Page 13 - 2016 Enrollment
P. 13
Insurance Terms 101
Coinsurance
- each plan pays a percentage of covered expenses, and you pay the remaining portion of the cost not covered by the
plan; the percentage paid pay you is called the coinsurance.
Deductible
- the amount of money you must pay before the plan begins paying benefits. There are several commonly received
services for which the deductible does not apply. For example, if you have a routine physical or fill preventive
prescription drugs at an in-network provider, you do not pay any portion of the charges.
Health Savings Account (HSA)
- a savings account offered in conjunction with a CDHP (medical plan); funds directed to the HSA are pretax dollars,
thus reducing taxable income; an HSA can be used for deductibles, coinsurance, prescriptions, dental, vision, and other
qualified healthcare expenses not covered by the plan.
In-Network
- refers to providers that have agreed to charge plan participants a pre-negotiated discounted rate for services and
treatment; when you go to an In-Network provider, the plan will generally pay a higher level of benefits resulting in
lower out-of-pocket costs.
Out-of-Network
- refers to the providers who are not members of the plan network; when you utilize an out-of-network provider, you
will generally incur higher out-of-pocket costs.
Out-of-Pocket Maximum
- The out-of-pocket maximum is designed to protect you in the event of a catastrophic illness or injury. After you have
paid the specified out-of-pocket amount during a calendar year, the plan pays the remaining covered services at 100
percent. Note the copayments and other specified charges are not included in the out-of pocket maximum.
The Embedded Rule
- Plans (including self-funded plans) will now have to have embedded out-of-pocket limits for each individual covered under family coverage. For
example, using the 2016 limits, if a family plan has an annual out-of-pocket limit of $10,000 and one family member incurs an expense of $20,000,
that family member would be responsible for expenses up to $6,850 (the self-only out-of-pocket limit), and the remaining $13,150 would be paid
in full by the plan. Additional expenses incurred by that family member would be paid by the plan with no cost sharing for the remainder of the
plan year. Although it is not stated expressly in the preamble, the other family members (or a single family member) should be responsible for the
remaining $3,150 of expenses under the family cap of $10,000. Of course, after the family group reaches the $10,000 out-of-pocket limit, the group
has no further cost sharing for the rest of the plan year.
2016 - 17 Benefits
Coinsurance
- each plan pays a percentage of covered expenses, and you pay the remaining portion of the cost not covered by the
plan; the percentage paid pay you is called the coinsurance.
Deductible
- the amount of money you must pay before the plan begins paying benefits. There are several commonly received
services for which the deductible does not apply. For example, if you have a routine physical or fill preventive
prescription drugs at an in-network provider, you do not pay any portion of the charges.
Health Savings Account (HSA)
- a savings account offered in conjunction with a CDHP (medical plan); funds directed to the HSA are pretax dollars,
thus reducing taxable income; an HSA can be used for deductibles, coinsurance, prescriptions, dental, vision, and other
qualified healthcare expenses not covered by the plan.
In-Network
- refers to providers that have agreed to charge plan participants a pre-negotiated discounted rate for services and
treatment; when you go to an In-Network provider, the plan will generally pay a higher level of benefits resulting in
lower out-of-pocket costs.
Out-of-Network
- refers to the providers who are not members of the plan network; when you utilize an out-of-network provider, you
will generally incur higher out-of-pocket costs.
Out-of-Pocket Maximum
- The out-of-pocket maximum is designed to protect you in the event of a catastrophic illness or injury. After you have
paid the specified out-of-pocket amount during a calendar year, the plan pays the remaining covered services at 100
percent. Note the copayments and other specified charges are not included in the out-of pocket maximum.
The Embedded Rule
- Plans (including self-funded plans) will now have to have embedded out-of-pocket limits for each individual covered under family coverage. For
example, using the 2016 limits, if a family plan has an annual out-of-pocket limit of $10,000 and one family member incurs an expense of $20,000,
that family member would be responsible for expenses up to $6,850 (the self-only out-of-pocket limit), and the remaining $13,150 would be paid
in full by the plan. Additional expenses incurred by that family member would be paid by the plan with no cost sharing for the remainder of the
plan year. Although it is not stated expressly in the preamble, the other family members (or a single family member) should be responsible for the
remaining $3,150 of expenses under the family cap of $10,000. Of course, after the family group reaches the $10,000 out-of-pocket limit, the group
has no further cost sharing for the rest of the plan year.
2016 - 17 Benefits
