Help Your Employees Better Understand Health Insurance Terms

The health care landscape can be confusing. Rules and regulations seem to be endlessly shifting and it’s a challenge to keep track of the moving parts. But from a micro perspective, health care shouldn’t be that difficult. Your employees know what their insurance plans do for them, so that’s really all they need to be aware of – right?

Maybe. Except that odds are your employees may not actually be knowledgeable about their benefits offerings because they’re not familiar with health insurance terms and jargon.

Nearly three-fourths (74 percent) of workers “sometimes or never” understand everything covered by their insurance policy today. With the trend of consumer-driven health care on the rise, this is especially alarming as employees are expected to take a more hands-on approach in selecting their health benefits options.

While it’s a small step, you can start helping your workforce by educating them about basic, yet essential, health insurance terms. Knowing the jargon is crucial, especially during open enrollment season, in order to read the literature, to understand benefits options available and to make informed decisions about health insurance.

Below are a few basic terms to consider teaching to your employees.

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Health Insurance Terms Employees Must Know

Deductible

The amount owed for covered health care services before a health insurance plan begins to pay. For example, if a plan deductible is $1,000, the plan won’t pay anything until the policyholder pays $1,000 toward covered health care services subject to the deductible.

The deductible may not apply to all services.

Coinsurance

The percentage paid toward each covered health care service provided. The coinsurance is paid on top of any deductible.

For example, let’s say an employer offers an 80/20 health insurance plan and the allowed amount for an office visit is $100. Once the policyholder has met the deductible, the coinsurance payment of 20 percent would be $20. The health insurance or plan pays the rest of the allowed amount.

Copay

A fixed amount, for example $15, that is paid for a covered health care service, usually due at the time of service. The amount may vary by the type of covered health care service.

Non-Medical Costs

When faced with a serious accident or illness, there are various non-medical costs associated with a hospital stay or recovery period including:

• Child care
• Transportation
• Reduced take-home pay (due to missing work)

These expenses can add up quickly, contributing to the overall out-of-pocket cost of being sick or injured.

Supplemental Insurance

Supplemental insurance, sometimes called voluntary insurance, is insurance that can be additional or complementary to major medical insurance. Examples include:

• Disability
• Dental
• Hospital indemnity
• Critical illness

Just to name a few. It can help pay for services and out-of-pocket expenses that major medical does not cover. Provider policies may pay cash benefits, enabling the policyholder to put the money toward costs that are the result of an unexpected illness or injury.

Limits or Exclusions

Workers must pay attention to services not included in their plan, as well as any limitations or exclusions.

Limits related to the number of refills for certain drugs, the number of visits to certain specialists or the number of days covered for certain benefits could mean unexpected out-of-pocket costs.

Injured Photo via Shutterstock

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