Glossary of Terms
Knowing the basics of how health plans work will help you be better prepared to manage your health care and associated costs. You can start by familiarizing yourself with a few of the most important terms to know.
Glossary
Coinsurance:
A set percentage of costs you pay for covered health services after you meet the deductible. You may get a bill for your share of the costs after your visit. The plan pays the rest of covered charges. Coinsurance does not include copayments.
Copay or copayment:
A fixed dollar amount you pay each time you visit the doctor’s office, urgent care clinic, ER or pharmacy. Usually, you pay the copay when you receive the service. The amount can vary by plan.
Deductible:
The amount you pay before your plan begins to pay your covered health care expenses. For example, if your plan’s deductible is $2,000, you’ll pay the full cost for eligible health services up to $2,000. Then, your plan begins to pay.
Explanation of benefits (EOB):
After you visit the doctor, you will get a statement from your health plan called an EOB. It outlines the services you received and the costs paid by your plan. It also shows the amount you are responsible to pay. An EOB is not a bill, but the amounts shown should match up with the amounts on any bills from medical providers.
Out-of-pocket maximum:
The limit you pay for covered services each plan year. Once you have met the out-of-pocket maximum, your plan pays 100% of covered services for the remainder of the coverage period. This limit does not include the money you pay for premiums or health care services not covered under the health plan.
Premium:
The cost for health plan coverage, usually paid through bi-weekly payroll deductions. Watts helps fund its employee health benefit, and your portion of the plan cost is referred to as the “plan contribution”.
