Since you offer CaliforniaChoice health insurance to your employees, it’s essential to understand how key parts of your coverage work.
Let’s break down three important health insurance terms that you and your team should know to make the most of your benefits.
What is a health insurance premium?
This is the amount you pay for employer-sponsored health insurance, including both your share and your employees’ share of the cost. In most cases, premiums are paid monthly to CaliforniaChoice, but you can deduct your employees’ share from their payroll on a weekly, bi-weekly, or twice-monthly basis.
What is a deductible?
A deductible is a set amount of money (for example, $500) that an insured employee or covered family member must pay for health care before their insurance starts covering costs.
For example, if your plan has a $500 deductible, you’ll need to pay $500 out of pocket for covered health services before the plan begins to pay. However, the deductible doesn’t always apply to every service included in your health plan.
Under the Affordable Care Act, some preventive care services are covered without requiring you to meet the deductible. However, this may change this year due to a pending lawsuit over certain preventive services. The U.S. Supreme Court is expected to rule on this case in 2025.
If you or a family member switches health plans during the year, some insurers may offer a credit for what you’ve already paid toward your previous plan’s deductible. This is called a Deductible Credit Transfer.
What is an insurance copayment? (Sometimes also called a co-payment.)
A co-payment is a fixed dollar amount (like $30) that you pay for a covered health care service when you visit a provider. It’s usually paid at the time of the appointment, not billed later.
The amount depends on your health plan and the type of service. Co-pays for office visits may be different from those for emergency room visits.
A related term is an in-network copayment (co-payment). This is a fixed amount (for example, $25) due for covered health care services to providers contracted with your health insurance plan. In-network co-payments are usually less than out-of-network co-payments.
An out-of-network copayment (or co-payment) is a fixed payment due for covered services at out-of-network providers. Out-of-network copayments are typically higher than copayments at in-network providers.
Copayments for you and your employees will depend on the CaliforniaChoice health plan you choose.
If you and your employees have questions about other health insurance-related terms, you will find many terms defined on the HeyHealthInsurance.com website.
Your broker can also be a valuable resource to you and your employees.