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Understand Your Health Insurance

It is important to understand how health insurance works so that you can make the best decision for yourself and your family. Reading through a list of technical terms can still be confusing, so we have included an infographic to help you understand the basics. 

There are five terms that everyone should understand and know about their policy. If you do not know what your deductible or max out of pocket on your policy is, reach out to your HR department or, if you are shopping for individual insurance outside of a company, reach out to one of our advisors and we can help you understand your policy (even if you are not one of our clients).

Premium

Your monthly premium is what you will pay each month for your health insurance. 

Deductible 

Your deductible is what you will pay out of pocket before your health insurance will begin to cover any qualified expenses. Deductibles are usually an annual amount.

Many plans offer preventative benefits even before you have met your deductible. CLICK HERE for a list of preventative services that are covered for free before you have to meet your deductible.

Coinsurance

After you meet your deductible, you still may be required to pay co insurance. This is a small percentage of your medical bills that you’ll pay after paying for your deductible. So for example, if you have a $1,000 deductible with an 80/20 plan you will pay your $1,000 deductible, then 20% of any of your medical bills up until you meet your max out of pocket. After you have met your max out of pocket, 100% of any qualified expenses will be covered.

Copay 

Many health insurance plans will have a copay associated with certain services. This means that prior to meeting your deductible, you will only be responsible for the copay. In our example above, if you have a $10 copay for a primary care visit, then even before you hit your $1,000 deductible, you will still only need to pay the $10 copay when visiting a primary care physician.

Max out of pocket

The maximum out of pocket is the most you will have to pay for medical services. This does not include your monthly premiums. Copays will not count towards your deductible, but may go towards your max out of pocket. In our example, if you have a $1,000 deductible, you will be responsible to pay 20% of your bills until you hit a max out of pocket of $2,500, then all qualified expenses are covered 100%.

When can I apply for coverage?

Open Enrollment

For Affordable Care Act (ACA) plans through the marketplace, there is an annual open enrollment period that usually starts November 1st and lasts until December 15th. This is the time where everyone can sign up for or switch their plans. Outside of this time frame, you have to qualify for a special enrollment period. 

If you are looking at a health insurance plan that is outside of the ACA marketplace, there is usually more flexibility for when you can sign up. Depending on your location, short term plans may be available at any time during the year.

Special Enrollment Periods

Special enrollment periods allow you to enroll in health insurance due to a life event or change. When applying through a special enrollment period, you may have to submit documentation to prove that you qualify for the special enrollment period. Qualifying special enrollment periods include the following:

A Change in Household 

• Marriage
• New birth, adopted a child, or placed a child for foster care
• Divorce or legally separated and lost health insurance
• Death

A Change in Residence

• Moving to a new home in a new zip code or county
• Moving from the US to a new country or territory

Note: Moving only for medical treatment or staying somewhere for vacation doesn’t qualify you for a Special Enrollment Period.

Important: You must prove you had qualifying health coverage for one or more days during the 60 days before your move. You do not need to provide proof if you’re moving from a foreign country or United States territory.

A Loss of Coverage

• Losing job based coverage
• Losing eligibility for Medicaid or CHIP
• Losing eligibility for Medicare
• Losing coverage through a family member

Other – Special Circumstances

In 2021, President Biden opened the market again in response to the COVID-19 pandemic for three months. This special enrollment period allows anyone who had not signed up for health insurance during the previous open enrollment period to enroll or switch their plans. This special enrollment period will last from February 15th – August 15th, 2021.

Conclusion

It’s important to understand your health insurance so you can make the best decision for yourself and your family. If you still have questions, you can review our article on Health Insurance Plan Types or reach out to one of our agents. A Compass agent is trained in the “Compass Way” and will not only help you narrow down your choices, but also make sure you understand your benefits.