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What is a policyholder for health insurance?

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A brief overview...
  • The policyholder is the only individual that can initiate, make changes to or cancel a health insurance policy
  • If you start a health insurance policy in your name, you are the policyholder
  • If you have health insurance through a group plan, the group plan administrator is the policyholder
  • If you are insured through the health insurance plan of a parent, that parent is the policyholder
  • If you have health insurance through a policy owned by any other party, you are simply a member
  • A member can make limited selections or choices in level of protection to the offered coverage, but only the policyholder can make changes, additions or deletions of coverage

A health insurance policy is a contract agreement made between an insurer (insurance company) and the insured (policyholder). The contract will contain specific legal language that offers to cover a certain amount of medical expenses in exchange for a monthly premium. The details of each policy can vary and the amount of premium, copay, deductible, and out-of-pocket required varies by a number of factors.

The details of each policy can vary and the amount of premium, copay, deductible and out-of-pocket required varies by a number of factors. The policyholder is the individual or business that has signed to be the financially responsible party for the contract.

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Insured as the Policyholder

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When you make contact with an insurance company, find a healthcare plan that fits your budget and pay the premium you are considered the policyholder, or owner of the policy. You have the full right and privilege to change the policy terms, add additional coverage and individuals, delete certain coverage and individuals or cancel the policy in whole. You are authorized to do this at any time, since you are the responsible party on the paperwork.

Any type of changes made are subject to price differences on the premiums, copay, deductible and annual out-of-pocket amounts. Other members included in coverage will NOT be able to make changes to the policy. Any desired change will have to be filtered through the individual that signed the contract.

Group Insurance Coverage

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Employers and other types of organizations that offer health insurance are able to get a policy with better rates than individuals. This “wholesale” purchase of health insurance allows an insurer a better bargaining position in getting the best rates available. There is generally one person designated to “call the shots” on the coverage. A health insurance administrator will act as the go-between for covered employees and the business or organization.

As a member of a group insurance policy there will be choices offered for different levels of coverage, but you will not be able to initiate any changes without the help of the administrator, or designated party for the policyholder. This person will then contact the insurer to make any needed changes or updates.

Parents as the Policyholder

All children, including adult children to age 26, are considered dependents. They can be added to an existing policy owned by the parents, but only during open enrollment times. The child will not be able to make any changes to the policy. Everything administrative will have to be done by the parent that has signed the contract for health insurance coverage.

Other Designated Policyholders

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There are a variety of ways that health insurance can be provided to large numbers of individuals through organizations and employers. Below are a few of the options available:

  • Association group for employers
  • Association trust for employers
  • Multiple employer trust
  • Single employer group
  • Self-insured excess stop-loss self-funded
  • Self-insured excess stop-loss self-insured plans
  • Self-insured excess stop-loss managed care

Larger companies with multiple locations will generally have one person designated to handle the insurance at each location. There will be one main administrator that signs as the policyholder.

What are the rights of a policyholder vs. a member?

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The amount of members a particular business or organization can offer up to potential insurers will help determine what the premiums will be. The more people there are, the better the rates will be. This gives a lot of collective bargaining power to the company that will be the policyholder. In the case of an individual getting coverage for a family, the head of house usually signs on as the policyholder.

The policyholder holds all of the power to start, stop and change coverage. Members are able to access healthcare options offered and can pick and choose from a few details, but the general policy can only be changed through the policyholder.

What this means is that the policyholder sets the standards for what services can and cannot be offered to individual members. If dental and eye care are too expensive, you may find that the policyholder passes on those options. Members will not be able to request this once the policyholder denies that type of coverage.

Members will typically have some choice on deductible amounts, out-of-pocket limits, and whether to add dependents.

The policyholder for a health insurance plan holds a powerful and important position. They determine the level and choices of care that individuals and families are allowed to get through the policy. They initiate, negotiate and get the contract signed so that everyone has access to healthcare as affordably as possible. They are charged with making sure all premiums are paid timely to avoid a lapse in policy.

The policyholder can and will act as the voice for all insured under the policy. This is the person you will direct any questions and concerns to about the existing health insurance plan. Click here to compare online health insurance quotes for free!

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