Commercial Plans

A commercial plan is a health insurance plan which is offered and administered by non-governmental entities (i.e. insurance companies). It can cover medical or dental expenses and disability income for the insured. Two of the most popular types of commercial health insurance plans are:

  • Preferred Provider Organization (PPO) - A Preferred Provider Organization (PPO) is a medical care arrangement in which medical professionals and facilities provide services to subscribed clients at reduced rates.

  • Health Maintenance Organization (HMO) - A Health Maintenance Organization (HMO) is an insurance structure that provides coverage through a network of physicians at a fixed annual fee.

A commercial health insurance plan can be offered to the individual or group customers. Usually, the insurance companies design special commercial health plans for fully-insured group customers and provide cost-effective health coverage for the employees and their family members (at an additional cost).

The system enables you to create and edit a policy plan from the user interface or through a health care inbound message. While creating a Commercial policy plan, you must set the benefit type to Commercial. While defining a Commercial policy plan, you need to specify either a price item or at least one pricing rule type. The price item given in the policy plan is used to create a pass-through billable charge for pre-calculated premium amount which is received through a health care inbound message.

Alternatively, you can associate a pricing rule type with a policy plan. You can associate the age based, tier based, pass-through billable charge, and/or additional fee pricing rule types with a Commercial policy plan. If you associate an age based pricing rule type with the policy plan, the system calculates the active employee coverage or COBRA membership premium for eligible members using the age based pricing rule type. If you associate a tier based pricing rule type with the policy plan, the system calculates the active employee coverage or COBRA membership premium using the tier based pricing rule type. The active employee coverage and COBRA membership premium are then charged through the SQI based billable charges. In case of an active employee coverage membership, the charge is billed to the bill group of the fully-insured group customer. However, in case of a COBRA membership, the charge is billed to either of the following depending on the billing arrangement which is defined for the COBRA membership:

  • Bill Group of the Fully-Insured Group Customer

  • TPA Person

  • Financially Responsible Member Person

If you associate an additional fee pricing rule type (which is a related pricing rule type) with the policy plan, the system derives the flat or percentage based additional fee for the COBRA membership using the additional fee pricing rule type. This additional fee is charged along with the COBRA membership premium through an SQI based billable charge

If you associate a pass-through billable charge pricing rule type with the policy plan, the system creates an SQI based billable charge using the pass-through billable charge pricing rule type whenever the price item information is given, but the account information is not given in a health care inbound message. Note that if both the price item and account details are given in the billable charge information of a health care inbound message, the system directly creates the SQI based billable charge for the pre-calculated premium and does not refer to the pass-through billable charge pricing rule type which is associated with the policy plan.

The system enables you to prorate the membership premium using the proration rules defined for the fully-insured group policy plan. A proration rule indicates how you want to prorate the membership premium on various events, such as enrollment, termination, etc. For more information, refer to Premium Proration Rules.