GAP Insurance FAQs
Frequently Asked Questions
The benefits provided by GAP insurance will help you pay for out-of-pocket expenses you might be responsible for due to a hospital confinement or due to most out-patient procedures. For an expense to be eligible, it must meet three criteria:
1. First, it must be medically necessary for the treatment of an injury or a sickness. Expenses resulting from voluntary or elective surgeries, procedures or expenses due to wellness or preventive care, and those expenses designated as physician office visit expenses are not covered.
2. Second, the expense must be covered by your major medical plan and must have been applied towards your deductible or coinsurance provision under that plan. If an expense or procedure is not covered by your major medical plan, it will not be an eligible expense under your GAP plan. If an expense or procedure is covered by your major medical plan, but the charges for such are not applied to your deductible or coinsurance provision, it will not be an eligible expense under your GAP plan.
3. Third, the expense must be incurred while the GAP coverage is in force.
A major medical plan must be a group medical plan (whether a fully insured plan or an employer sponsored self-funded plan) that provides benefits for hospital confinements and requires you to pay a deductible and/or portion of coinsurance. A major medical plan does not include Medicare, Medicaid or government sponsored programs not typically considered major medical coverage (such as, but not limited to, veterans’ benefits, etc.)
Employers choose the benefits and plan structure along with the assistance of insurance professionals. The insurance professional should have reviewed and analyzed your major medical plan coverage and its associated costs, to determine the most effective GAP plan(s) available.
Each covered person has a maximum out-patient benefit per calendar year subject to a maximum benefit for all covered persons within a family unit that is equal to two (2) or three (3) times the individual out-patient benefit maximum. This feature is determined by the plan design the employer and the insurance professional choose. This family maximum applies to the entire family unit, regardless of the number of covered persons within the family unit, however, in no event will the maximum calendar year out-patient benefit for any one person exceed the individual maximum. For example, if you have a $2,000 individual Out-Patient Benefit with a 2x family limit and elect dependent coverage, the total out-patient benefit available to the entire family unit is $4,000. Under this scenario, if you accrue $2,500 in eligible outpatient expenses in a calendar year, then the Out-Patient 2 Benefit would cap for you at $2,000 for the calendar year and any out-of-pocket expenses you have above that cap would be your responsibility. Your dependents, though, would still have $2,000 available to them for eligible out-patient expenses which could be applied to charges for one specific dependent or applied to charges incurred by several dependents.
Most major medical plans offer reasonably low co-pays for physician office visits, as well as some type of benefit for wellness/preventive care. In determining the most cost-effective GAP plan to offer to employees, from both a benefit and cost perspective, your employer would have taken this into consideration. There is an optional benefit that would allow limited coverage for Physician Office visit charges, but there is an additional premium associated with this benefit. If your employer purchased this benefit, office visits would be considered by your GAP insurance. This benefit is expensive, and some employers prefer to offer $0 Co-Pay Telemedicine as an alternative. Telemedicine is much less expensive, and it can lower utilization on the GAP insurance and the primary major medical insurance plan.
Upon acceptance of your employer group, the third-party administrator will issue you a certificate of insurance, outlining the plan benefits, terms, conditions and limitations. An ID card that you can present to providers at the time of service is also issued. Both the ID card and certificate of insurance are sent to your employer, usually to a designated HR staff member, for distribution to you. For a new group, this process can take 10-15 business days. For new enrollees within an existing group, certificates and ID cards are usually handled within 5-10 business days. If you need to see a doctor before you receive your ID card, you can contact the Customer Service Department of your third-party administrator with your provider’s name, address and phone number. Simply explain the situation to the representative and he/she can contact the provider on your behalf to explain the GAP plan.
Yes, you will need to carry your primary major medical card and your GAP insurance card. When you check in with the receptionist, or a kiosk, at the Doctor’s office, it is the employee’s responsibility to let them know that you have new GAP, or Secondary Insurance.
The overwhelming majority of claims are now paid by the GAP insurance provider directly to the medical care provider. In most instances the employee does not need to pay the bill and apply for reimbursement. There are still some medical care providers that do not accept GAP insurance, but they are rare now. Most providers, if they will file for insurance benefits from more than one carrier, should accept your GAP card reducing, if not eliminating, their requirement that you pay for services up front.
Enrollment in the GAP plan follows those guidelines established for enrollment in your group major medical plan. If you do not elect to enroll in the GAP plan when it is first made available to you, you will not be able to enroll in it until the next allowable period of open enrollment, unless you qualify by law as a “special enrollee” due to certain qualifying events. Whether or not, or for how long, you might be paying for coverage that might not be available in this situation, is dependent upon what point in the calendar year you met your deductible and coinsurance maximum and when the next period of open enrollment comes around.
No, if an employee is not covered under the group major medical plan, they are generally not eligible to participate in the GAP plan
For an expense to be eligible under GAP, it must be covered by your major medical plan. If an expense is denied by your major medical plan but would otherwise have been an eligible expense under GAP, it will not be covered by GAP. A couple of simple examples to illustrate this are:
1. Your major medical plan limits diagnostic testing to a maximum of $500 and does not cover testing in excess of this amount. If you incur diagnostic testing expenses in the amount of $750 due to an illness or injury, and your major medical plan pays $500, the remaining $250 would not be reimbursable or payable by GAP because it would be denied under the major medical insurance plan. 2. Your major medical plan has a pre-existing limitation provision and denies benefits because you were not able to show proof of creditable coverage. Those expenses that were denied would be ineligible under GAP.
1. Expenses that are not medically necessary and do not result from the treatment of an illness or an injury; 2. Physician office visit charges, unless the Physician Office Visit benefit has been purchased; 3. Expenses related to wellness or preventive medicine; 4. Confinement or other covered treatment for Dental or Vision care that is not related to an accidental injury.
Generally, expenses related to the treatment of mental or nervous disorders and the expenses related to treatment of alcoholism, drug addiction, or complications thereof are not covered by most GAP plans. It can be covered by carriers or can be covered by optional rider by some carriers. This is not a complete list of exclusions under the GAP plan. For a full list of exclusions, terms and conditions, you should refer to your certificate of insurance.
If an employee has already met their deductible with an existing GAP plan or their major medical plan, they will stay have to pay a deductible if it is a new GAP plan. The deductible on a GAP plan will start on the effective date of the GAP plan the first year. After the first year, it will reset as a calendar year deductible.