Small Business Owner's Insurance

The Florida Department of Financial Services Small-Business Owners’ Insurance Dear Fellow Floridian: Insurance coverage is an integral part of a solid financial foundation. Insurance can help us recover financially after illness, accidents, natural disasters or even the death of a loved one. But with the wide variety of insurance products available, choosing the correct type and amount of coverage can be a challenge. The policies and laws that regulate financial matters often change, so it is essential to be aware of new developments. The Florida Department of Financial Services publishes a variety of consumer guides to help you understand how different types of insurance policies work. These publications define some of the industry’s terminology and outline your rights and responsibilities. Each guide also contains basic information and tips on selecting an insurance agent and company. Topics include homeowners, automobile, life, health, small-business and many other types of insurance. The Department also publishes guides and brochures covering other financial issues such as mortgages, securities and identity theft. You can receive any of our publications by calling the Florida Department of Financial Services Consumer Helpline toll-free at 1-800-342-2762. They may also be downloaded from our Web site at www.fldfs.com. For availability of Spanish versions of these guides, please check the Web site. If you have questions after reading this guide, please call our Consumer Helpline toll-free at 1-800-342-2762 between 8 a.m. and 5 p.m. (Eastern time) Monday through Friday. The hearing impaired may use a TDD to call 1-800-640-0886 during these hours. You may also contact the service office in your area (listed inside the back cover of this guide). Sincerely, Alex Sink Chief Financial Officer State of Florida Contents 4 9 11 12 14 16 35 35 36 37 38 Types Of Property And Liability Coverage Purchasing Options Insuring Your One-Person Or At-Home Business Health Coverage For Your Employees Small Employers Health Care Access Act High-Deductible Health Plans How To Select An Agent How To Select An Insurance Company Insurance Fraud Costs Us All! Community Outreach Programs Glossary Note Most insurance rates and forms in Florida are regulated by the Office of Insurance Regulation. Although it is administratively housed within the Department of Financial Services, OIR is a separate entity that reports to the Florida Cabinet. Because DFS handles consumer-related insurance matters, only DFS is mentioned throughout this publication. Consumers should remember that DFS is their point of contact for all insurance problems and questions. The Florida Department of Financial Services distributes this guide for educational purposes only; it does not constitute an endorsement for any service, company or person offering any product or service. Printed on partially recycled paper. Copyright ©2006-2007 Florida Department of Financial Services You may obtain this guide in alternative formats such as audio recording or large print by calling our Consumer Helpline toll-free at 1-800-342-2762. You may also download this guide through the Internet at www.fldfs.com; Telecommunications Device for the Deaf (TDD) users may obtain it by calling 1-800-640-0886. Consumer Helpline 1-800-342-2762 or visit our Web site at: www.fldfs.com Telecommunications Device for the Deaf 1-800-640-0886 Small-Business Owners’ Insurance Finding the best insurance plan to protect your business is one of the many important decisions a small-business owner makes. This guide explains required and optional coverage you need to consider. To determine your business insurance needs, you should review your property and risks. Your property is the building and equipment you own. Your risks are the financial responsibilities you have for the people and property your business employs. Types of Property and Liability Coverage Required Coverage Florida law requires business owners to purchase workers’ compensation and commercial automobile insurance under the following guidelines: Workers’ compensation insurance is required for any nonconstruction business employing four or more people and any construction business with at least one employee. Commercial automobile coverage is required for businesses that own, lease or operate a motor vehicle. with a work-related injury. This coverage is provided by a workers’ compensation policy, secured by the employer. The type of business—defined by classification codes as either construction or nonconstruction—and the business structure are the key factors in determining when coverage is required. Applications for election of coverage or exemption from coverage must be filed with and approved by the Florida Department of Financial Services, Division of Workers’ Compensation. These applications have specific requirements and may require submission of additional documentation. Applications and instructions are available at the Division’s Web site at www.fldfs.com/wc. For more information on workers’ compensation insurance, call the Department of Financial Services Consumer Helpline toll-free at 1-800-342-2762; the Workers’ Compensation Customer Service Center at (850) 413-1601; or visit the Division’s Web site at www.fldfs.com/wc. Workers’ compensation coverage Workers’ compensation coverage provides medical and partial wage replacement benefits to employees injured as a result of work-related activity. This coverage also provides the employer protection from the threat of a civil lawsuit by an employee 4 Commercial automobile coverage If your business owns, leases or operates motor vehicles, you must obtain commercial automobile coverage. Requirements and options vary, so check with your insurance agent to determine what types of coverage you need. You should also contact your city and county government and the U.S. Department of Transportation to check for any other requirements. Commercial motor vehicle coverage is similar to the auto insurance most people carry on their personal cars. Most policies include property coverage for your vehicle, as well as liability coverage for damage caused by an employee driving a company vehicle. If you are using your personal automobile for a business purpose, you may not be covered, as the rules and guidelines are different for each insurance company. Review the business use of your personal vehicle with your insurance agent to be sure you are covered. You can purchase coverage through an insurance company, or you can selfinsure your vehicles. For more information on self-insurance, contact the Florida Department of Highway Safety and Motor Vehicles, Division of Financial Responsibility, Neil Kirkman Building, 2900 Apalachee Parkway, Tallahassee, FL 32399-0500, or call (850) 922-9000. Local city and county requirements While workers’ compensation and commercial automobile coverage may be the only coverage required by Florida law, the city or county you operate in may have additional requirements. Call the occupational license office in your county or city to find out if you need additional insurance. Banks or lending institutions Although not required by law, your bank or lending institution may require you to purchase property coverage if you borrow money to pay for buildings, equipment or any other property for your business. This protects the lender’s interest, and allows you to repair, replace or pay off loans for items that are damaged or destroyed. Leased equipment or property could also have insurance requirements. Check your lease agreement for details. 