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Top 10 Terms to Know When Choosing a Health Insurance Plan

Navigating health insurance can be overwhelming, especially during open enrollment. Employees who make informed decisions about their benefits secure the right coverage at the right cost. Sharing this guide to essential healthcare terms with employees can help them better understand their options and choose the best plans for their needs.

  • Premium:  The monthly cost of health insurance coverage, often deducted directly from an employee's paycheck. SAVVI helps brokers and employers design benefits packages that ensure employees get the full value of their benefits while balancing premium costs.
  • Deductible:  The amount an employee must pay out-of-pocket before the insurance company begins covering healthcare costs.  By considering employees' unique healthcare needs and financial situations, SAVVI decision support helps assess whether high-deductible plans (HDHPs?CDHPS) or more familiar HMO or PPO plans are truly cost-effective for employees.
  • Copayment (Copay):  A fixed fee an employee pays for specific healthcare services, such as a doctor's visit, after meeting their deductible. SAVVI financial support analyzes copay structures to help employees understand when and how they apply, minimizing unexpected costs.
  • Co-insurance:  The percentage of healthcare costs shared between the employee and the insurance company after the deductible is met.  SAVVI's decision support often integrates the company contributions to calculate potential coinsurance expenses, enabling employees to plan for their true out-of-pocket costs.
  • Out-of-Pocket Maximum:  The maximum amount an employee will pay for covered healthcare services in a plan year, after which the insurance covers 100% of costs.  SAVVI guidance highlights the importance of out-of-pocket maximums in protecting employees from catastrophic health expenses and will often recommend supplemental insurance to provide full coverage for households.
  • Network:  The group of healthcare providers contracted with the insurance company to offer services at lower rates. SAVVI evaluates all available plan options, helping employees understand how to choose and access quality care without overspending.
  • Health Savings Account (HSA):  A tax-advantaged account for employees enrolled in high-deductible health plans used to pay for qualifying medical expenses. Savvi decision support will evaluate HSA accounts and available health plans to help employees maximize their HSA account options and contributions and understand long-term savings potential.
  • Flexible Spending Account (FSA):  A tax-advantaged account for healthcare expenses, with contributions typically forfeited if not used within the plan year.  SAVVI guides employees on which spending accounts make sense and how to best utilize their FSAs to avoid losing their hard-earned money.
  • Explanation of Benefits (EOB):  A statement from the insurance company detailing what the insurer covers for a medical service and what the employee owes.  SAVVI helps demystify EOBs, ensuring employees fully understand their coverages and which benefit choices make sense for their household.  
  • Prior Authorization:  The insurance company must approve certain services before they are provided to ensure they will be covered.

By sharing this guide with employees, you are helping them gain knowledge and make informed decisions about their health coverage. SAVVI supports you every step of the way, ensuring employers and employees get the most value from their benefits. Interested in learning more about how SAVVI can help? Click here to schedule a 15 minute chat. Or simply call 781-583-7017 or email at sales@savvifi.com.

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