What is Commercial Insurance?

August 20, 2021

commercial insurance

There are many insurance companies that belong to the private sector offering several different levels of coverage to members, that range from point-of-service groups to whole health maintenance organizations. You may already be familiar with many of the insurance companies. How can you not? The insurance industry invests heavily in their PR and marketing campaigns, splattering their names on billboards and your TV.

Commercial Insurance

These commercial insurance companies offer plans to patients and employers both, with exclusive provider options, such as ultra-specific plans, high deductible plans, and discount plans. During the claim process, all these plans come into play no matter what the situation. So what is Commercial Insurance? Read on to find out.

Commercial Insurance:

Commercial health insurance, basically, is health insurance that is administered and provided by non-government bodies. It covers disability income as well as all medical expenses incurred during clinical care.

Generally, brokers and licensed agents go around selling the different plans to individuals as well as organizations. Moreover, patients/customers can also reach out directly to the insurance vendor to seek out the insurance plan that suits them best.

The term “commercial” distinguishes these types of policies from insurance that’s provided by a public or government program, such as Medicaid, Medicare, or State Children’s Health Insurance Program (CHIP). In broad terms, any type of health insurance coverage that isn’t provided or maintained by a government-run program can be considered a type of commercial insurance.

Commercial Insurance Types:

There are numerous types of commercial health insurance available today, with varying options, policies, and differences between each. However, it is possible to opt for one or more types and combine them in a way to meet requirements. Here are some of the most common commercial insurance types that you can get:

Health Maintenance Organization:

Health maintenance organizations or HMOs require you to choose a primary care physician in their network. For any health issue, apart from emergencies,

You will have to go to the same PCP for treatment unless there is a case for which the PCP refers to a specialist in the same network. Due to the limitations, HMOs have the lowest premiums and cost and the monthly payments can vary depending on the plan selected.

Preferred Provider Organization:

Similar to HMOs, preferred provider organizations also have a network of healthcare physicians but insurers are given more flexibility and freedom. Consulting a doctor from within the company’s network will incur lower costs from the pocket since the majority portion will be covered. If the services are given by a physician who is outside the network, there will still be some coverage, but you may have to pay more out of your pocket.

Exclusive Provider Organizations:

Exclusive Provider Organizations or EPOs are best suited for young and healthy people since the options are limited to only a primary care physician. There is no out-of-network coverage of any kind, which makes EPO plans less expensive than most PPO and HMO plans.

Point-of-Service Plan:

This is a combination of PPO and HMO plans. A PCP is assigned to you who belongs to the company’s network and can refer you to a specialist within the network. You can go to an out-of-network doctor but the coverage will be less.

Commercial Insurance Policies:

There’s a variety of commercial insurers to choose from, and each entity offers varying policies that one can opt for. Describing each and every policy would not be possible to include this in this article, but there are a few key points that you need to understand before making a decision:

Premiums: This is the amount that a business pays for insurance coverage. Depending on external factors such as the business type, years in business, payroll, risk factors, the premium amount is defined.

Deductibles: The amount that is paid by the insured excluding the amount that the insurance company will bear, amount to deductibles. Having a high deductible insurance policy might mean that you pay less for the policy on a monthly basis, but more in the case of an accident.

Exclusions: These are the services or products that are not covered by the insurance company. Having beforehand knowledge about exclusions in your specific policy is important to understand the right policy for your business.

Policy limits: Policy limits define the caps regarding how much the insurance company will cover the claim amount in certain scenarios. Even if you meet the deductibles, the policy limit would allow you to pay a certain amount depending on what’s written in the policy.

Medicare Vs Commercial Insurance:

Medicare is a federally administered insurance program that Americans pay through their lifetime that enrolls them to benefits after they retire or in case of a serious medical condition that is disabling. Through Medicare, a pool of wealth is collected from all Americans and helps protect the old and disabled population. The program helps cover the expenses incurred during clinical care and only denies claims which are labeled as unnecessary care.

On the other hand, commercial insurances have a completely different mandate. The fundamental purpose is to commercialize insurance, by receiving premiums that keep the administrative wheels running as well as to pay for the healthcare of their enrollees. The main idea is to avoid risk, so to keep things rewarding for themselves, they try to avoid enrollees who are already sick or who are likely to become sick and those with a low income.

What is Commercial Vehicle Insurance?

Commercial insurance is not limited to health only. In fact, there are a large number of policies and plans that cover vehicles used for business purposes including cars, vans, and commercial truck insurance. Depending on the plan, the vehicle insurance can cover vehicle damage, driver injuries, damage to another person or property, or all three.

Vehicle Insurance

One of the most sought out vehicle insurance is through GEICO commercial insurance. The company has been around for more than 70 years and takes pride in its services to major businesses.

Commercial auto policies tend to have higher coverage limits than personal policies because business vehicles need more protection in case of accidents.

Bottom-line:

No matter which plan or policy you opt for, you need to carefully analyze the inclusions by the particular insurance provider. For that purpose, one of the primary priorities when selecting a commercial insurance plan is to check which products and services are being covered in the contract, the eccentricities in the plan, as well as the reimbursement associated with each service.

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