5 Optional Coverage Even if the law does not require your business to carry insurance, you may want to purchase some coverage to protect you, your property and your assets. This coverage is sold as a package policy that includes several types of insurance. For example: property, liability and automobile coverage could make up a package policy. Here are some brief descriptions of the many types of insurance available to business owners. Different businesses have different needs. Ask your agent to help you choose the type of insurance coverage that best suits you. Bonds guarantee that you will perform a specific action or provide work of a certain quality. For example, if a bonded builder fails to perform as agreed, the client can get some money back through a settlement. Boiler and machinery insurance pays for loss or damage to your property resulting from a sudden and accidental breakdown of equipment. Business income or interruption insurance pays lost earnings if you must suspend operation of your business because of an insured property loss. Extra expense coverage reimburses your business for any added expenses incurred during the restoration period following damage to the business and impairment of its operations as the result of an insured loss. Cargo and transportation insurance covers your company’s goods and products while they are in transit. Errors and omissions insurance protects professionals from losses caused by their errors or oversights. Fidelity insurance covers business clients or owners for losses due to dishonest acts by owners or employees. Flood insurance covers losses to your building(s) and its contents due to flooding. Liability insurance protects your business from financial loss as a result of injuries, deaths or property damage caused by your products, business operations or employees. There are two types: Premises-and-operations provides coverage for accidents, such as “slip and fall” incidents, on your property. Products-and-completed-operations helps pay for monetary losses resulting from injury or damage caused by a product or completed job. Professional liability insurance pays liability claims arising from wrongful practice by physicians, attorneys or other professionals. 6 Property insurance protects business property and physical assets. There are three main types: Named-peril coverage specifies the events that the policy will cover. For example, you may buy a named-peril policy as protection from losses caused by fire, explosion and smoke. Comprehensive coverage provides broader coverage for all perils, except those specifically excluded in the policy. Windstorm insurance pays for losses to buildings and their contents caused by windstorms (such as hurricanes and tornadoes) or hail. Property Insurance: Replacement Cost vs. Actual Cash Value With property insurance, you can buy either replacement cost or actual cash value coverage. Actual cash value (ACV) insurance pays the cost of damaged property and goods after deducting for their depreciation. For example, if you paid $2000 for a computer five years ago, ACV would only pay its current value, say $500. Replacement cost coverage is more expensive. It pays the cost of replacing your property without deducting for depreciation. You should compare the premiums for replacement cost versus actual cash value when buying or renewing a policy. 7 Legal Expense Insurance Legal expense insurance is available to provide you with modestly priced legal services. It also encourages you to consult with an attorney before serious problems arise. The Department of Financial Services issues licenses to companies and agents selling legal expense insurance. These companies offer various types of plans that range from basic consultation to more complex legal services. You may contact the Specialty Products Administration of the Florida Department of Financial Services at (850) 413-3144 to request a listing of authorized legal expense plans. You can also get this list and more information by going to the Florida Bar’s Web site at www.flabar.org and clicking on “Public Information,” where you will find the link to “Group and Prepaid Legal Services.” 8 Purchasing Options In Florida, you have the option of purchasing your insurance through a variety of insurance organizations, depending on the type and size of your business. Many authorized insurers are licensed to sell commercial insurance in Florida. Also, surplus lines insurers can provide coverage for businesses and professionals in high-risk situations. There are risks and limitations associated with both types of insurance provider. The following sections outline these organizations and explain how they are licensed and regulated. Alternatives to Authorized Insurers Commercial self-insurance funds With this type of plan, a group of business owners pools its risks and money to provide insurance through a shared fund. The fund must have enough assets to guarantee the payment of claims, and all rates must be filed with the Department. A commercial self-insurance fund may provide commercial liability, property and workers’ compensation insurance. Commercial self-insurance funds must issue assessable policies. This means that if a business does not have enough money to pay the claims, the other participating businesses are assessed, or charged, to make up any shortfalls. Commercial self-insurance funds cannot write insurance outside of Florida, and the Department must approve all forms used by the fund administrators. However, FIGA will not pay the claims of failed or bankrupt commercial self-insurance funds. Authorized Insurers An authorized insurer is a company authorized by the Department of Financial Services to sell insurance. Most business owners seek coverage through authorized insurers and the licensed agents who represent them. The Department requires authorized insurers to regularly submit their rates, financial standing, premiums, claims and policy forms for review. These measures ensure that you are treated fairly and that the insurance company has enough reserve cash to pay claims. Authorized insurers must also contribute to the Florida Insurance Guaranty Association (FIGA), which pays most claims for policyholders if an insurer becomes insolvent. Although many business owners choose to use authorized insurers, other options may be available. 9 Joint underwriting associations (JUAs) JUAs are organizations of licensed insurance companies that provide coverage to consumers unable to obtain it in the traditional marketplace. Insurance may be purchased through various types of JUAs, including the Workers’ Compensation Joint Underwriting Association and the Florida Joint Underwriting Association for Commercial Auto Risks. Damage from Florida’s recent hurricane seasons has made obtaining commercial property insurance difficult for some businesses. As a result, a property and casualty JUA has been formed to assist business owners who cannot otherwise find coverage. For more information, call the PCJUA toll-free at (866) 416-4728 or visit its Web site at http://www.floir.com/ PCJUA/Index.htm. underwriting criteria, such as liability for day care centers or property coverage for expensive business equipment. Surplus lines insurers fill this need. However, before turning to a surplus lines insurer, your agent must apply for and receive rejections from at least three standard insurers. Freedom from some regulation allows surplus lines insurers to respond to the unmet needs of insurance consumers. The Department does not issue surplus lines insurers licenses to offer insurance in Florida. Therefore, no regulator in Florida has reviewed these insurance contracts, and FIGA does not provide any coverage for claims if a surplus lines company goes bankrupt. However, when surplus lines insurers provide certain financial information, they may receive official approval from the Department. The Department does not regulate the rates these companies charge or the policy forms they use. Therefore, if you obtain a surplus lines policy, it is important that you read it thoroughly. These policies frequently involve differences in coverage and deductibles not found in other policies. Risk retention groups A risk retention group provides commercial liability insurance to its members. Generally, members are professionals with similar businesses, or engaged in similar business activities with similar liabilities. Risk retention groups must apply for permission to organize in one state (called the certificated state). Once the risk retention group has been certified in one state, it registers as a liability insurance company in other states in which it wishes to do business. The Department cannot regulate the forms or the rates of a risk retention group that is not certified in Florida, and FIGA will not cover losses if the group becomes insolvent or bankrupt. Purchasing groups Business owners or professionals may form a purchasing group to buy commercial coverage, thereby saving money by negotiating a group rate through a trade association rather than by purchasing individual policies. Before buying coverage for a group of businesses, the purchasing group must get approval from the Department of Financial Services. Purchasing groups must buy coverage from an authorized insurer, a risk retention group or an eligible surplus lines insurer. Coverage through purchasing groups is not protected by FIGA. Surplus lines insurers Standard insurance companies often reject high-risk applicants that do not meet their 10 Insuring Your One-Person or At-Home Business If you run a home-based or one-person business, most of the information presented in this guide applies to you, as well. Do not assume that your homeowners or renter’s insurance policy will cover the professional equipment in your home or your liability needs. Most homeowners and renters’ policies specifically exclude coverage for property used in a business. If your home-based business involves products, inventory or walk-in customers, you will need a business insurance policy. A business policy will insure you separately with property and liability coverage as though you were renting space for your business. Many insurance companies have developed special insurance policies for athome businesses. With the help of a good agent, your property and liability needs may be easy to meet. If you want health coverage, you may have to shop around for an individual policy or an HMO until you qualify for a smallgroup policy (see “Small Employers Health Care Access Act” on p. 14). If your spouse works for an employer that offers health care coverage, you may be insurable under his or her employer’s plan. You may also be able to take advantage of group insurance through your membership in associations or professional organizations. 