Health insurance

Health insurance or medical insurance (also known as medical aid in South Africa) is a type of insurance that covers the whole or a part of the risk of a person incurring medical expenses. As with other types of insurance, risk is shared among many individuals. By estimating the overall risk of health risk and health system expenses over the risk pool, an insurer can develop a routine finance structure, such as a monthly premium or payroll tax, to provide the money to pay for the health care benefits specified in the insurance agreement. The benefit is administered by a central organization, such as a government agency, private business, or not-for-profit entity. According to the Health Insurance Association of America, health insurance is defined as "coverage that provides for the payments of benefits as a result of sickness or injury. It includes insurance for losses from accident, medical expense, disability, or accidental death and dismemberment". A health insurance policy is an insurance contract between an insurance provider (e.g. an insurance company or a government) and an individual or his/her sponsor (that is an employer or a community organization). The contract can be renewable (annually, monthly) or lifelong in the case of private insurance. It can also be mandatory for all citizens in the case of national plans. The type and amount of health care costs that will be covered by the health insurance provider are specified in writing, in a member contract or "Evidence of Coverage" booklet for private insurance, or in a national health policy for public insurance.

Funding and obligations

There are two types of health insurance – taxpayer-funded and private-funded. An example of a private-funded insurance plan includes an employer-sponsored self-funded ERISA (Employee Retirement Income Security Act of 1974) plan. Typically, these companies promote themselves as having ties to major insurance providers. However, in the context of an ERISA plan, these insurance companies do not actively participate in insurance practices; instead, they handle administrative tasks. Consequently, ERISA plans are exempt from state regulations and fall under federal jurisdiction, overseen by the US Department of Labor (USDOL). Specific details about benefits or coverage can be found in the Summary Plan Description (SPD). Should there be a need for an appeal, the process typically involves initiating it through the insurance company and then reaching out to the Employer's Plan Fiduciary. If a resolution is still not achieved, the decision can be escalated to the USDOL for review to ensure compliance with ERISA regulations, and, if necessary, legal action can be taken by filing a lawsuit in federal court. Health insurance can be combined with publicly funded health care and medical savings accounts. The individual insured person's obligations may take several forms:

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