Understanding your health insurance benefits can be a difficult task. Given how complex this task can be, Benefit Concepts, Inc. has created a list of FAQs related to employee benefits in an effort to help you better understand and leverage these benefits.

Since 1983, Benefit Concepts, Inc. has been developing relationships with employers, individuals, independent agents, and insurance carriers. 

Our commitment and consistency has resulted in becoming one of the largest group and individual benefits agencies in the country, holding elite status with all major insurance carriers. 

We serve over 4,000 companies and represent more than 50 top-rated global insurance carriers. Our group insurance employers range from 2 person companies to businesses with more than 1,000 workers.

This puts us in a unique position to help you navigate the complexities of your employee benefits. 

What is a Deductible?

This is the amount of money that an insured person will have to pay when a claim happens before their employer’s health plan starts making payments for health care services received. For example, if you have a deductible of $1,000 you will have to pay that amount in total when making a claim during a plan year. (should we mention the outliers like preventive here?

What is Coinsurance?

This is the amount that you will have to pay, on top of the deductible, when making a health insurance claim. Most often, it is expressed as a percentage of the medical bill you will pay. The rest will be covered by the health plan.  Below you can see an example:

Total claim $2,000 in network

Deductible is $1,000

Balance = $1,000

Co-insurance owed by member is 20% = $200.00

Remainder of the claim paid by the Plan = $800.

What is an Out-of-pocket Maximum?

This is the maximum amount that you will have to pay towards covered expenses under a health care plan. Usually, this includes the deductible and coinsurance. As soon as your out-of-pocket maximum is reached, your plan will cover 100% of any eligible expenses. 

What is an Explanation of Benefits (EOB)?

This is a description that your insurance carriers will send to you with details about the health care benefits you received. Also, this will include the services for which your health care provider has requested payment. 

What is Utilization Management (UM)?

This refers to the process of reviewing how appropriate was the care provided to patients. Utilization management occurs before (pre-certification), during (concurrent), or after (retrospective) medical services have been provided. 

In some cases, your health plan might require authorization from your UM company before approving admission to a hospital for nonemergency care. This is important because it can reduce unnecessary hospitalizations, treatment, and costs. 

What is a High Deductible Health Plan (HDHP)?

This is a particular insurance plan where the premium is lower due to a higher deductible. Within this plan, most medical expenses will not be covered until the deductible is met. Yet, preventive care services are often covered before meeting the deductible. It’s usually a good idea to combine an HDHP with a health savings account (HSA). In doing so, you can use your HSA account to pay for qualified out-of-pocket medical expenses while taking advantage of the tax considerations of HSAs. 

What is a Health Savings Account (HSA)?

This is an account used to pay for medical expenses and reduce your taxable income. Often, to qualify for an HSA you must be enrolled in an HDHP. As of 2017, an HDHP is defined by the IRS as a plan that has an out-of-pocket maximum of $6,550 and a minimum deductible of $1,300. If it is a family plan, those amounts change to $13,100 and $2,600 respectively.

As of 2019, the contribution limits for HSAs are $3,500 for individuals and $7,000 for a family. It is important to highlight that, unlike a flexible spending account, you will never have to worry about losing your HSA savings. The balance rolls over from year to year. 

To learn more about how the HSA works, and the tax advantages, visit this explanation by Nerd Wallet. 

More Employee Benefits Questions?

If there is anything else you’d like to know about your health benefits that was not answered in this article, feel free to click the button below and we will connect you with one of our Benefits Advisors. 

Benefit Concepts, Inc. (BCI) is a Texas-based company that helps individuals and businesses achieve peace of mind through our consultative approach to design and implement comprehensive benefit programs as well as HR support, Compliance, and Technology services. As one of the largest group and individual benefit agencies in the United States, BCI also creates strategic partnerships with other agencies across Texas by making available our wide array of solutions, and specialists, to their clients.