11 Finding the to Health best insurance planthe many To determine your business insurance Coverage for Your Employees your property protect your business is one of needs, you should review While not required by you must make as a offer benefits, important decisions law, employers sometimes and risks. such as group life and health coverage, to attract and keep good employees. The next few pages address health care coverage. small-business owner. This guide explains If you want to learn optional coverage you please request a free copy of our Life Insurance and the required and more about life insurance, Annuitiesconsider. consumers by calling the Consumer Helpline toll-free at 1-800-342-2762. Or, need to guide for Your property is the building and you can download it from the Department’s Web site at www.fldfs.com. Your risks are the equipment you own. Types of Health Coverage Traditional health insurance, managed care plans, and dental, vision and disability insurance are among the types of health coverage available to small employers. Traditional Health Insurance With traditional health insurance, employers usually offer health benefits to their employees by purchasing coverage through an insurance company at group rates. The advantage of an HMO is that, in return for the limited choice of doctors and hospitals, HMO members usually pay less out of their own pockets than people with traditional insurance. There is also little or no paperwork for HMO members to complete when they receive care. The main disadvantage of an HMO is that employees cannot always visit the physician or medical facility of their choice. They must choose from a group of physicians that contracts with the HMO, except in an emergency situation. For more information on HMOs, health insurance or other health coverage concerns, please request a free copy of our Health Maintenance Organizations or Health Insurance guides for consumers by calling the Department of Financial Services Consumer Helpline toll-free at 1-800-342-2762. You may also download them from the Department’s Web site at www.fldfs.com. Managed Care Managed health care combines the delivery and financing of health care services. The most popular form of managed care is the health maintenance organization (HMO). Your employees choose physicians and medical service providers from a list of HMO contract providers (hospitals, physicians, specialists, medical services, etc.). The Office of Insurance Regulation regulates HMOs financially, reviewing and approving HMO contracts and rating methods, and monitoring HMOs for financial solvency. The Florida Agency for Health Care Administration regulates the quality of care offered by HMOs. If you have questions or complaints regarding quality of care issues, contact the Agency for Health Care Administration’s toll-free Consumer Hotline at 1-888-419-3456. 12 Association-Based Coverage An insurance company that markets an association-based certificate to a Florida resident must obtain a license from the Florida Department of Financial Services. However, the insurer may keep the master policy in the name of an association or trust based outside of Florida. In addition, the insurer may file its policy forms and rates for approval in the association’s home state. Please be aware that this means some of Florida’s most important insurance laws covering benefits and rate increases may not apply to out-of-state, association-based coverage, even though the insurance is sold to Florida residents. In particular, the government of the home state (the state where the policy was issued) may not closely review or approve the rates involved. For more information about associationbased coverage, you may request a free copy of Health Insurance: A Guide for Consumers by calling the Consumer Helpline toll-free at 1-800-342-2762, or you may download it from the Department’s Web site at www.fldfs.com. 13 Small Employers Health Care Access Act The Small Employers Health Care Access Act makes health insurance plans available to small-business employers regardless of the health claims experience of a group of employees or the health status of any individual employee in that group. Here are the benefits offered by this law: Guaranteed Issue Insurers are required to offer all health benefit plans to small-business employers with one to 50 employees on a guaranteed-issue basis. However, if you are a sole proprietor or the sole officer of your corporation seeking coverage, you are considered a “one-life group.” One-life groups must apply for coverage during an annual open enrollment period that lasts the entire month of August. Regardless of when you apply during the month of August, your coverage will not start until the first day of October. Guaranteed issue means that the policy must be issued regardless of the employer’s or an individual employee’s claims history, pre-existing condition(s) or health status. Insurers and HMOs may ask health and medical questions, but the answers cannot be used to deny enrollment. Although enrollment cannot be denied, an insured person may be subject to a waiting period before medical claims are paid for certain pre-existing conditions. For an employer with fewer than two employees, a pre-existing condition is an illness that is diagnosed or treated, or a condition for which an ordinarily prudent person would seek treatment, 24 months prior to the purchase of a health insurance policy, if the employee has had no prior coverage. The pre-existing condition period lasts only 12 months for those who have had prior coverage under a different health 14 plan. However, that 12-month period will be reduced by the length of time that you have satisfied a pre-existing condition clause under the prior coverage (see “Portability” in the following section). For an employer with two or more employees, the definition of a pre-existing condition is “a physical or mental condition, regardless of the cause, for which medical advice, diagnosis, care or treatment was recommended or received within six months of the enrollment date or time of application.” For these employees, the maximum waiting period is 12 months, minus any time satisfied under a pre-existing condition clause with a prior health plan (see “Portability” in the following section). For employers with two to 50 employees, an insurer that offers group health insurance coverage may not impose any pre-existing condition exclusion for pregnancy. It is important to remember that insurance companies may refuse to renew coverage for fraud or intentional misrepresentation by the employer of the insured. Therefore, it is important for employees to provide “truthful and accurate” health and medical information to insurers and HMOs. Portability Portability allows a covered person or dependent to meet the waiting period for a pre-existing condition only once, even if the individual changes their employer or insurer. To qualify, you must have continuous coverage with no more than a 63-day break (the maximum number of days you can go without coverage before your portability rights expire). Some employers require employees to be employed for a period of time before they can join the company’s health plan. While this employment requirement frequently lasts three to six months, this delay will not count against the 63-day requirement for joining another health plan in order to qualify for exercising your portability rights. 