Your share of the cost of a covered health care service, calculated as a percent (for example, 20%) of the allowed amount for the service, typically after you meet your deductible. For instance, if your plan’s allowed amount for an office visit is $100 and you’ve met your deductible (but haven’t yet met your out-of-pocket maximum), your coinsurance payment of 20% would be $20. Your plan sponsor or employer would pay the rest of the allowed amount.
The fixed amount, as determined by your insurance plan, you pay for health care services received.
The amount you owe for health care services before your health insurance or plan sponsor (employer) begins to pay its portion. For example, if your deductible is $1,000, your plan does not pay anything until you’ve met your $1,000 deductible for covered health care services. This deductible may not apply to all services, including preventive care.
The biweekly amount you pay for your insurance coverage.
EXPLANATION OF BENEFITS
A statement sent by your insurance carrier that explains which procedures and services were provided, how much they cost, what portion of the claim was paid by the plan, and what portion is your liability, in addition to how you can appeal the insurer’s decision. These statements are also posted on the carrier’s website for your review.
FLEXIBLE SPENDING ACCOUNTS (FSAS)
An option that allows participants to set aside pre-tax dollars to pay for certain qualified expenses during a specific time period (usually a 12-month period). There are two types of FSAs: The Health Care FSA and the Dependent Care FSA. Please note: You cannot participate in both an HSA and Health Care FSA.
· Health Care FSA – With the Health Care FSA, participants can use their accounts to cover eligible medical expenses such as copays, eye exams, prescriptions and more. All expenses must be qualified as defined in Section 213(d) of the Internal Revenue Code. Please note that over-the-counter medications are not eligible for reimbursement without a doctor’s prescription with the Health Care FSA.
· Dependent Care FSA – A Dependent Care FSA – helps to reimburse participants for eligible expenses associated with caring for a qualified dependent, such as a dependent younger than age 13 or another dependent that may be incapable of self-care. For additional information on eligible expenses, refer to Publication 503 on the IRS website.
Both accounts are “use it or lose it,” meaning that funds not used by the end of the plan year will be lost. Some plans allow for a $500 rollover into the next plan year.
HEALTH CARE COST TRANSPARENCY
Also known as Market Transparency or Medical Transparency. Health care provider costs can vary widely, even within the same geographic area. To make it easier for you to get the most cost effective health care products and services, online cost transparency tools, which are typically available through health insurance carriers, allow you to search an extensive national database to compare costs for everything from prescription drugs and office visits to MRIs and major surgeries.
In-network providers are doctors, hospitals and other providers that contract with your insurance company to provide health care services at discounted rates.
Out-of-network providers are doctors, hospitals and other providers that are not contracted with your insurance company. If you choose an out-of-network doctor, services will not be provided at a discounted rate.
Also known as an out-of-pocket limit. The most you pay during a policy period (usually a 12-month period) before your health insurance or plan begins to pay 100% of the allowed amount. This limit does not include your premium, charges beyond the Reasonable & Customary, or health care your plan doesn’t cover. Check with your health insurance carrier to confirm what payments apply to the out-of-pocket maximum.
OVER-THE-COUNTER (OTC) MEDICATIONS
Medications typically made available without a prescription.
PRESCRIPTION MEDICATIONS, TIER CLASSIFICATIONS
Medications prescribed to you by a doctor. Cost of these medications is determined by their assigned tier: Tier 1, Tier 2 or Tier 3.
· TIER 1 DRUGS – Drugs approved by the U.S. Food and Drug Administration (FDA) to be chemically identical to corresponding Tier 2 or Tier 3 versions. The color or flavor of a Tier 1 medicine may be different, but the active ingredient is the same. Tier 1 drugs are usually the most cost-effective version of any medication.
· TIER 2 DRUGS – Brand-name drugs on your provider’s list of approved drugs. You can check online with your provider to see this list.
· TIER 3 DRUGS – Brand-name drugs not on your provider’s list of approved drugs. These drugs are typically newer and have higher copayments.
REASONABLE AND CUSTOMARY ALLOWANCE (R&C)
Also known as an eligible expense or the Usual and Customary (U&C). The amount your insurance company will pay for a medical service in a geographic region based on what providers in the area usually charge for the same or similar medical service.
SUMMARY OF BENEFITS AND COVERAGE (SBC)
Mandated by health care reform, your insurance carrier or plan sponsor will provide you with a clear and easy to follow summary of your benefits and plan coverage.