Health care services and their associated fees can vary greatly, depending largely on the insurance provider and type of policy.
Understanding health insurance can be difficult, especially when you have to make decisions about health insurance for employees of your business. Understanding key terms will allow you to educate your employees about their benefits and save them from any surprises when they utilize their healthcare benefits.
Whether you’re a small, mid-size, or large organization, selecting a healthcare plan should not be taken lightly. Doeren Mayhew Insurance Group has a dedicated group employee benefits team to ensure employers fully comprehend their health insurance plan and what their employees can expect to pay for certain services or procedures.
Read below for clarification between deductibles, copays, and coinsurance to assist in selecting the best option for your business. Then, once you’re ready to implement a plan of your own, contact one of our employee benefits experts to assist with implementation.
Deductibles
A deductible refers to the fixed amount of money an individual is responsible for paying before taking advantage of the full benefits included in their health insurance policy. Typically set as a specific dollar amount, a larger deductible generally allows for lower out-of-pocket costs in monthly premiums.
In order to meet their deductible, patients are responsible for paying out-of-pocket for their health services. Once the deductible has been met, the health insurance plan covers remaining costs according to the contracted percentage and benefits inclusions.
Copays
Unlike a deductible, which is a singular annual dollar amount to reach, a copay is a flat fee that a patient pays at the time of a medical service or for a prescription. A person’s specific copay will be determined by their carrier and specific plan, and will likely be different depending on the type of visit or prescription. As long as a patient stays “in-network,” the copay should remain the same, regardless of the total cost of service.
Coinsurance
Once a patient has met their deductible, coinsurance begins to assist with coverage. Coinsurance requires the patient to pay a percentage of healthcare expenses, as specified in their particular plan, and the insurer pays the remaining balance. Sometimes, the health insurance company is able to negotiate a discounted rate for an in-network health provider, and in this case, the patient generally pays the coinsurance percentage of that discounted rate.
Planning employee benefits and group health plans is complicated. Doeren Mayhew Insurance Group specializes in assisting business owners with designing and implementing plans that fit their particular needs and budget. Schedule a consultation with our Group Employee Benefits Team to get started.