Glossary of Insurance Terms

Coinsurance – Your insurance company may require you to pay a percentage of medical expenses after the deductible amount, if any, was paid. Once any deductible amount and coinsurance are paid, the insurance company is responsible for the rest of the payments to the provider. Every insurance company has different coinsurance rates. It’s your responsibility to check your plan details to determine if you have a coinsurance amount.

Copayment – Many health insurance plans require you to pay a fixed dollar amount at the time you visit the office. There may be separate copayments for different services. Medical providers are required by the insurance company to collect copayments from patients.

Deductible - A fixed dollar amount during the benefit period - usually a year - that you are required to pay before the insurance company starts to make payments for your medical services. Plans may have both “per individual” and “family” deductibles. Some plans may have separate deductibles for specific services. For example, a plan may have a hospitalization deductible per admission.

Flexible spending accounts (FSA) - Accounts offered and administered by employers that provide a way for employees to set aside, out of their paycheck, pre-tax dollars to pay for your share of insurance premiums or medical expenses not covered by your insurance plan. Typically, money in the account must be used within the given benefit year or you lose the money. Flexible spending accounts can also be provided to cover childcare expenses too, but those accounts must be established separately from medical FSAs.

Maximum out-of-pocket expense - The maximum dollar amount you are required to pay during a year. Until this maximum is met, you and your health insurance share in the cost of covered expenses. After the maximum is reached, the insurance company pays all covered expenses, often up to a lifetime maximum.

Source: U.S. Dept of Labor, www.bls.gov