15 Standard and Basic Health Plans The standard and basic health plans allow employers and employees to compare prices and services between health coverage companies (insurers and HMOs). The coverage of these plans is identical for each company, but they differ in price, service and out-of-pocket expenses. The standard plan, with some limitations, includes coverage for: • • • • • • • • • inpatient hospitalization, outpatient services, newborn children, child care supervision, adopted and foster children upon placement in the residence, mammograms, handicapped children, emergency or urgent care outside the service area, and prescriptions. High Deductible Health Plans (HDHP) Since Sept. 1, 2004, small-employer group coverage providers have been required to offer at least one HDHP that meets federal requirements of a health savings account (HSA) or health reimbursement arrangement (HRA—see next section) in addition to the standard and basic offerings. These tax-advantaged accounts will be used to pay for qualified medical expenses as defined by the IRS. The Department of Financial Services does not have authority over HSAs or HRAs. However, the Office of Insurance Regulation does have the authority to review and approve HDHP insurance contracts. A listing of small-employer group coverage providers who offer approved HDHPs is available on the Division of Consumer Services Web site at http://servicepoint.fldfs.com The standard plan has higher premiums and lifetime benefits, but lower out-of-pocket expenses. With the basic plan, the monthly premiums are lower, but your out-of-pocket expenses are higher. For more information, see the chart beginning on page 20 of this guide. Remember that you should consider your needs and those of your employees before deciding on any health plan. Ask your agent for complete explanations of all options. Do not waive your rights to these plans without reviewing them first. 16 17 What Are HSAs and HRAs, and Who Can Have Them? What is an HRA? An HRA (health reimbursement arrangement) is an employer-funded account that reimburses employees for qualified medical care expenses, typically combined with a high-deductible health plan. What is an HSA? An HSA (health savings account) is a tax-exempt trust or custodial account established to pay qualified medical expenses of the account beneficiary who, for the months for which contributions are made to an HSA, is covered under a highdeductible health plan. Who is eligible to establish an HSA? An “eligible individual” means, with respect to any month, any individual who: 1. is covered under an HDHP on the first day of such month; 2. is not also covered by any other health plan that is not an HDHP with certain exceptions for plans providing certain limited types of coverage; 3. is not entitled to benefits under Medicare (generally, has not yet reached age 65); and 4. may not be claimed as a dependent on another person’s tax return. What is a “high-deductible health plan” (HDHP)? An HDHP is an insurance policy that satisfies certain federally imposed annual deductible and out-of-pocket expense requirements. Self-Only Coverage: • • annual deductibles of at least $1,000 annual out-of-pocket expenses not exceeding $5,000 18 Family Coverage: • • annual deductibles of at least $2,000 annual out-of-pocket expenses not exceeding $10,000 In the case of family coverage, there is only one deductible. It does not matter which family member incurs the expenses to meet the deductible. Amounts are indexed for inflation. A plan does not fail to qualify as an HDHP merely because it does not have a deductible (or has a small deductible) for preventive care (i.e., annual physicals; obesity weight loss programs; screening services such as mammograms; tobacco cessation programs; child and adult immunizations; and routine prenatal and well-child care). What other kinds of health coverage may an individual maintain without losing eligibility for an HSA? An individual does not fail to be eligible for an HSA merely because, in addition to an HDHP, the individual has coverage for any benefit provided by “permitted insurance.” Having additional insurance policies such as: • • • • • • accident, disability, specific injury (i.e. a cancer policy), dental care, vision care, or long-term care Additional HDHP Attributes Include: • • • Please note: Out-of-network copays don’t count toward out-of-pocket maximums. will not affect your HSA. Charts The following chart shows how the out-of-pocket expenses and types of coverage differ between the standard and basic plans for individuals and families. Brackets around language found in the Schedules of Benefits are used to identify options that insurance carriers may exercise when developing their policies. When the brackets are placed around figures, such as the maximum out-of-pocket maximums, the carrier can choose which of the optional maximum amounts it will use in its contract. When the brackets are around an entire statement, such as the description of services requiring prior authorization from the carrier, it means that the carrier can decide whether or not to use this requirement in its contract. When deciding on a small-group plan, be aware of what options carriers have. 19 Small-Business Health Insurance Plans Standard Benefit Plan: Mandated Option One HMO COPAY I. Cost Sharing Deductible - Individual Deductible - Family Coinsurance Percentage Copays Maximum Out of Pocket - Individual* Maximum Out of Pocket - Family* None None Not Applicable As Specified $3,000 2x $1,000 3x 20% As Specified $3,000 2x $5M $1,000 3x 20% As Specified $3,000 2x $5M $1,000 3x 20%/40% (in/out) As Specified $3,000 2x $5M Coinsurance or $300 copay/ day for first five (5) days HMO COINSURANCE INDEMNITY PPO Maximum Lifetime Benefit $5M II. Inpatient Hospital $300 copay/day for first Services five (5) days III. Emergency Care Services Emergency Room Ambulance Urgent Care IV. Outpatient Services Surgical Care in Outpatient $200 copay Hospital Department Surgical Care in Ambulatory $100 copay Surgical Center Primary Care Physician Office Visit Specialist Office Visit $25 copay $50 copay $150 copay $100 copay $75 copay Coinsurance or $300 copay/ Coinsurance day for first five (5) days Coinsurance** Coinsurance** Coinsurance** Coinsurance Coinsurance Coinsurance Coinsurance Coinsurance Coinsurance Coinsurance** Coinsurance** Coinsurance** Coinsurance** Coinsurance Coinsurance Coinsurance Coinsurance Coinsurance (Maximum 10 visits/CY)*** Coinsurance Coinsurance Coinsurance or $25 copay in network Coinsurance or $50 copay in network Coinsurance or $25 copay/visit Maximum 10 visits/CY)*** Coinsurance or $25 copay in network (Maximum 20 visits/CY)*** Nonsurgical Spine & Back $25 copay/visit (Maximum Coinsurance** (Maximum Disorder Treatment 10 visits/CY)*** 10 visits/CY)*** Outpatient Rehabilitative $25 copay (Maximum 20 Services (Speech, PT, OT) visits/CY)*** Coinsurance**(Maximum Coinsurance (Maximum 20 visits CY)*** 20 visits/CY)*** *Out-of-pocket maximum expenses are defined to exclude deductibles and prescription copays in all plan options. **In certain cases, HMO may use the amount from the HMO copay plan model in lieu of coinsurance. ***Calendar Year 20 Standard Benefit Plan: Mandated Option One HMO COPAY V. Prescription Drugs (Preferred Generic/ $10/$30/$50 Preferred Brand/ Nonpreferred) VI. Home Health Care VII. Mental Health Services Mental Health Outpatient Services Mental Health Inpatient Services Alcohol - Substance Abuse VIII. Skilled Nursing Facility IX. Hospice X. Private Duty Nursing XI. Durable Medical Equipment, Orthotics & Prosthetics XII. X-Ray, Laboratory Diagnostic Services Diagnostic Procedures including EKG, lab tests, traditional X-ray exams Imagery Services including MRI, PET, and CT scans Covered [Coinsurance] [Coinsurance] [Coinsurance] $25 copay/visit (Maximum Coinsurance** (Maximum Coinsurance (Maximum 20 visits/CY)*** 20 visits/CY)*** 20 visits/CY)*** $100 copay/day (Maximum 20 visits/ CY)*** Maximum $2,000 Lifetime Benefit 100 days Lifetime Maximum Covered in lieu of Hospitalization Not Covered Covered as Described in Coverage Provisions Coinsurance** (Maximum 20 visits/ CY)*** Coinsurance** (Maximum $2,000 Lifetime Benefit) 100 days Lifetime Maximum Covered in lieu of Hospitalization Not Covered Covered as Described in Coverage Provisions Coinsurance (Maximum 20 visits/CY)*** Coinsurance (Maximum $2,000 Lifetime Benefit) 100 days Lifetime Maximum Covered in lieu of Hospitalization Not Covered Covered as Described in Coverage Provisions Coinsurance or $25 copay/visit (Maximum 20 visits/CY)*** Coinsurance (Maximum 20 visits/CY)*** Coinsurance (Maximum $2,000 Lifetime Benefit) 100 days Lifetime Maximum Covered in lieu of Hospitalization Not Covered Covered as Described in Coverage Provisions HMO COINSURANCE $10/$30/$50 INDEMNITY $10/$30/$50 PPO $10/$30/$50 Coinsurance or $25 copay/visit (Maximum 60 visits/CY)*** $25 copay/visit (Maximum Coinsurance** (Maximum Coinsurance (Maximum 60 visits CY)*** 60 visits/CY)*** 60 visits/CY)*** $100 