It happens every year. You get the email from HR that you ignore until the sixth reminder comes in, in all caps: “ACTION REQUIRED, DEADLINE APPROACHING.”
Whoops. Maybe you went to the all-company meeting a few weeks before, tried to make sense of the powerpoint slides, and walked away with more questions than you started with, and no idea how to even ask them.
Or maybe you’re a freelancer who’s trying to navigate healthcare.gov in the ever-shortening window of time, with the ever shortening list of insurance provider options, amidst ever-growing deductibles. Ah, yes. It’s open enrollment season, y’all.
This means it’s time to choose the health insurance plan that, er, sucks the least (because ICYMI, it’s all a pretty hot mess right now). Before you dive in this year, let’s talk through the glossary of different terms and acronyms you’ll need to know and how to put them all together:
This is what you pay to have the insurance. If you’re employed, the amount will be deducted from each paycheck. If you’re self employed, you’re paying this bill every month. Lower premiums usually mean higher deductibles, or less awesome coverage overall.
This is the amount you are responsible for paying out-of-pocket until the insurance starts covering most of the cost. For those of who chose—or were stuck with—a high deductible health plan (see below) for the first time, you most likely got a rude awakening when we went to the doctor, and then 45-60 days later got a bill for a few hundred dollars.
Usually, the lower the deductible, the higher the premium. This is because you’re asking the insurance company to take on more of the “risk” of you using the insurance.
This is the amount you pay—usually between $10 to $50—for stopping by the doctor’s office. Co-pays have gotten more confusing in the last few years.
There are some plans where the co-pay is “not subject to the deductible” for certain services, which means even if your deductible is $1,500, you will just owe the co-pay for a visit. Other times, the co-pay is “after you’ve met the deductible,” which means first you hit the deductible amount ($1,500 in this example) and then you only need to pay the co-pays.
Co-insurance is similar to co-pay, except you usually are responsible for a percentage of the cost. For instance, if a doctor’s visit cost $500 and you have 10 percent co-insurance, you owe $50 and the insurance company will cover the rest. Usually, co-insurance kicks in after you’ve met the deductible.
This is the maximum amount of money you’ll pay out-of-pocket until the insurance starts paying for everything thereafter. This means no more deductibles, co-pays, or co-insurance. As long as the medical treatment is within the network and covered by the insurance, they will pay for all of it. Because of this, out-of-pocket maximums are usually quite high, but the max out-of-pocket number is $7,150, or $14,300 for a family.
High deducible health plan (HDHP)
A HDHP is literally what it sounds like, but insurance companies love using that acronym to confuse us. A plan is considered a HDHP if the deductible is higher than $1300 for an individual or $2600 for a family.
HDHP’s are significantly less expensive than lower deductible plans (i.e. you can get an individual high deductible plan for about $400 per month and a lower deductible plan can run about $700-$800.) The max a deductible can go is $7,150 or $14,300 for a family.
And in case you were wondering, yes, with some plans the deductible is the same amount as the out of pocket max, which means the insurance isn’t going to start paying up until it absolutely has to. Yaaaaay.
Open enrollment for health insurance starts on November 1 and ends on December 15. Find out more here.