Do you have to be a member of the Medical Society of Virginia to purchase insurance through the Medical Society of Virginia Insurance Agency?
No, the Medical Society of Virginia Insurance Agency is here to assist all physicians in the state of Virginia.
^Back to Top
What is the difference between claims-made & occurrence policies?
The majority of medical professional liability policies are written on a claims-made policy form. For a claims-made policy to respond to a professional liability claim, the claim must be:
reported during the policy period in force (and otherwise covered by the policy); and, involve an incident that
occurred after the retroactive date shown on the declarations page of the policy (usually this is the date of your first claims-made policy). When a claims-made policy expires, it must immediately be replaced with another claims-made policy to avoid a lapse in coverage.
When a claims-made policy is no longer needed, a reporting endorsement ("tail coverage") must be requested. The Reporting Endorsement is attached to the last policy and provides a place to report any future claim resulting from an incident that occurred between the retroactive date and the date the policy expired.
Another type of policy form is the "occurrence form". A very limited number of companies offer professional liability coverage on this form. In contrast to the claims-made policy form, an occurrence policy form is designed to cover claims that result from services performed while the policy was in force, regardless of when the claim is reported. Therefore, with an occurrence policy it is not necessary to obtain "tail" coverage.
The main difference between the two forms is that the coverage under the claims-made form is determined by when the claim is
reported (and the incident must have occurred after the retroactive date). In contrast, coverage under the occurrence form is determined by when the incident
occurred.
^Back to Top
Why do most companies use a claims-made policy form for professional liability policies?
Malpractice insurance companies prefer to use a claims-made policy form because with an occurrence policy form, many incidents that could result in a claim may not be reported until sometime in the future. Therefore, when an occurrence policy ends, the insurance company cannot be sure they are aware of all the incidents that actually occurred during the policy period. When rates are established for occurrence policies, the company must try to forecast for these future anticipated claims. The speculative nature of this approach can lead to pricing inaccuracies.
Since a claims-made policy covers only known claims, or those claims actually reported during the policy period, the insurance company knows at the end of the policy period all claims to which that policy will respond. These factors allow the insurance company to establish rates more accurately.
^Back to Top
What is prior acts coverage?
Prior Acts coverage is when a claims made policy looks back in time to cover medical incidents that happened in the past. Prior Acts coverage is determined by the “retroactive date” identified on the policy. If the medical incident took place after the retroactive date (or prior acts date) identified on the policy, and the claim is made during an in-force policy (and is not otherwise excluded), the claims-made policy will respond.
^Back to Top
What is my retroactive date?
This date is usually found on the declarations page of a claims-made policy. Each physician and the legal entity will have their own date. Only incidents that occurred after this date and are reported during the in-force policy period (and otherwise not excluded) are covered. (Not to be confused with the effective and expiration dates of the policy itself).
^Back to Top
What is tail coverage? (also known as an Extended Reporting Period Endorsement)
This coverage protects the physician against all claims that arise from professional services performed while the claims-made policy was in effect, but which were reported after the termination of the policy. Some insurers offer this feature free of charge for retiring doctors who meet certain requirements.
^Back to Top
What types of health insurance plans are available?
Insurance companies offer many types of medical plans these days. And the differences are blurring. However, many health plans fall into one of the following types, ranked from less to more "managed care" features.
HMO Plans
In a typical HMO plan, you:
- Need to use HMO providers each time you need care
- Pay a fixed copayment for many plan services
- Don’t have to file claim forms or pay an annual deductible
- Are generally eligible for a wide range of preventive care
- May need to preauthorize certain treatment (such as elective surgery) and/or obtain second opinions
- May receive benefits for care outside the HMO if it’s a real emergency and you follow plan rules
With a typical HMO plan, you name a primary care physician (PCP) for each person you enroll. The PCP coordinates all your medical care. However, in "open access" HMO plans, you may not need to start with your PCP as gatekeeper in order to receive plan benefits.
Health Reimbursement Arrangements (HRAs)
An HRA is an employer owned account used to reimburse employees' qualified medical-related expenses not covered by insurance on a non-taxable basis. HRAs were issued under Treasury and IRS Notice 2002-45 and Revenue Ruling 41.
The rising cost of health care is a concern for most employers. With the addition of an HRA, employers can enhance their benefit package while still achieving their overall corporate goals of lowering health benefit costs or capping costs at their current levels. HRAs allow an employer-funded account to repay the unreimbursed medical expensed of employees and may or may not carry unused funds forward. An HRA account may reimburse any or all the same expenses as a Section 125 Health FSA.
Unlike a Health FSA, where the IRS requires the annual election to be available on the first day of the plan year, only a portion of the HRA limit may be added to each account once per month or pay period. That means no surprised and no big hits to the employer's checkbook. The employer will have less expense each month and only be liable for a small portion of each employee's HRA annual limit.
Health Savings Account with High Deductible Plan (HSAs)
A new type of health care option uses an individual health savings account (HSA) together with a high deductible health pan (HDHP). With this arrangement, you open a tax-sheltered account with contributions from you and /or your employer. You also participate in a high deductible health plan. The high deductible plan is generally a PPO, POS or HMO.
- You use the HSA to pay for medical expenses before other resources are used.
- Once you have met your deductible, the plan begins to pay its share of costs.
- Money in your account rolls over from year to year, so you can accumulate money for the future. The government does, however, set certain limits on eligibility and contributions.