copay Coinsurance** Coinsurance Coinsurance *Out-of-pocket maximum expenses are defined to exclude deductibles and prescription copays in all plan options. **In certain cases, HMO may use the amount from the HMO copay plan model in lieu of coinsurance. ***Calendar Year 21 Standard Benefit Plan: Mandated Option One HMO COPAY XIII. Preventive Services Including: Annual Physical Reproductive Exam Child Health Supervision Prenatal & Postnatal Care Screening and Health Assessment Exams Eye and Hearing Exams (adult & child) 1-Preventive Medical & Reproductive Care is subject to $250 CY*** maximum benefit 2-The carrier may waive cost sharing for these services or use an alternative cost sharing mechanism that does not exceed the level of a Primary Care Physician’s Office Visit HMO COINSURANCE 1-Preventive Medical & Reproductive Care is subject to $250 CY*** maximum benefit 2-The carrier may waive cost sharing for these services or use an alternative cost sharing mechanism that does not exceed the level of a Primary Care Physician’s Office Visit INDEMNITY 1-Preventive Medical & Reproductive Care is subject to $250 CY*** maximum benefit 2-The carrier may waive cost sharing for these services or use an alternative cost sharing mechanism that does not exceed the level of a Primary Care Physician’s Office Visit PPO 1-Preventive Medical & Reproductive Care is subject to $250 CY*** maximum benefit 2-The carrier may waive cost sharing for these services or use an alternative cost sharing mechanism that does not exceed the level of a Primary Care Physician’s Office Visit *Out-of-pocket maximum expenses are defined to exclude deductibles and prescription copays in all plan options. **In certain cases, HMO may use the amount from the HMO copay plan model in lieu of coinsurance. ***Calendar Year 22 Standard Benefit Plan: Mandated Option Two HMO COPAY I. Cost Sharing Deductible - Individual Deductible - Family Coinsurance Copays Maximum Out of Pocket - Individual* Maximum Out of Pocket - Family* Maximum Lifetime Benefit None None Not Applicable As Specified $5,000 2x $5M $1,000 3x 20% As Specified $5,000 2x $5M Coinsurance or $300 copay/day for first five (5) days $1,000 3x 20% As Specified $5,000 2x $5M Coinsurance $1,000 3x 20%/40% (in/out) As Specified $5,000 2x $5M Coinsurance or $300 copay/day for first five (5) days HMO COINSURANCE INDEMNITY PPO II. Inpatient Hospital $300 copay/day for first Services five (5) days III. Emergency Care Services Emergency Room Ambulance Urgent Care IV. Outpatient Services Surgical Care in Outpatient Hospital Department Care in Ambulatory Surgical Center Primary Care Physician Office Visit Specialist Office Visit $200 copay $100 copay $25 copay $50 copay $150 copay $100 copay $75 copay Coinsurance** Coinsurance** Coinsurance** Coinsurance Coinsurance Coinsurance Coinsurance Coinsurance Coinsurance Coinsurance** Coinsurance** Coinsurance** Coinsurance** Coinsurance Coinsurance Coinsurance Coinsurance Coinsurance Coinsurance Coinsurance or $25 copay in network Coinsurance or $50 copay in network Coinsurance or $25 copay/visit (Maximum 10 visits/CY)*** Coinsurance or $25 copay in network (Maximum 20 visits/CY)*** Nonsurgical Spine & Back $25 copay/visit (Maximum Coinsurance** (Maximum Coinsurance (Maximum Disorder Treatment 10 visits/CY)*** 10 visits/CY)*** 10 visits/CY)*** Outpatient Rehabilitative $25 copay (Maximum 20 Services (Speech, PT, OT) visits/CY)*** Coinsurance** (Maximum Coinsurance (Maximum 20 visits/CY)*** 20 visits/CY)*** *Out-of-pocket maximum expenses are defined to exclude deductibles and prescription copays in all plan options. **In certain cases, HMO may use the amount from the HMO copay plan model in lieu of coinsurance. ***Calendar Year 23 Standard Benefit Plan: Mandated Option Two HMO COPAY V. Prescription Drugs (Preferred Generic/ $10/$30/$50 Preferred Brand/ Nonpreferred) VI. Home Health Care VII. Mental Health Services Mental Health Outpatient Services Mental Health Inpatient Services Alcohol - Substance Abuse VIII. Skilled Nursing Facility IX. Hospice X. Private Duty Nursing XI. Durable Medical Equipment, Orthotics & Prosthetics XII. X-Ray, Laboratory Diagnostic Services Diagnostic Procedures including EKG, lab tests, traditional X-ray exams Imagery Services including MRI, PET, and CT scans Covered [Coinsurance] [Coinsurance] [Coinsurance] $25 copay/visit (Maximum Coinsurance** (Maximum Coinsurance (Maximum 20 visits/CY)*** 20 visits/CY)*** 20 visits/CY)*** Coinsurance** $100 copay/day Coinsurance** (Maximum Coinsurance (Maximum (Maximum 10 days/ (Maximum 10 days/CY)*** 10 days/CY)*** 10 days/CY)*** CY)*** Maximum $2,000 Lifetime Benefit 100 days Lifetime Maximum Covered in lieu of Hospitalization Not Covered Covered as Described in Coverage Provisions Coinsurance** (Maximum $2,000 Lifetime Benefit) 100 days Lifetime Maximum Covered in lieu of Hospitalization Not Covered Covered as Described in Coverage Provisions Coinsurance (Maximum $2,000 Lifetime Benefit) 100 days Lifetime Maximum Covered in lieu of Hospitalization Not Covered Covered as Described in Coverage Provisions Coinsurance or $25 copay/visit (Maximum 20 visits/CY)*** Coinsurance (Maximum 10 days/CY)*** Coinsurance (Maximum $2,000 Lifetime Benefit) 100 days Lifetime Maximum Covered in lieu of Hospitalization Not Covered Covered as Described in Coverage Provisions HMO COINSURANCE $10/$30/$50 INDEMNITY $10/$30/$50 PPO $10/$30/$50 Coinsurance or $25 copay/visit (Maximum 60 visits/CY)*** $25 copay/visit (Maximum Coinsurance** (Maximum Coinsurance (Maximum 60 visits/CY)*** 60 visits/CY)*** 60 visits/CY)*** $100 copay Coinsurance** Coinsurance Coinsurance *Out-of-pocket maximum expenses are defined to exclude deductibles and prescription copays in all plan options. **In certain cases, HMO may use the amount from the HMO copay plan model in lieu of coinsurance. ***Calendar Year 24 Standard Benefit Plan: Mandated Option Two HMO COPAY XIII. Preventive Services Including: Annual Physical Reproductive Exam Child Health Supervision Prenatal & Postnatal Care Screening and Health Assessment Exams Eye and Hearing Exams (adult & child) 1-Preventive Medical & Reproductive Care is subject to $250 CY*** maximum benefit 2-The carrier may waive cost sharing for these services or use an alternative cost sharing mechanism that does not exceed the level of a Primary Care Physician’s Office Visit HMO COINSURANCE 1-Preventive Medical & Reproductive Care is subject to $250 CY*** maximum benefit 2-The carrier may waive cost sharing for these services or use an alternative cost sharing mechanism that does not exceed the level of a Primary Care Physician’s Office Visit INDEMNITY 1-Preventive Medical & Reproductive Care is subject to $250 CY*** maximum benefit 2-The carrier may waive cost sharing for these services or use an alternative cost sharing mechanism that does not exceed the level of a Primary Care Physician’s Office Visit PPO 1-Preventive Medical & Reproductive Care is subject to $250 CY*** maximum benefit 2-The carrier may waive cost sharing for these services or use an alternative cost sharing mechanism that does not exceed the level of a Primary Care Physician’s Office Visit *Out-of-pocket maximum expenses are defined to exclude deductibles and prescription copays in all plan options. **In certain cases, HMO may use the amount from the HMO copay plan model in lieu of coinsurance. ***Calendar Year 25 Basic Benefit Plan: Mandated Option One HMO COPAY I. Cost Sharing Deductible - Individual Deductible - Family Coinsurance Copays Maximum Out of Pocket - Individual* Maximum Out of Pocket - Family* Maximum Lifetime Benefit None None Not Applicable As Specified $7,500 2x $2M $2,500 3x 40% As Specified $7,500 2x $2M Coinsurance** $2,500 3x 40% As Specified $7,500 2x $2M Coinsurance $2,500 3x 40%/60% (in/out) As Specified $7,500 2x $2M Coinsurance HMO COINSURANCE INDEMNITY PPO II. Inpatient Hospital $750 copay/day Services III. Emergency Care Services Emergency Room Ambulance Urgent Care IV. Outpatient Services Surgical Care in Outpatient Hospital Department Surgical Care in Ambulatory Surgical Center Primary Care Physician Office Visit Specialist Office Visit Surgical Care in Ambulatory Surgical Center $500 copay $250 copay $100 copay $75 copay Coinsurance** Coinsurance** Coinsurance** Coinsurance Coinsurance Coinsurance Coinsurance Coinsurance Coinsurance Coinsurance** Coinsurance Coinsurance $250 copay $25 copay $75 copay $75 copay Coinsurance** Coinsurance** Coinsurance** Coinsurance** Coinsurance** (Maximum 10 visits/ CY)*** Coinsurance Coinsurance Coinsurance Coinsurance Coinsurance (Maximum 10 visits/CY)*** Coinsurance Coinsurance or $25 copay in network Coinsurance or $75 copay in network Coinsurance or $75 