that health insurance companies could deny your application or charge you more if you had a disability, but starting in 2014, that's no longer true. Now, anybody under the age of 65 can go to Healthcare.gov and sign up for a private insurance plan.

If you cannot get health coverage from any of the above options and your family’s income is between 100% and 400% of the Federal Poverty Guidelines (FPG), $48,560 per year for an individual ($100,400 for a family of four), the government may help you pay your monthly premium via a tax credit. If your family’s income is between 100% and 250% of FPG, $30,350 for an individual ($62,750 for a family of four), the government will also help you get a plan that has lower copayments and other expenses.

Note: If your income is below 100% of FPG ($12,140 for an individual; $25,100 for a family of four), you cannot get government help paying for your insurance. You could still get an individual plan on Healthcare.gov, but you would have to pay the full premium yourself.

How Does Your Income Compare to FPG?