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Standard Life and Accident Insurance Company

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Benefits 101

Health insurance can be a confusing product and as a result many people just assume it’s too confusing to learn or understand basic benefits. Not true. Health insurance certainly has various aspects that a member needs to understand but it is not impossible or even that hard to learn. Here are key aspects of a health insurance policy that affect the price of the policy:

COINSURANCE

An enrollee begins to pay for coinsurance after their deductible has been met. A coinsurance fee refers to a percentage of a healthcare cost that they will be charged. For instance, an in-network doctor’s visit may have a 30% coinsurance rate. If the visit costs $100 total, the consumer will be responsible for paying $30, and the insurance company pays the remaining $70. Generally, the lower the member’s coinsurance percentage, the higher the premium the member must pay.

COPAYMENT

A copayment is similar to coinsurance, but instead of being figured as a percentage of a service’s cost, it is calculated as a flat fee for a medical service. For instance, your plan may charge a $33 copay for visiting an in-network specialist. As with coinsurance, in many cases copayments will not begin until the consumer has met their deductible. Generally, the more copays that are not after deductible (a.k.a. “first dollar”), the higher the premium the member will pay.

DEDUCTIBLE

A deductible is the amount an enrollee must pay for covered medical services before an insurance plan will start covering costs. Generally, the lower the deductible, the higher the premium the member must pay.

POLICY MAXIMUM

The maximum dollar amount for medical services that the member’s insurance company will pay during the term of the policy. Traditionally, $1,000,000 has been the standard. However, a lower policy maximum will drive lower premiums.

PREMIUM

The amount of money that the member must pay for their insurance policy. Generally, the more benefits provided will mean a higher premium for the member.

OUT-OF-POCKET MAXIMUM (Or Limit)

Your out-of-pocket limit is the maximum amount you pay for deductibles, coinsurance, and copayments within your coverage period. After this amount is reached, the plan pays 100% of covered medical services delivered in-network for the remainder of the policy term. Costs that do not have to be counted towards your out-of-pocket maximum include: premiums, out-of-network costs, and uncovered medical services. Generally, the lower the out-of-pocket maximum, the higher the premium the member must pay.

POLICY TERM

Policy term is the maximum duration of the initial coverage period offered by the plan. You can purchase a plan for one month up to the maximum duration and you can cancel your policy at any time. We suggest purchasing the maximum duration available. Short-term plans are not guaranteed renewable, but we can help you reapply or find a new plan.