With an HSA, you may find that you feel like you are spending your own money when you obtain medical care. You may “shop around” more, and you may find that as a cash customer you can command some good savings from doctors and hospitals who are tired of waiting for payments from insurance companies.
Indemnity Plans
In a typical indemnity plan, you:
- See any licensed provider for covered services
- Pay 100% of eligible expenses until you meet your annual deductible each year
- Pay a percentage of eligible expenses (splitting costs with the plan) after you meet your annual deductible
- File claim forms and wait to be reimbursed
- May need to preauthorize certain treatment (such as elective surgery) and/or obtain second opinions
- May or may not be covered for preventive care such as physicals, well-baby visits and immunizations
POS and PPO Plans
Both POS and PPO plans provide hybrids between an indemnity plan and an HMO. In a typical POS or PPO plan, you:
- Have a choice of going "in-network" or "out-of-network" each time you need care
- Receive higher plan benefits, don’t have to file claim forms, don’t need to pay an annual deductible, and may be eligible for more preventive care when you go in-network
- Receive lower plan benefits, need to file claim forms, may be eligible for fewer preventive care services, and need to pay 100% of eligible expenses until you meet your annual deductible each year, then split expenses with the plan when you go out-of-network
- May need to preauthorize certain treatment (such as elective surgery) and/or obtain second opinions, especially out-of-network
- May receive in-network levels of benefits for out-of-network care if it’s a real emergency and you follow plan rules
In-network, you may have a fixed copayment for many plan services, or you may pay a percentage of the costs.
With a typical POS plan, you name a primary care physician (PCP) for each person you enroll. The PCP coordinates all in-network medical care. However, in "open access" POS plans and PPO plans, you may not need to start with a gatekeeper to receive the higher level of in-network plan benefits.
^Back to Top
How many employees do I need before I am able to offer a group health insurance plan?
You must have a minimum of 2 employees or owners to qualify for a group health plan (with the exception of the Anthem Association Value Added Program). These 2 people may be:
- Employer and Employee
- Two Partners
- Two Officers of a Corporation.
If you have employees, you will need to provide a copy of your most recent state quarterly wage report. This will be used to verify eligible employees. For partnerships or corporations, you will need a business license, articles of incorporation or other documents that can verify the legitimacy of your business and the participation of all people to be covered under the group health plan.
^Back to Top
What other guidelines must an employer meet in order to offer group health insurance?
General guidelines are:
- The employer must contribute at least 50% of the employee only premium. The employer retains the option to contribute towards the premium for dependents.
- Usually, 75% percent of all eligible employees must enroll under the group plan (Depending on the number of employees).
- An “Eligible Employee” is generally defined as any employee that works 25 or more hours per week for the employer, earning minimum wage, and paid via W-2. Employers have the option to define eligibility, as long as they are in compliance with federal laws and insurance carrier guidelines. If an employee is already covered under another health plan, they may be exempt from the 75% minimum participation guideline.
- Employees may not be denied access to a group health plan due to pre-existing conditions.
^Back to Top
Do I have to offer COBRA to terminating employees or their dependents?
COBRA requires that group health plans sponsored by employers with 20 or more employees (includes full and part-time) in the prior year, offer employees and their families the opportunity for a temporary extension of health coverage. Group health coverage can be extended for 18, 29 or 36 months depending on the qualifying event.
For additional information about COBRA requirements and other Department of Labor (DOL) regulations, refer to http://www.dol.gov/.
^Back to Top
I have an employee out on disability. How long am I required to keep him/her on the health insurance policy?
An ineligible employee is defined as one out on Long-Term Disability, someone who has not worked for six months due to illness or injury or three months due to leave of absence, or an employee not scheduled to return to work.
^Back to Top
What qualifies as creditable coverage?
Creditable coverage, as defined under federal HIPAA guidelines, is considered as: group health plan coverage (including a governmental or church plan), group or individual health insurance coverage, Medicare, Medicaid, military-sponsored health care (CHAMPUS), a program of the Indian Health Service, a state health benefits risk pool, the FEHBP, a public health plan as defined in the federal HIPAA regulations, and any health benefits plan under section 5(e) of the Peace Corps Act. Not included as creditable coverage is any coverage that is exempt from the law; for example, dental-only coverage, or dental coverage that is provided in a separate policy or even in the same policy as medical, if such coverage is separately elected and results in additional premium.
^Back to Top
How does an employer or insurance carrier know that an employee had prior group coverage?
The employee must provide proof of prior creditable coverage by presenting a Certification of Prior Group Health Plan Coverage, or other acceptable means of proof. This documentation can be obtained by contacting the former employer and/ or insurance carrier.
^Back to Top
What is the difference between a referral and pre-authorization?
A plan participating PCP will issue a referral to a participating specialist when a covered member needs specialist care. Pre-authorization is when the health plan’s medical care management department has given authorization to a provider that a procedure or treatment is listed as a covered benefit and is deemed medically necessary. Pre-authorization does not guarantee payment.
^Back to Top
What is a "C" Corporation?
A corporation, also known as a C corporation, is an entity with a legal existence apart from its owners. A special type of corporation, a professional corporation (PC), can be organized to perform certain professional services.
^Back to Top
What is a "S" Corporation?
An S corporation is a hybrid of a partnership and corporation that offers tax advantages to the corporation’s shareholders while giving protection against personal liability.
^Back to Top