Deductible Plan Glossary
Here are some common terms that can help you understand your deductible plan.
Coinsurance
The percentage of charges you pay when you receive certain covered services.
For example, a 20 percent coinsurance on a $200 procedure means you’ll pay
$40 for that procedure.
Copayment (copay)
The set dollar amount you pay for certain covered services or prescriptions.
For example, a $10 office visit copay means you’ll pay $10 for each office visit.
Deductible
The set amount you need to reach before you’ll pay copays or coinsurance for most covered services for the rest of the calendar year. Until you reach the deductible,
you’ll pay the full charges for most services.
Evidence of Coverage (EOC)
A document that shows detailed information about your benefits and coverage.
Your employer’s human resources department should be able to provide you with a copy.
If you have a direct-pay plan, the EOC is included with your plan welcome materials.
Explanation of Benefits (EOB)
A summary of services received, including dates received and the provider’s name.
An EOB is not a bill, but it can help you keep track of your health care expenses.
Flexible spending account (FSA)
A financial account that you can fund with pretax* contributions from your paycheck.
You can use the funds in your FSA to pay for qualified medical or dependent-care expenses.
An FSA is owned by your employer, and any unused funds will be forfeited at the end of the FSA plan year.
Health reimbursement arrangement (HRA)
An HRA allows you to use funds contributed by your employer to pay for qualified medical expenses. Because the money in your HRA account isn’t considered part of your wages,
it’s not subject to federal income taxes.
Health savings account (HSA)
A financial account that you can fund with pretax* contributions from your paycheck,
or after-tax contributions that are tax deductible. You can use funds in your HSA to pay for qualified medical expenses now or in the future, even if you change jobs or retire.
Non-preventive services
These are services that diagnose a condition for which you have symptoms or that are used to treat a condition for which you’ve already been diagnosed. While most preventive care services are available to you for little or no cost, you’ll probably pay more for any non-preventive services you receive.
Out-of-pocket maximum
The maximum amount you’ll pay for most services covered by your plan each year. After you reach this amount, we’ll provide most covered services at no cost to you for the rest of the year.
Preventive care services
Preventive care services are types of routine care intended to help keep you healthy.
A service is considered preventive if you have no symptoms indicating that you’re in need of diagnostic services or treatment, and if no signs of illness are discovered during the service. Our deductible plans cover most preventive care services at little or no cost to you.
Qualified medical expense
If you have an HRA, HSA, or FSA, you can use the funds in your account to pay for qualified medical expenses, as defined in Internal Revenue Code Section 213(d).
For a list of qualified medical expenses, download a copy of IRS Publication 502, Medical and Dental Expenses at irs.gov/publications.
Rolling over HRA funds
If you have an HRA and your employer offers the rollover option, you can use funds left over from one year to pay for qualified medical expenses the next year, as long as you’re still a member of the plan. How funds roll over — including how much can roll over from year to year — will depend on your plan details.
Substantiation (validation)
With an HRA or FSA, you may be asked to submit proper documentation to validate a claim, such as Explanation of Benefits (EOBs), bills, or receipts. Check with your HRA or FSA administrator for specific requirements.
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