Glossary of Terms

Coinsurance is how you and your medical plan share the cost of medical services after you meet the plan’s annual deductible. For example, if your deductible is $3,000 and your coinsurance is 20%, once your out-of-pocket expenses reach $3,000, your plan would start to pay 80% of your covered costs, leaving you responsible for the other 20%. Your provider will usually send you a bill for the 20% you owe after your claim has been processed by your health plan.

A copay is a fixed amount you pay for a covered health care service. For example, you might have a $25 copay when you go to the doctor’s office. Your copay is usually due at the time you receive the service and can vary based on the type of service you receive.

A deductible is the amount of eligible expenses you must pay each year before your plan begins sharing the cost of covered services. For example, if your annual deductible is $3,000, you must pay for your non-preventive expenses until your costs reach $3,000, after which the plan will start to pay a percentage of costs.

Plans typically have different deductibles for in-network and out-of-network expenses, as well as different deductibles for individual coverage and family coverage. Depending on your plan, you might need to meet a separate deductible for each covered family member or one larger family deductible before coinsurance begins for anyone.

Your deductible does not apply to in-network preventive care, which is covered at no cost to you. Depending on your medical plan, the deductible may not apply to other services, too, such as doctor’s office visits and prescriptions.

An EPO is a medical plan that provides coverage only for services received from in-network providers. (Unlike an HMO, you typically aren’t required to select a primary care provider (PCP).) EPOs often have a low or no deductible and low to moderate premium costs, with copays typically paid at the time of service for non-preventive in-network medical care and prescriptions.

Keep in mind that in-network preventive care, like annual physicals and immunizations, is covered in full at no cost to you. You’re also protected by an annual limit on costs — if you reach the out-of-pocket maximum, the plan pays 100% of any further covered expenses for the rest of the year.

A Health Care FSA is an account you can use to pay for eligible health care expenses with tax-free dollars. Since you don’t pay income tax on the money you put in an FSA, it’s like getting a discount on your medical, dental, vision, and medication costs! Eligible expenses for a Health Care FSA include deductibles, coinsurance, and copays for medical, dental, and vision care, as well as many over-the-counter items like bandages, sunscreen, and feminine care products.

You contribute to your FSA through before-tax payroll deductions by selecting how much you want to contribute over the course of the plan year, with a proportionate amount of that annual contribution coming out of each paycheck. Your entire annual contribution to a Health Care FSA is available to you from the beginning of the plan year.

FSAs have a “use it or lose it” rule, so you may forfeit any unused money at the end of the year. Depending on your account rules, you may be able to carry over your balance up to a certain amount, or you may be offered an extension to the year-end deadline.

A Health Savings Account, or HSA, is tax-free and only available to participants in a qualified high-deductible health plan. You contribute to your HSA through before-tax payroll contributions, and then use the money in your HSA to pay for eligible medical expenses — including deductibles, coinsurance, and copays. All the money in your HSA rolls over each year and is always yours to keep. You can even invest the money in your HSA to build up savings to pay for health care expenses in retirement.

You can only use money actually deposited into your HSA. If you don’t have enough in your HSA at the time of your medical expense, you can pay another way and reimburse yourself from your HSA later.

An HDHP is a medical plan that puts you in charge of your spending through lower premiums, higher deductibles, and a tax-free Health Savings Account (HSA). You can see any provider, but you’ll generally pay less by staying in-network.

For non-preventive medical and prescription expenses, you pay 100% of your costs until you meet the annual deductible, after which you and the plan share the cost of covered medical care and prescriptions through coinsurance. If your total deductible and coinsurance expenses reach the plan’s out-of-pocket maximum, you won’t have to pay anything further for the rest of the year. Keep in mind that in-network preventive care, like annual physicals and immunizations, is covered in full at no cost to you.

To plan for your out-of-pocket expenses, you can contribute tax-free money from your paycheck to an HSA. The money in your HSA is always yours to keep and can be used now or in the future.

The IRS doesn’t allow you to contribute to both a Health Savings Account (HSA) and a Health Care FSA. Instead, a Limited Purpose Health Care FSA is offered to you if you enroll in a medical plan with an HSA. With a Limited Purpose Health Care FSA, you can pay for eligible dental and vision expenses with tax-free dollars. Since you don’t pay income tax on the money you put in an FSA, it’s like getting a discount on your bills!

You contribute to your FSA through before-tax payroll deductions by selecting how much you want to contribute over the course of the plan year, with a proportionate amount of that annual contribution coming out of each paycheck. Your entire annual contribution to a Limited Purpose Health Care FSA is available to you from the beginning of the plan year.

FSAs have a “use it or lose it” rule, so estimate your contribution carefully. At the end of the year, you may forfeit any unused money. Depending on your account rules, you may be able to carry over your balance up to a certain amount, or you may be offered an extension to the year-end deadline.

An out-of-pocket maximum is the most money you would have to pay in a plan year for covered health care expenses. If your out-of-pocket expenses (such as your deductible, coinsurance, and copays) reach your plan’s out-of-pocket maximum, you won’t pay anything further for covered services for the rest of the year.

A PPO is a medical plan that generally has a lower deductible and higher premiums, which keeps your costs more predictable. You can see any provider, but you’ll generally pay less by staying in-network.

Typically, you pay a copay for non-preventive doctor’s office visits and prescriptions. The cost of other medical services, like hospital stays, must be paid in full until you meet the plan’s annual deductible. Then, the plan will share the cost of these services through coinsurance.

You’re also protected by an annual limit on costs — if you reach the out-of-pocket maximum, the plan pays 100% of any further covered expenses for the rest of the year.

Contributions are the money you contribute from your paycheck to pay your share of the cost of being enrolled in a health plan. (Note that iCapital pays a large percentage of the total cost for your medical coverage.)

Your contribution depends on the plan you choose and who you enroll. For example, a medical plan with a low deductible will have a higher contribution than a plan with a higher deductible. And, you’ll pay a lower contribution to enroll yourself, while a higher contribution would apply when enrolling your spouse and kids.

Preventive care services include routine physicals, health screenings, routine blood work, and recommended immunizations. In-network preventive care is covered free of charge with all plans.

A qualified life event is a change in your life that qualifies you to update your benefits enrollment during the year (outside of Open Enrollment). For example, if you get married in April and your Open Enrollment is typically in the fall, you wouldn’t need to wait until then to change your benefits. You could add your spouse to your coverage or drop your coverage and join your spouse’s plan within 30 days of your wedding. Only changes related to your life event are allowed.

Telehealth provides convenient, 24/7 access to board-certified doctors by phone or video, wherever you are. Telehealth appointments are typically less expensive than going to an urgent care center, with costs varying depending on your medical plan. In some cases, certain specialist visits are available through telehealth, such as behavioral health and dermatology.