copay in network Coinsurance or $25 copay/visit (Maximum 10 visits/CY)*** $25 copay/visit Nonsurgical Spine & Back (Maximum 10 visits/ Disorder Treatment CY)*** *Out-of-pocket maximum expenses are defined to exclude deductibles and prescription copays in all plan options. **In certain cases, HMO may use the amount from the HMO copay plan model in lieu of coinsurance. ***Calendar Year 26 Basic Benefit Plan: Mandated Option One HMO COPAY Outpatient Rehabilitative $25 copay (Maximum 10 Services (Speech, PT, OT) visits/CY)*** V. Prescription Drugs (Preferred Generic/ $10/$50/$100 Preferred Brand/ Nonpreferred) $25 copay/visit VI. Home Health Care (Maximum 60 visits/ CY)*** VII. Mental Health Services Mental Health Outpatient Services Mental Health Inpatient Services Alcohol - Substance Abuse VIII. Skilled Nursing Facility IX. Hospice X. Private Duty Nursing XI. Durable Medical Equipment, Equipment, Orthotics Orthotics & & Prosthetics Prosthetics XII. X-Ray, Laboratory Diagnostic Services Diagnostic Procedures including EKG, lab tests, traditional X-ray exams Imagery Services including MRI, PET, and CT scans Covered [Coinsurance] [Coinsurance] [Coinsurance] $25 copay/session Coinsurance** (Maximum Coinsurance (Maximum (Maximum 10 visits/CY)*** 10 visits/CY)*** 10 visits/CY)*** $750 copay/day (limit of 5 days/CY)*** Maximum $2,000 Lifetime Benefit 100 days Lifetime Maximum Covered in lieu of Hospitalization Not Covered Covered as Described in Coverage Provisions Coinsurance** (limit of 5 Coinsurance (limit of 5 days/CY)*** days/CY)*** Coinsurance** (Maximum $2,000 Lifetime Benefit) 100 days Lifetime Maximum Covered in lieu of Hospitalization Not Covered Covered as Described in Coverage Provisions Coinsurance (Maximum $2,000 Lifetime Benefit) 100 days Lifetime Maximum Covered in lieu of Hospitalization Not Covered Covered as Described in Coverage Provisions Coinsurance (Maximum 10 visits/CY)*** Coinsurance (limit of 5 days/CY)*** Coinsurance (Maximum $2,000 Lifetime Benefit) 100 days Lifetime Maximum Covered in lieu of Hospitalization Not Covered Covered as Described in Coverage Provisions HMO COINSURANCE INDEMNITY PPO Coinsurance or $25 copay in network (Maximum 10 visits/CY)*** $10/$50/$100 Coinsurance or $25 copay/visit (Maximum 60 visits/CY)*** Coinsurance** (Maximum Coinsurance (Maximum 10 visits/CY)*** 10 visits/CY)*** $10/$50/$100 Coinsurance** (Maximum 60 visits/ CY)*** $10/$50/$100 Coinsurance (Maximum 60 visits/CY)*** $200 copay Coinsurance** Coinsurance Coinsurance *Out-of-pocket maximum expenses are defined to exclude deductibles and prescription copays in all plan options. **In certain cases, HMO may use the amount from the HMO copay plan model in lieu of coinsurance. ***Calendar Year 27 Basic Benefit Plan: Mandated Option One HMO COPAY XIII. Preventive Services Including: Annual Physical Reproductive Exam Child Health Supervision Prenatal & Postnatal Care Screening and Health Assessment Exams Eye and Hearing Exams (adult & child) 1-Preventive Medical & Reproductive Care is subject to $250 CY*** maximum benefit 2-The carrier may waive cost sharing for these services or use an alternative cost sharing mechanism that does not exceed the level of a Primary Care Physician’s Office Visit HMO COINSURANCE 1-Preventive Medical & Reproductive Care is subject to $250 CY*** maximum benefit 2-The carrier may waive cost sharing for these services or use an alternative cost sharing mechanism that does not exceed the level of a Primary Care Physician’s Office Visit INDEMNITY 1-Preventive Medical & Reproductive Care is subject to $250 CY*** maximum benefit 2-The carrier may waive cost sharing for these services or use an alternative cost sharing mechanism that does not exceed the level of a Primary Care Physician’s Office Visit PPO 1-Preventive Medical & Reproductive Care is subject to $250 CY*** maximum benefit 2-The carrier may waive cost sharing for these services or use an alternative cost sharing mechanism that does not exceed the level of a Primary Care Physician’s Office Visit *Out-of-pocket maximum expenses are defined to exclude deductibles and prescription copays in all plan options. **In certain cases, HMO may use the amount from the HMO copay plan model in lieu of coinsurance. ***Calendar Year 28 Basic Benefit Plan: Mandated Option Two HMO COPAY I. Cost Sharing Deductible - Individual Deductible - Family Coinsurance Copays Maximum Out of Pocket - Individual* Maximum Out of Pocket - Family Maximum Lifetime Benefit None None Not Applicable As Specified $5,000 2x $2M [$500] [$750] [$1,000] [$1,500] [$2,500] 3x 20% As Specified [$5,000] [$7,500] 2x $2M Coinsurance** [$500] [$750] [$1,000] [$1,500] [$2,500] 3x 20% As Specified [$5,000] [$7,500] 2x $2M Coinsurance [$500] [$750] [$1,000] [$1,500] [$2,500] 3x [30% / 50% (in/out)] [40% / 60% (in/out)] As Specified [$5,000] [$7,500] 2x $2M Coinsurance HMO COINSURANCE INDEMNITY PPO II. Inpatient Hospital $750 copay/day Services III. Emergency Care Services Emergency Room Ambulance Urgent Care IV. Outpatient Services Surgical Care in Outpatient Hospital Department Care in Ambulatory Surgical Center Primary Care Physician Office Visit Specialist Office Visit $500 copay $250 copay $25 copay $75 copay $250 copay $100 copay $75 copay Coinsurance** Coinsurance** Coinsurance** Coinsurance Coinsurance Coinsurance Coinsurance Coinsurance Coinsurance Coinsurance** Coinsurance** Coinsurance** Coinsurance** Coinsurance** (Maximum 10 visits CY)*** Coinsurance** (Maximum 10 visits/ CY)*** Coinsurance Coinsurance Coinsurance Coinsurance Coinsurance (Maximum 10 visits/CY)*** Coinsurance (Maximum 10 visits/CY)*** Coinsurance Coinsurance Coinsurance or $25 copay in network Coinsurance or $75 copay in network Coinsurance or $25 copay/visit (Maximum 10 visits/CY)*** Coinsurance or $25 copay in network (Maximum 10 visits/CY)*** $25 copay/visit Nonsurgical Spine & Back (Maximum 10 visits/ Disorder Treatment CY)*** Outpatient Rehabilitative $25 copay (Maximum 10 Services (Speech, PT, OT) visits/CY)*** *Out-of-pocket maximum expenses are defined to exclude deductibles and prescription copays in all plan options. **In certain cases, HMO may use the amount from the HMO copay plan model in lieu of coinsurance. ***Calendar Year 29 Basic Benefit Plan: Mandated Option Two HMO COPAY V. Prescription Drugs (Preferred Generic/ $10/$50/$100 Preferred Brand/ Nonpreferred) VI. Home Health Care VII. Mental Health Services Mental Health Outpatient Services Mental Health Inpatient Services Alcohol - Substance Abuse VIII. Skilled Nursing Facility IX. Hospice X. Private Duty Nursing XI. Durable Medical Equipment, Equipment, Orthotics Orthotics & & Prosthetics Prosthetics XII. X-Ray, Laboratory Diagnostic Services Diagnostic Procedures including EKG, lab tests, traditional X-ray exams Imagery Services including MRI, PET, and CT scans Covered [Coinsurance] [Coinsurance] [Coinsurance] $25 copay/ session $25 copay/ session Coinsurance (Maximum (Maximum 10 visits/ (Maximum 10 visits/CY)*** 10 visits/CY)*** CY)*** $750 copay/day (limit of 5 days/CY)*** Maximum $2,000 Lifetime Benefit 100 days Lifetime Maximum Covered in lieu of Hospitalization Not Covered Covered as Described in Coverage Provisions Coinsurance (limit of 5 days/CY)*** Coinsurance** (Maximum $2,000 Lifetime Benefit) 100 days Lifetime Maximum Covered in lieu of Hospitalization Not Covered Covered as Described in Coverage Provisions Coinsurance** Coinsurance** (Maximum (Maximum 10 visits/ 10 visits/CY)*** CY)*** Coinsurance (Maximum 10 visits/CY)*** $25 copay/visit (Maximum 60 visits/CY)*** HMO COINSURANCE $10/$50/$100 INDEMNITY $10/$50 /$100 PPO $10/$50/$100 Coinsurance or $25 copay / visit (Maximum 60 visits/CY)*** Coinsurance** Coinsurance** (Maximum Coinsurance (Maximum (Maximum 60 visits/ 60 visits/CY)*** 60 visits/CY)*** CY)*** Coinsurance** (limit of 5 Coinsurance (limit of 5 days/CY)*** days/CY)*** Coinsurance (Maximum $2,000 Lifetime Benefit) 100 days Lifetime Maximum Covered in lieu of Hospitalization Not Covered Covered as Described in Coverage Provisions Coinsurance (Maximum $2,000 Lifetime Benefit) 100 days Lifetime Maximum Covered in lieu of Hospitalization Not Covered Covered as Described in Coverage Provisions $200 copay Coinsurance** Coinsurance Coinsurance *Out-of-pocket maximum expenses are defined to exclude deductibles and prescription copays in all plan options. **In certain cases, HMO may use the amount from the HMO copay plan model in lieu of coinsurance. ***Calendar Year 30 Basic Benefit Plan: Mandated Option Two HMO COPAY XIII. Preventive Services Including: Annual Physical Reproductive Exam Child Health Supervision Prenatal & Postnatal Care Screening and Health Assessment Exams Eye and Hearing Exams (adult & child) 