Throughout my life, I’ve had the good fortune to stay on my parents’ health insurance plan. But this year I turned 26. So, when my company kicked off its open enrollment period, the window when your choose plans, it was time for me to spread my wings.
Clicking the link to choose a plan felt daunting, and it got worse when I started going through the selection process. What is an HSA? Or an FSA? Did I need that?
And what did high deductible versus low mean in terms of a plan?
Overwhelmed, I decided to talk to experts for help. One tip they gave me is to learn the language of enrollment before you start researching your health care plan. So, here’s a glossary of terms sourced by USA TODAY with additional resources to help you on your insurance selection journey.
Glossary of terms
Premium: The premium is the amount you pay for health insurance every month, according to HealthCare.gov.
It’s the base expense and does not usually cover other health expenses. Premiums vary for different plans. A lower premium means a higher deductible and vice versa.
Deductible: A deductible is the amount you pay in expenses before your health insurance plan pays in full.
So, for example, if I were to enroll in a low deductible health plan of $1,000 with a high monthly premium of $220, I would pay all the costs tied to my health care until I hit $1,000 in expenses. If my deductible were higher, say around $3,000, and my monthly premium was lower, say around $100 a month, I would pay until I hit $3,000 in medical expenses for the year.
After a deductible is hit, insurance would take over the majority of costs.
Co-payment: A co-pay is what you pay at the health care provider’s office. It’s a “fixed amount ($20, for example) you pay for a covered health care service after you’ve paid your deductible,” according to HealthCare.gov.
Allowed amount: Before you hit your deductible, the visit cost is the “maximum amount a plan will pay for a covered health care service” that you will pay under your health care plan, according to HealthCare.gov. The agency gave the example that if you haven’t hit your deductible, you may pay $100 for a covered service under the allowed amount versus a $20 co-pay.
Health Savings Account, or HSA: Open enrollment offers employees the chance to contribute to something called an HSA if they select a High Deductible Health Plan (or a health plan with a lower premium a month), which gives them the chance to save money to put toward health expenses tax-free.
According to HealthCare.gov, an HSA is “a type of savings account that lets you set aside money on a pretax basis to pay for qualified medical expenses.”
The untaxed dollars in an HSA can be used to pay for things such as deductibles, co-pays and other health expenses and can help lower overall costs of health care. Typically, the money in the HSA can’t be used to pay premiums.
Flexible Spending Account, or FSA: An FSA is similar to an HSA in that the user can pay for out-of-pocket medical expenses such as co-pays, prescription drugs, medical devices and insulin, among others, with pretax dollars.
According to HealthCare.gov, if the money is not spent by end of the year, employers will allow users two options: take 2 1/2 extra months to use the money in the account or carry over $500 to the next year.
In-Network versus Out-of-Network: If a health care provider is “in-network,” it means the doctor or facility is part of a health care plan’s network. Typically, in-network providers cost less for the insured than out-of-network providers because those in-network providers have contracts with the insurer.
Specialist: Not all doctors are covered the same way under insurance plans; specialists often cost more to see, with some percentage covered by insurers. According to HealthCare.gov, a specialist is a physician who “focuses on a specific area of medicine or a group of patients to diagnose, manage, prevent or treat certain types of symptoms and conditions.”
There are also non-physician specialists who have more training in a certain field of health care.
Preventative services: Preventative care appointments, or “preventative services” as HealthCare.gov says, are routine appointments such as screenings, checkups and others focused on preventing illness or other health problems.
Other tools
There are plenty of resources for people who seek to understand health insurance and open enrollment online.
HealthCare.gov, for example, which has an extensive glossary of terms, also offers resources such as guides on comparing plans.
Source: Read Full Article
