I need help understanding a technical term
- Annual deductible
The out-of-pocket amount you have to pay before the plan starts paying coinsurance.
For example, if you visit the doctor’s office during the year and need a prescription, you pay the full cost of each visit or prescription until you have reached the annual deductible set by your plan. Once you’ve met your annual deductible your plan pays the whole cost or shares the cost with you for each medical service you use.
The annual deductible amount is different in each plan and for each coverage level.
For example, if you are enrolled in the HDHP Silver Medical plan your annual deductible is $6,000 for individual coverage and $12,000 for family coverage. Different annual deductibles apply to the other Medical plans and the Dental plan.
How are my deductibles calculated?
All the Spitzer plans have embedded deductibles. This means an individual on the plan will not contribute more than the individual deductible towards family coverage.
- Joe is enrolled in the Gold Plan and is covering his spouse Susan and three children under the plan. The Gold Plan has an individual deductible of $3,000 and an embedded family deductible of $6,000
- Joe has surgery in January that costs $3,000. He has now reached the individual deductible under the Gold Plan, therefore his deductible has been met and coinsurance will apply to covered costs he incurs.
- Susan reaches $3,000 in covered costs after giving birth to their youngest child in February.
- The claims incurred by Joe and Susan satisfy the family deductible of $6,000.
- Later in the year when Joe’s daughter has her tonsils removed she is only responsible for a portion of the cost of the surgery because the family deductible was already met and coinsurance will apply.
- Accidental Death and Dismemberment Insurance (AD&D)
- A type of insurance that pays out a lump sum after death or serious injury as a result of an accident, such as loss of one or more bodily members (such as hands or feet) or the sight of one or both eyes.
- Base earnings
- The base compensation (regular wages) paid to an employee prior to before-tax payroll deductions, if any, excluding bonuses, overtime pay and incentives.
- Balance billing
- The amount you are billed by your out-of-network provider to make up the difference between what your provider charges and what your plan pays. For example, if your plan pays 50% for out-of-network services you will be billed 50% of the cost by your provider. This amount is in addition to, and does not count towards, your out-of-pocket maximum.
- The person who receives a lump sum after the death of the insured employee or family member. You can choose who this person is.
- A demand for the payment of benefits under a policy. For example, the provider submits or files a claim to your Medical plan for it to pay for the services you have received.
- Your portion of your expenses after you meet your annual deductible; the plan pays the rest. For example, if you’ve met your annual deductible in the HDHP Gold Medical plan you will pay 20% of the cost for each prescription you need and your plan will pay the remaining 80% of the cost.
- Contracted rates
- The discounted cost you will pay when you use an in-network provider for a service, which has been negotiated by your plan.
- A set dollar amount you pay for a service, usually when you receive the service. For example, if you are enrolled in the Core Plan for Medical coverage you pay $15 for every generic prescription when you have it filled at the pharmacy, even if the retail price is more than $15.
- Covered expenses
- The expenses that a plan will pay for, as set out in the plan’s Summary Plan Description. These benefits could include Physician Visits, Preventive care and X-rays but for further information, please review the Summary Plan Description (SPD) for that particular benefit plan.
- Creditable coverage
- A health insurance, prescription drug, or other health benefit plan that meets a minimum set of qualifications.
- A physical or mental condition that makes the insured employee or family member incapable of performing one or more duties of his or her occupation.
- Conditions that an employee or dependent must meet before they can be enrolled for benefits.
- Elimination period
- The waiting period an employee must be disabled for before disability benefits become payable.
- Employee Assistance Program
- A benefit that provides confidential counselling or resources to employees and their family members.
- Evidence of Insurability (EOI)
- A questionnaire an employee must complete to disclose medical history.
- Health Insurance
- A type of insurance that pays the whole cost or shares the cost with you for each medical service you use.
- Health Savings Account (HSA)
- A savings account that allows you to save pre-tax dollars to pay for qualified healthcare expenses. You can only use a Health Savings Account if you are enrolled in the HDHP Silver or the HDHP Gold.
- High Deductible Health Plan (HDHP)
- A type of medical plan with an annual deductible that meets the minimum required by the IRS, such as the HDHP Silver and the HDHP Gold that we offer through Cigna. Our plans allow you to use a Health Savings Account (HSA), and preventive care is covered at 100%.
- In network
- Providers or facilities that have a contract with your plan to provide services at a discounted cost.
- Long-term Disability insurance
- A type of insurance that pays out a regular amount to an employee who has become disabled due to illness or injury.
- The providers and facilities that a plan has contracts with to provide services to you at a discounted cost.
- Out of network
- Providers or facilities that do not have a contract with your plan. You will pay higher costs than if you use an in-network provider for the same service, as these providers or facilities can charge you the full cost for their services.
- Out-of-pocket maximum
The most you have to pay for covered services during the plan year; after that, the plan pays the rest.
For example, if you are enrolled in the HDHP Gold Medical plan and you have reached your annual deductible you will pay 20% of the cost for each medical service you use until you reach your annual out-of-pocket maximum ($6,000 for individual coverage and $12,000 for family coverage). Once you’ve met your annual out-of-pocket maximum your plan pays the whole cost for each medical service you use. Different annual out-of-pocket maximums apply to the other Medical plans and the Dental plan.
How is my out-of-pocket maximum calculated?
All the Spitzer plans have embedded out-of-pocket maximums. This means an individual on the plan will not contribute more than the individual out-of-pocket maximum towards family coverage. For example:
- Joe is enrolled in the Gold Plan and is covering his spouse Susan and three children under the plan. The Gold Plan has an individual out-of-pocket maximum of $6,000 and a family out-of-pocket maximum of $12,000.
- Joe spends $6,000 on various medical procedures in January. He has now reached the individual out-of-pocket maximum, therefore the plan will begin to pay 100% of the cost of any further covered costs he incurs.
- Susan incurs $6,000 in covered expenses in February. She has now reached the individual out-of-pocket maximum, therefore the plan will begin to pay 100% of the cost of any further covered costs she incurs.
- Because Susan and Joe have contributed a combined $12,000 in out-of-pocket expenses, the family out-of-pocket maximum has also been met. Therefore any additional covered expenses the incurred by any family member will be covered at 100% for the remainder of the calendar year.
- Pre-existing condition
- A medical condition for which you’ve had symptoms, consulted a medical professional or received treatment before you enroll in a plan or before your coverage takes effect.
- The amount you pay to be covered by a plan.
- Preventive care
- Routine healthcare you receive to prevent illnesses, disease, or other health problems. Our Medical plans cover 100% of the cost of preventive care services, like annual physicals and routine immunizations.
- Short-term Disability Insurance
- A type of insurance that pays out a regular amount to an employee while they are unable to work due to non-work-related illness or injury.