1-Preventive Medical & Reproductive Care is subject to $250 CY*** maximum benefit 2-The carrier may waive cost sharing for these services or use an alternative cost sharing mechanism that does not exceed the level of a Primary Care Physician’s Office Visit HMO COINSURANCE 1-Preventive Medical & Reproductive Care is subject to $250 CY*** maximum benefit 2-The carrier may waive cost sharing for these services or use an alternative cost sharing mechanism that does not exceed the level of a Primary Care Physician’s Office Visit INDEMNITY 1-Preventive Medical & Reproductive Care is subject to $250 CY*** maximum benefit 2-The carrier may waive cost sharing for these services or use an alternative cost sharing mechanism that does not exceed the level of a Primary Care Physician’s Office Visit PPO 1-Preventive Medical & Reproductive Care is subject to $250 CY*** maximum benefit 2-The carrier may waive cost sharing for these services or use an alternative cost sharing mechanism that does not exceed the level of a Primary Care Physician’s Office Visit *Out-of-pocket maximum expenses are defined to exclude deductibles and prescription copays in all plan options. **In certain cases, HMO may use the amount from the HMO copay plan model in lieu of coinsurance. ***Calendar Year 31 Other Health Options rates can be raised or lowered by no more than 15 percent in the first year of coverage and no more than 10 percent in any renewal year due to claims or health status. Base rates can also increase due to health care cost increases. Group size will generally not affect the rate charged. However, rates for one-life groups may be up to 50 percent higher. COBRA Benefits The federal Consolidated Omnibus Budget Reconciliation Act (COBRA) requires insurance companies that cover employee groups of 20 or more to provide health coverage to employees who lose eligibility to participate in the company’s health plan. Employees typically lose their eligibility when they retire, resign, lose their jobs or have their work hours reduced below the minimum amount required to participate in the company’s health plan. COBRA allows employees enrolled in small-group plans to receive coverage for themselves and their insured dependents for an additional 18 months following the termination of regular health plan coverage. An employee or insured dependent who is disabled at the time of job termination can receive a total of 29 months of continued coverage. Dependents losing coverage (spouse or dependent children) can receive up to 36 months of coverage under certain conditions. Under this law, the employer or its designee (usually its insurance company) is required to inform the employees of their COBRA rights when they lose their eligibility. Modified Community Rating All small-group health plan premiums are determined using a modified community rating. The modified community rating allows five main factors to be considered in determining an individual’s health plan rate: geographic area, gender, age, tobacco usage and family composition. For small-business owners seeking coverage, the rate can be increased if the employer does not have workers’ compensation insurance. Also, the base rate can be raised or lowered based on the employees’ health status, past claims or length of time insured. However, the base Mini COBRA Florida’s Mini-COBRA law provides similar continuation of coverage protection 32 for employees who work for employers with fewer than 20 employees. Note: Under this law, the employee must notify the insurer within 63 days of losing group eligibility that he or she is eligible to continue coverage. If you have specific questions, call the Consumer Helpline toll-free at 1-800-342-2762. Disability income insurance comes in both short-term and long-term coverage. Short-term disability income insurance generally refers to policies with a maximum benefit coverage of two years or less, although some companies may apply this designation to policies with benefit coverage of up to five years. Long-term coverage includes policies with maximum benefit periods of 10 years, to age 65, or in a few instances, for the lifetime of the insured. For the first 12 months of the disability, this type of income policy must provide benefits if the policyholder is unable to perform material and substantial duties of his or her regular occupation. After the first 12 months, the company may base the continuance of benefits on the person’s ability to perform any work for which he or she is reasonably trained. Conversion After you exhaust COBRA, you may qualify for a conversion plan, which is guaranteed-issue, individual coverage that the group plan insurer must offer you. You should receive two conversion plan options with different levels of comprehensive, major medical benefits. However, these benefits may differ from those offered by your previous group plan. If a conversion plan is not available, please call the Consumer Helpline toll-free at 1-800-342-2762, since you may have other options. Disability Income Insurance You may also offer your employees disability income insurance to provide them income if they become disabled from illness or injury and cannot work. Disability income insurance replaces a significant portion of an individual’s income through periodic payments while the individual is disabled due to sickness or injury. Disability income benefits provide monthly or weekly payments of a specified amount for a period of time stated in the policy. 33 Your Rights and Responsibilities YOU HAVE THE RIGHT to have your claim processed within 120 days. YOU HAVE THE RIGHT to change insurance companies every August if you are in a one-person group. YOU HAVE THE RIGHT to receive your policy within 60 days of the date your policy becomes effective. YOU ARE RESPONSIBLE for evaluating your needs and making sure the insurance company and policy or contract you choose can fit those needs. YOU ARE RESPONSIBLE for shopping around and comparing costs and services. YOU ARE RESPONSIBLE for finding out the licensure status of an insurance agent and company. To verify a license, call the Consumer Helpline toll-free at 1-800-342-2762. YOU ARE RESPONSIBLE for reading your policy or contract and making sure you understand what it covers. YOU ARE RESPONSIBLE for filling out your application truthfully and disclosing all pertinent information. 34 How to Select an Agent It is important to remember that most agents are reputable professionals. Insurance agents must take classes and pass certain tests to become licensed. In addition to required exams, some agents choose to take further courses that are optional and provide the agent with additional training in various areas of insurance. These courses can lead to professional insurance designations, such as: CEBS Certified Employee Benefits Specialist CFP Certified Financial Planner ChFC Chartered Financial Consultant CIC Certified Insurance Counselor How to Select an BASIC BENEFIT PLAN: M a n d a t e d O p t i o n T W O Company Insurance As with any major purchase, it is a good idea to shop around to make sure you are getting the most for your money. When selecting an insurance company, it is wise to check on the company’s rating. Several organizations publish insurance company ratings, available in your local library or on the company’s Web site. These organizations include: A.M. Best Company, Duff & Phelps, Standard and Poor’s, Weiss Ratings Inc. and Moody’s Investors Service. Companies are rated on a number of elements, such as financial data (including assets and liabilities), management operations, and the company’s history. Before purchasing insurance, verify whether a company is an authorized insurer in Florida. It is very important that you do business with an authorized insurer in Florida. In most circumstances, benefits would be guaranteed through FIGA and the Florida Life and Health Insurance Guaranty Association (FLAHIGA). FIGA pays the claims of property and casualty authorized insurers if the company becomes insolvent and cannot pay. FLAHIGA pays the claims of life and health authorized insurers if the company becomes insolvent and cannot pay. Call the service office in your area or the Consumer Helpline toll-free at 1-800-342-2762 for more information. CLU Chartered Life Underwriter CPCU Chartered Property and Casualty Underwriter LUTCF Life Underwriting Training Council Fellow RHU Registered Health Underwriter When selecting an agent, choose one who is licensed to sell insurance in Florida. Also, choose an agent with whom you feel comfortable and who will be available to answer your questions. Remember: An insurance agent may represent more than one company. To verify whether an agent is licensed, call the Consumer Helpline toll-free at 1-800-342-2762. 