As employers, you recognize that your employees’ health is important. Employees who engage in regular checkups and routine screenings may help increase business productivity. At Blue Cross and Blue Shield of Texas, we’re here to help you understand the basics of health care coverage for you and your employees. Explore the sections below to understand how insurance works, how copays work, the difference between HMO and PPO plans, and more.
Health insurance helps protect your employees (and you) from the higher costs of receiving health care in the event of illness, accident, prescription drugs, doctor visits, hospital stays and preventive care. Health insurance carriers may offer a variety of health plans with varying levels of coverage and benefits. Let’s go through an example of how health insurance could impact health care costs.
Let’s say you need surgery with allowable costs of $20,000, and the following figures apply to your health insurance plan.
In your health insurance plan, you may have:
Now we will break down how those cost-sharing measures make an impact on the $20,000 medical bill.
Health insurance is full of terms you may not know. To help you and your employees understand health insurance, here’s a list of the most commonly used health care terms and definitions.
Claim
A claim is a request by a plan customer or their health care provider, for the insurance company to cover medical services.
Coinsurance
Coinsurance is the portion of eligible medical expenses that you will have to pay after you’ve met your deductible. For example, if your coinsurance is 20%, you are responsible for paying 20% of your eligible medical expenses, and the plan will pay the remaining 80%.
Copay
A copay is a fixed amount that you pay for a health care service or prescription and can vary depending on the type of service. The health insurance plan will detail if there is a copay, what the amount is, and to which services it applies.
Deductibles
A deductible is an amount you pay for covered health care services before your insurance plan starts to pay for a portion of the costs.
For example, let’s say your deductible is $5,000. You will need to pay 100% of the first $5,000 of eligible medical costs before your plan starts paying for covered services.
Dependents
An eligible person, other than the member (generally a spouse or child), who has health care benefits under the member's policy.
Plan Costs
Plan costs for a patient is the amount paid out-of-pocket for health care services. Deductibles, copays and coinsurance can all impact the plan costs. Plan costs will vary by plan and metal tiers. Generally, PPOs have deductibles and higher copays than HMOs. HMOs don't have deductibles but do have copays.
Premium
A premium is the amount a member pays to an insurance carrier each month for their health care plan.
Preventive Care Services
Routine health care that includes screenings, check-ups and patient counseling to prevent illnesses, disease, or other health problems.
Primary Care Physician
The physician you choose to be your primary source for medical care. Your PCP coordinates all your medical care, including hospital admissions and referrals to specialists. Not all health plans require a PCP.
Referral
For an HMO or point-of-service (POS) coverage, a written authorization from a member's primary care physician (PCP) to receive care from a different contracted doctor, specialist or facility.
