Merritt Personal Lines Manual: Deductible, Co-Payment, Reimbursement

Insured employees with dependent coverage must meet the deductible before expenses will be covered. But, plans typically include some type of family deductible in order to limit a family's exposure for health care expenses.

A family deductible is usually some multiple of the individual deductible, often two or three. For a family deductible to be satisfied, the combined expenses of covered family members are accumulated. Some plans require that at least one family member satisfy the individual deductible before the family deductible can be met.

Co-insurance is a feature typically found in group health plans. It sets the percentage of covered expenses that the employees and the health plan will pay. The most common coinsurance level is one in which the employee pays 20 percent of the expenses and the insurance company pays 80 percent.

A covered expense is an eligible expense under a group health insurance plan. It is an expense that will be reimbursed in whole or in part. An example: Most health plans, consider doctors' visits a covered expense. That is, any doctor's fee you incur up to the amount provided by your plan.

However, just because an expense is covered does not mean that the coverage is unlimited. Both basic and comprehensive plans have limits on the amount of expenses for which they will reimburse. In addition, you usually have to pay some form of deductible and coinsurance before they will reimburse the expenses.

Insurance companies limit covered expenses in a number of ways. Example: Your insurance company can cap allowable payments for a certain procedure or service (i.e., a surgical schedule). Some insurers also restrict covered expenses by limiting the number of visits or days for home health care or skilled nursing care or by establishing a reasonable and customary charge.