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By Lively | November 07, 2017

Open Enrollment Jargon

There is a lot of healthcare jargon that further complicates and confuses us during the open enrollment period. We will help you remove that confusion so you can better review, compare and select health insurance plans during this open enrollment season.

There are many terms that are crucial to your understanding of healthcare plans. These terms will affect the level of health coverage and cost. Don’t let these terms fool you into a plan that doesn’t work best for your financial and health future.

These are the key terms you need to know to uncover the key components of your healthcare coverage.

Key Terms for Open Enrollment

  • Plan Start Date – Open enrollment has begun, but that doesn’t mean as soon as you sign up for health insurance, your plan will start. Your effective plan start date is when your coverage begins. Make sure you understand when your coverage begins so you don’t get stuck with a medical bill and no insurance to help you cover the costs.
  • Monthly Premium – These are the monthly set costs for your health insurance coverage. It is likely the easiest part to understand in this process.
  • Co-Pay – These costs are typically associated with PPO plans. They are the set costs, designated by your insurance provider for service.  They are also often required at time of service.
  • Coinsurance – This is the amount that you pay as a percentage (%) of the total cost of service. Your insurance plan will cover the rest.
  • Deductible – Deductibles are set yearly amounts that individuals (and families), must meet before their insurance coverage begins. This is crucial to understand because even though you are paying a monthly premium on day 1, until you meet and exceed your deductible limit, you are still responsible for 100% of your health costs.
  • In-Network vs. Out-of-Network – From a technical perspective in-network providers have contracted rates with your insurance company, while out-of-network do not. For you (or your family), this likely means different coverage levels and costs (typically higher for out-of-network providers and services). Make sure you double check that your primary care doctors (and even specialists) are included in your list of in-network providers (or plan for the expected higher costs accordingly).
  • Annual Out-of-Pocket Maximum – This is the maximum amount you could pay in the plan year. In the case that you have a large medical cost, this maximum limits your total payment requirement (and risk). After you meet this maximum, your insurance company will pay the rest of your qualified medical expenses. This is a key insurance parameter to limit your financial exposure.
  • Qualified Medical Expense – Understanding what procedures, prescriptions, and related health costs are covered as part of your plan can drastically alter the value it provides for you. These lists can be long and cumbersome and can even set limits on the total expenses per category (like physical therapy visits for example). While it is hard to plan for unexpected costs, comparing your expected procedures and expenses for the next year, can help you understand any additional out-of-pocket expenses you might incur. In addition, under IRS regulations eligible qualified medical expenses can be used for your FSA or HSA tax-free dollars. You can see a full list of HSA qualified medical expenses here or review the list on the IRS website here. You can also visit HSA Store to find and purchase thousands of eligible expenses.

It sounds cheesy, but knowledge is power. This knowledge will help you make more effective healthcare decisions during open enrollment so you can select the right healthcare plan for you and understand the exact expected (and unexpected) costs you might incur.

If you need more help with open enrollment decisions, check out our blog. We will make you a healthcare benefits expert in no time, without any extra work or effort on your end.