What is a Gap Plan ?
Mini-Medical plans, also known as Gap Plan , Gap Plan or Limited Medical Benefit Plans offer a viable low cost alternative to expensive, comprehensive major medical insurance. Gap Plan are scaled down versions of major medical plans. They can be offered to employers and also to individuals through trade association Gap Plan . Such Gap Plan designs may be used as either primary insurance or supplemental (gap) coverage. Unlike comprehensive major medical insurance many Gap Plan designs do not base their benefits on actual charges incurred and actually pay based on a fixed benefit indemnity amount when various health care services are utilized. There are some expense incurred “copay” plans that do pay based on actual expenses incurred and do not pay based on indemnity benefits.
Why offer a Limited Medical Plan?
Many employers offer a limited medical plan to employees because the majority of their employees will have no major claims and most employees will find that the limited medical plan takes care of their healthcare needs.
Below are some statistics that really support implementing a limited medical plan:
Benefits Offered in a Limited Medical Plan:
Different Types of Gap Plan or Limited Medical Plan?
There are many different types of Gap Plan . There are two types of Gap Plan called either an indemnity limited medical plan or a expense incurred limited medical plan (expense incurred Gap Plan are sometimes referred to as limited medical copay plans)
You can see a sample comparison at (put link here for mini-medical vs. limited medical page).
Evaluating a Gap Plan or Limited Medical Plan?
When evaluating a Gap Plan it is very important to examine the different elements of different Gap Plan . For example, an insurance agent or employer should evaluate the pre-existing condition limitations of the plan, the exclusions and limitations within the plan document or insurance contract and the limitations with deductibles, co-insurance and/or indemnity benefits. On the face of it a limited medical plan may look very attractive, but when you peel back the onion you may find many hidden exclusions and limitations. It is imperative to read the insurance contract or plan document provided by each limited medical insurance carrier.
What are the Target Market and Industries to offer a Limited Medical Plan?
Target Market is:
Gap Plans are a breakthrough in the health insurance industry for the cost conscious employer. They are an innovative new concept of offering limited health benefits to blue collar, part-time and hourly employees, independent contractors and even companies canceling their major medical insurance in favor of additional savings. This is one of the fastest growing component to the insurance industry. Gap Plan can also be offered to individuals whether employed or not, depending on the limited medical insurance carrier and the Gap Plan offered. Gap Plan are a threshold, base health policy that has caps on all benefits and annual maximums on all benefits and which pays only Gap Plan. These types of plans pay for nothing or offer Gap Plan for catastrophic conditions and are not liable for catastrophic losses as a major medical plan. Gap Plan are not designed to cover such conditions as HIV, cancer, pregnancy or any major condition. Gap Plan are limited risk and liability plans. They are not major medical insurance, but are a supplemental health plan, usually filed as a hospital indemnity plan.
Why aren’t Major Medical Plans an Option for people who enroll in a limited medical plan?
Major medical plans are too expensive for the targeted employee who would typically enroll in a limited medical plan. As already stated many employers are pushing the additional costs and rate increases for benefits onto their employees. Costs for the employee alone can be as high as $4,800 a year for an individual for an employer who does not contribute to coverage and over $15,000 a year for the employee for family coverage alone. These high costs are too expensive and this is why Limited Medical Benefits are extremely attractive since they can cost as little as $40.00 per employee per month.
Limited Medical Industry and Insurance Carriers?:
The limited medical plan industry is the fastest growing industry in group insurance today, with over 30 limited medical plan insurance carriers in the marketplace and thousands of insurance agents and employers offering Gap Plan . Each year new limited medical plan insurance carriers enter the marketplace.
PPO Networks and Gap Plan
It is very important to make sure you have the right PPO network implemented with your limited medical plan. Some Gap Plan have major medical PPO networks offering the most substantial discounts at doctors offices and hospitals while other Gap Plan have discount card PPO networks which have a smaller medical network and smaller discounts. Also, there are major differences between major medical PPO networks, where some offer greater discounts in certain regions and areas, while others may offer the best coverage in the form of the most providers participating in that specific network in that specific region or area. It is important to choose your limited medical plan PPO network wisely, as you may find that there is no coverage in a specific area or region or very small discounts.
A limited medical plan is also known as a mini-medical plan, limited medical plan, Gap Plan plan, Gap Plan , or limited medical benefit program, limited medical program, or a Gap Plan.
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