35 Insurance Fraud Costs Us All! Insurance fraud costs each Florida family an additional $1,500 per year* in increased premiums. In fact, it can inflate your premiums by as much as 30 percent, according to the National Insurance Crime Bureau. This includes the money you pay for life, auto, health, homeowners and other types of insurance. You can protect your personal and family pocketbook by learning about the many different types of fraud schemes and scams. Some common examples include: FICTIONAL INJURY – An attorney informs a small-business owner that a client suffered serious injury after falling at the owner’s place of business. Actually, the attorney and client work together to bilk insurance money through phony accident claims. RIGGED ROBBERY – A small-business owner files a phony claim of stolen property or exaggerates the value of missing items. ARSON FOR PROFIT – The co-owner of a financially strapped business intentionally sets fire to the workplace in hopes of obtaining insurance settlement money. UNAUTHORIZED REFERRAL – A laboratory bills an insurance company for a patient’s tests using information stolen from a referring physician. Actually, the laboratory has never tested the patient. DECEPTIVE CLAIM – An employee who suffers a minor injury at work exaggerates the loss or uses a pre-existing injury to file for workers’ compensation. There are many other types of insurance fraud. If you suspect such a crime has occurred, call the Florida Department of Financial Services Fraud Hotline toll-free at 1-800-378-0445. 36 *Source: The Coalition Against Insurance Fraud Protecting Your Privacy Your Insurers and Financial Institutions Under federal law, some banks and insurance companies may have the right to share sensitive and personal information about you with other entities and business interests—without your permission. Fortunately, Florida laws, and rules established by the Department of Financial Services, provide a way for you to protect this personal information. As the policyholder, you must take the lead in protecting your personal information. Community Outreach Programs The Department of Financial Services offers free community outreach programs on a variety of topics to help you make sound financial decisions and avoid becoming a victim of insurance or financial fraud. Speakers are available on the topic of your choice and will work with you to tailor programs to your group’s needs. Choose from one of the topics listed here or call us with your requests. For more information, please contact the service office in your area, or call toll-free 1-800-342-2762. Consumer Protection Topics • • • • You may have already received, or soon will receive, privacy notices from the financial and insurance companies you do business with. These forms give you the opportunity to tell the company that you want your personal information kept private. Unless you complete and return these forms, your personal financial and medical information may be shared with other companies. You may receive these forms on an annual basis, and be required to complete them to keep your information confidential. When you receive a privacy notice form, read it carefully before signing it to avoid unintentionally giving the company permission to share information about you. If you have questions or concerns about these forms, call the Consumer Helpline toll-free at 1-800-342-2762. • • • • • • • Consumer Beware: Insurance Scams and Financial Fraud Wheels, Deals and Credit Card Spiels Are You Covered? Avoid Illegal Insurance Practices Predatory Lending Living in a Danger Zone: Hurricane and Disaster Preparedness New to Florida? How to Cover Your Assets Young Drivers Insurance and Financial Needs in the Golden Years Health, HMOs, Long-Term Care and Medicare Supplement Insurance Small-Business Insurance Needs Workers’ Compensation 37 Glossary Agent – An agent is a person who sells and services insurance policies. Agents must be licensed by the Florida Department of Financial Services to sell insurance in Florida. Authorized Insurer – An authorized insurer is an insurance company that has a Certificate of Authority from the Department of Financial Services to operate in Florida. businesses to cover negligent acts that cause injury or damage to persons or property unrelated to the business. Commercial Liability – Commercial liability is an insurance policy written for Deductible – A deductible is the amount that a policyholder must pay before the insurance company pays. Domestic Insurer – A domestic insurer is an insurance company formed under Florida laws. Florida Life and Health Insurance Guaranty Association (FLAHIGA) – FLAHIGA is an association whose members are all life and health casualty companies authorized to operate in Florida that pays a company’s claims if it becomes insolvent and cannot pay them. Foreign Insurer – A foreign insurer is an insurance company formed under the laws of a state other than Florida, but which offers policies in Florida. under a single master policy. Group Insurance – Group insurance is an insurance policy written on a group of people Insured – The insured are persons and items covered under an insurance policy. Insurer – The insurer is the company that provides the insurance. Liability Limits – The liability limit is the maximum amount of benefits your insurance company will pay for liability claims or losses. Loss – A loss is an occurrence or event resulting in damage or destruction of property, Named Perils – Named perils are specific, named causes of losses that are covered in a property policy. Some examples are fire, windstorm, theft and smoke damage. injury or death. A policy may cover, limit or exclude certain losses depending on the terms of the policy. Pool – A pool is an organization of insurers that band together to write insurance jointly for applicants who are unable to get coverage through ordinary methods. 38 provider network to meet the health care needs of consumers. A traditional insurance carrier provides the health benefits. An insurer contracts with a group of health care providers to control the cost of providing benefits to consumers. These providers charge lower-than-usual fees because they require prompt payment and serve a greater number of patients. Consumers usually choose who will provide their health services, but pay less in coinsurance with a preferred provider than with a nonpreferred provider. Preferred Provider Organization (PPO) – A PPO offers another kind of Risk – Risk is a chance of loss to insured persons, liabilities or properties. Risk Management – Risk management is the management of the various risks that Third-Party Administrator – A third-party administrator is a business licensed by the Department of Financial Services to handle claims for insurance companies or self-insured programs. might affect a business. Its purpose is to identify potential loss situations and to control or reduce them through safety and insurance programs. Certificate of Authority to do business in a particular state. Unauthorized Insurer – An unauthorized insurer is an insurance company not issued a 39 Notes 40 Notes 41 Service Offices Daytona Beach 135 Executive Circle, Ste. 103 Daytona Beach, FL 32114-1180 (386) 323-0900 Fort Lauderdale 499 N.W. 70th Ave., Ste. 301-B Plantation, FL 33317-7574 (954) 321-2900 Fort Myers 2295 Victoria Ave., Ste. 163 Ft. Myers, FL 33901-3867 (239) 461-4000 Jacksonville 921 N. Davis Building B, Ste. 260 Jacksonville, FL 32209 (904) 798-5800 Miami 401 N.W. 2nd Ave., Ste. N-307 Miami, FL 33128-1700 (305) 536-0300 Orlando 400 W. Robinson St., Ste. N-401 Orlando, FL 32801-1751 (407) 835-4400 Pensacola 610 E. Burgess Road Pensacola, FL 32504-6320 (850) 453-7800 St. Petersburg/Largo 11351 Ulmerton Road, Ste. 240 Largo, FL 33778-1636 (727) 587-7260 42 ESCAMBIA SANTA ROSA OKALOOSA WALTON HOLMES WASHINGTON BAY JACKSON N NASSAU GADSDEN LEON FF MADISON SUWANEE TAYLOR LAFAYETTE GIL CH RIS T COLUMBIA ER CALHOUN SO HAMILTON GULF CLAY FRANKLIN DIXIE ALACHUA PUTNAM LEVY MARION ST. JOHNS FLAGLER VOLUSIA LAKE SEMINOLE ORANGE LIBERTY WAKULLA JE BAKER N UNIO BRADFORD DUVAL CITRUS SUMTER HERNANDO PASCO OSCEOLA PINELLAS HILLSBOROUGH POLK Tallahassee Larson Building 200 E. Gaines St. Tallahassee, FL 32399-0323 (850) 413-3132 Tampa 5309 E. Fowler Ave. Tampa, FL 33617-2221 (813) 899-6160 West Palm Beach 400 N. Congress Ave., Ste. 210 West Palm Beach, FL 33401-2933 (561) 640-6700 MANATEE HARDEE OK EE CH OB BREVARD INDIAN RIVER EE ST. LUCIE MARTIN HIGHLANDS SARASOTA DE SOTO GLADES CHARLOTTE PALM BEACH LEE HENDRY BROWARD COLLIER MONROE DADE MONROE 43 DIVISION OF CONSUMER SERVICES 200 E. GAINES ST. TALLAHASSEE, FL 32399-0323