Knowing what your plan covers, what your out-of-pocket responsibilities are, and how to navigate benefits ensures you can access the right services when you need them.
What is a premium?
A premium is the amount you pay for your health insurance every month. It keeps your insurance active and helps cover the cost of services included in your plan – like preventive services.
What is in-network vs out-of-network?
A network is a group of healthcare providers. In-network means that your healthcare provider signed an agreement with your health insurance carrier to accept a discounted rate. Out-of-network means that there’s no signed agreement in place and your insurer is charged the full price, raising your expenses as well.
How do you find in-network providers?
It’s a good idea to verify participating providers directly with your insurance company before you schedule a healthcare service. Here are a few suggested websites to help you search for in-network providers:
Your insurance company’s website: Your insurance company most likely has a list of providers operating in-network.
Your healthcare provider’s website: Likewise, healthcare providers often include a list of participating insurance plans on their website.
Why would someone choose to use an out-of-network provider?
There can be situations when an individual chooses to use an out-of-network insurance provider, even if it’s not the most cost-effective option. Here are a few examples of when that may be preferable:
Specialized expertise: An out-of-network provider may have unique skills and experience treating a specific condition or performing a certain procedure. Opting for this service could ensure you receive the best possible care for your needs.
Geographic accessibility: In rural or remote areas, there may be limited options for in-network providers. You may need to use an out-of-network provider to receive timely and convenient care.
Continuity of care: You may want to continue seeing a healthcare provider that you have an established relationship with, even if they’re no longer within your network. This can be particularly beneficial if you’re managing a long-term medical condition.
What is a deductible?
Your deductible is the amount of money you pay each year for covered healthcare services before your health insurance plan begins to pay.
A deductible excludes certain preventive services that may be 100% covered, such as annual check-ups, some lab tests, flu shots, and some other vaccinations, and routine screenings like a mammogram and a colonoscopy.
How do you reach your out-of-pocket maximum?
The out-of-pocket maximum is the most you have to pay for covered services in a plan year.
Co-payments: Fixed dollar amounts of covered healthcare usually due at time of service. Your insurance plan determines the price of your co-pay and whether it’s owed before or after you meet your deductible.
Co-insurance: Once you meet your deductible, your health insurance plan kicks in to share costs with you. This is co-insurance. Typical co-insurance ranges from 20-40% for the member, with your health insurance paying the rest.
The out-of-pocket limit does not include:
- Your monthly premiums
- Anything you spend for services your plan doesn’t cover
- Out-of-network care and services
- Costs above the allowed amount for a service that a provider may charge
After you spend the out-of-pocket maximum amount on deductibles, co-payments, and co-insurance for in-network care and services, your health plan pays 100% of the costs of covered benefits.
What are coordination of benefits?
Coordination of benefits (COB) is the process insurance companies use to determine how to cover your medical expenses when you’re covered by more than one health insurance plan. It clarifies who pays what by determining which plan is the primary payer and which is secondary. It also ensures proper claim processing and helps avoid overpayment or duplicate payments.
Coordination of benefits rules
COB rules help organize and manage healthcare benefits and costs. Keep in mind that COB rules can vary depending on several factors, including the insurance company, the specific insurance plans involved, and the state you live in. Refer to the plan rules outlined in your policy and consult with your providers.
In general, the following COB rules will typically apply.
- Policyholder or dependent rule
The plan for which you are enrolled as an employee or main policyholder will be the primary payer. The plan for which you’re enrolled as a dependent, such as a spouse’s plan, would be the secondary payer. - Birthday rule
This rule determines the order of coverage for children when both parents have health insurance. It places primary responsibility on the parent whose birthday falls earlier in the calendar year. The plan of the parent with the later birthday would have secondary responsibility. - Custodial parent rule
If parents are divorced or separated, the primary payer for dependent children would be the parent with child custody. However, if parents share joint custody, the order of benefits will typically follow the birthday rule. - Continuation coverage rule
If you have continuation coverage — such as the Consolidated Omnibus Budget Reconciliation Act (COBRA) — and coverage from another plan, the benefits of the plan covering you as a member or employee are primary. Your continuation coverage would be secondary. - Medicaid and Medicare rule
Let’s say you have coverage under a government program like Medicaid and Medicare in addition to other health or drug coverage. In that case, determining primary or secondary responsibility will depend on a number of factors. Factors can include your age, the size of the company you have employer coverage with, and other considerations. Check your insurance policy and coverage details or consult with your employer to determine what the order of coverage should be. - Timeline rule
If none of the above provisions determines which plan is primary, then the plan you’ve been enrolled in the longest is typically considered the primary one.