The terms sound alike.
Copay and coinsurance, deductible and out-of-pocket maximum, premium and cost of care. Each pair sounds like the same idea and works differently.
Four pairs worth separating out loud.
Most plan confusion lives in one of these four pairs.
Copay and coinsurance
A copay is a fixed dollar amount for a service. Coinsurance is a percentage of the cost. Both are what the employee pays, and they behave very differently on a large bill.
Deductible and out-of-pocket maximum
The deductible is what the employee pays before the plan starts sharing. The out-of-pocket maximum is the most the employee pays in a year. One is a threshold, the other is a ceiling.
Premium and cost of care
The premium is the price of having the plan, paid every paycheck. The cost of care is what the employee pays when they use it. A plan can be cheap on one and expensive on the other.
Allowed amount and billed amount
The billed amount is what a provider charges. The allowed amount is the rate the plan recognizes. Cost sharing is figured on the allowed amount.
We define each pair once and use the same words every time.
Consistency does half the work. When every document, session and reply from us uses the same definitions, the sound-alike terms stop blurring together.
Related pages.
What is the difference between a deductible and an out-of-pocket maximum?
The deductible is what an employee pays for covered care before the plan starts sharing the cost.
Compare Total Cost, Not Just the Premium
The premium is only one part of what a plan costs an employee.
Avoiding Group Health Insurance Plan Confusion
The full guide to helping employees understand their group health plan.
Questions that come up next.
Short answers to the questions employees ask after this one. Each links to its own page.
Do copays count toward the deductible?
It depends on the plan. On some plans copays count toward the deductible and on others they do not. Copays generally do count toward the out-of-pocket maximum for covered in-network care, but confirm in your plan documents.
What counts toward the out-of-pocket maximum?
Generally the deductible, copays and coinsurance for covered, in-network care count. Premiums, services the plan does not cover and, in most plans, out-of-network care do not.
Why did we get a bill after a visit that only had a copay?
Because the copay usually covers the visit itself and not everything billed around it. Lab work, imaging, a procedure, a facility fee or an out-of-network provider can each be billed separately.
Ready? Send us your renewal, or talk it through with someone first. No cost, no obligation.
General information about group health plan terms, not legal or tax advice. Plan-specific questions belong with the plan documents and the carrier.
Send us your renewal.
We’ll tell you whether it looks competitive, where we see opportunity, and the five questions we’d put to your carrier. No cost, and no obligation to move anything.
The renewal letter
Your current plan summary
Contribution split by tier
Enrolled counts by tier
Four documents, two more if your group is 50 or more. Nothing else; every extra one is a reason to postpone.
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