Because of the constant yearly rise of health services and health insurance premiums, healthcare has become a large portion of everyone’s personal budget. However, as these costs have increased over the last few decades, medical savings accounts have come into play to help offset them. There are a few different accounts you can choose from to help you save money towards your healthcare, but we’re only going to be looking at 2 of them: Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs). Both HSAs and FSAs are savings accounts that allow you to save specifically for medical expenses. Aside from that fact, the two accounts differ in a number of significant ways. In this article we’re going to compare and contrast them so you get an idea of what they are, how they work, and if one of them would be beneficial to you.
Health Savings Accounts (HSAs)
Health Savings Accounts are not typical savings accounts, and they are only available to people with a high-deductible health plan (HDHP). As of 2023 an HDHP is defined as any plan with a minimum deductible of $1,500 for individual coverage or $3,000 for family coverage with an out-of-pocket maximum of $7,500 and $15,000 respectively. An HSA is a triple tax advantaged account that can be used to pay for qualifying medical expenses. It’s known as “triple tax-advantaged” because your contributions to your account are not taxed, the money in the account is never taxed while it’s in the account, even if it earns interest or investment returns.
Additionally, as long as you use your HSA funds for qualified medical expenses, your withdrawals will also never be taxed. However, if you use your HSA funds for anything besides qualified medical expenses you will have a 20% tax penalty. Another great thing about HSAs is that you can actually invest your funds as well, similar to the way you would a 401K. This lets your HSA actually make you money, if you invest properly you could end up with a nice health savings account keeping you from having to pay for little to any of your healthcare.
How HSAs Work
If you open an HSA with your HDHP, you will deposit money into the HSA that you can use to pay for qualified medical expenses that your health plan does not cover. Which are any services that the IRS recognizes as a eligible medical costs these expenses include:
Acupuncture
Ambulance services
Birth control/contraceptive devices
Blood pressure monitors
Blood sugar test kits/test strips
Chiropractic therapy/exams/adjustments
Contact lenses
Copayments
Dental care
Dermatological services
Diagnostic services
Eye exams
Eye surgery
Flu shots
Gynecological care
Incontinence supplies
Infertility treatments
Insulin and diabetic supplies
Laboratory fees
Lactation expenses
Legal sterilization
Laser eye surgery/ LASIK
Menstrual care products
Nasal strips
Obstetric care
Over the counter (OTC) treatments containing medicine (i.e., cold treatments, pain relievers, sinus medications, etc.)
Physical exams
Pregnancy test kits
Smoking cessation programs
Therapy or counseling
Treatment for alcohol or drug dependency
Vaccinations
Vision care
Wrist supports/elastic straps
X-ray fees
You can use the HSA funds to pay all your medical bills until you reach your plan’s deductible, and then you can use them to cover your coinsurance or copayments until you reach your annual out-of-pocket maximum. Additionally, unlike other health spending accounts, HSA funds will never expire. Your funds roll over into the new year, every year so you don’t have to rush to spend the money in the account. One thing you should note though, is that HSAs do have a contribution limit, these limits change annually but as of 2023 if you have an individual plan you can only contribute up to $3,850 for the year. For family plans the limit is $7,750.
Flexible Spending Accounts (FSAs)
A Flexible Spending Account, sometimes called a Flexible Spending Arrangement, is a type of savings account that offers you specific tax advantages. You don’t actually set these accounts up, instead they are set up by your employer. FSAs let you contribute a portion of your pay into the account. Your employer can also choose to contribute to the FSA on your behalf, sort of like when your employer matches your 401K except the employer decides exactly how much they contribute. The FSA funds are then used to reimburse you for eligible medical and dental expenses.
How FSAs Work
An FSA is a voluntary plan that allows employees to contribute up to $3,050 a year (as of 2023) to pay for eligible medical expenses that are not covered by their health insurance plan such as:
Health insurance copayments
Doctor’s visits
Coinsurance payments
Dental work
Vision expenses
Prescriptions
Therapy and counseling services
Chiropractic care
Acupuncture
Hospital fees
Surgery costs
Diagnostic services
Allergy testing
If your employer offers group health insurance they can also offer these FSA plans as an additional employment benefit. Your employer can choose to also contribute to your FSA, they can choose to match your contributions or decide to pay a smaller amount. They are not required to contribute though, so some employers might not add into your FSA at all. If your employer does choose to contribute, their contribution typically won’t count towards your yearly limit no matter how much they contribute.
The Differences
You can’t have both of these plans at the same time, so if your employer offers an FSA but you’re also considering an HSA, you’ll want to keep these key differences in mind when you’re making your decision.
Qualifications
Compared to FSAs, HSAs have stricter eligibility requirements. To qualify for an HSA, you must have an HDHP. The HDHP has to be your only health insurance. Additionally if you are eligible for Medicare or are a claimed dependent on someone else’s taxes you can not open an HSA. On the other hand FSAs have to be set up by your employer, which automatically excludes self-employed or unemployed people. Your employer does have some qualifications they have to meet to be able to offer FSAs. For example they can only contribute to employee FSAs if they own less than 2% of the company. However, if they already offer these plans then there’s no other eligibility requirement on your end, all employees are eligible even ones without health insurance plans.
Annual contribution limits
Since contributions to these accounts are tax free they lower your taxable income. Because of this the IRS has placed limits on these plans. For FSAs the contribution limit is $3,050 as of 2023. For HSAs it’s $3,850 for individual plans and $7,750 for family plans.
Rollover rules
One of the biggest advantages of an HSA is that your funds roll over, meaning there are no time restrictions on using your funds. Since the account belongs to you, you get to decide when and how to use the funds. However for FSAs it’s not as simple. Unused funds are not automatically carried over into the new year. Since your employer owns the plan they decide what happens to the funds. Employers have 3 choices when it comes to rolling funds over:
Forfeiture – This means any unused funds will not roll over. Instead, they will be transferred to the employer.
Grace period – This is a 2 ½ month period after the plan year ends to use the last of the fund in the account, after this time frame, the funds then go to your employer.
Carryover- This allows employees to take $500 of the unused money over to the new year’s plan. Any funds left in the account after the $500 is carried over goes to the employer.
Changing contribution amounts
This is another point where HSAs are simple. You can contribute any amount you want at any time, you don’t have to keep the same contribution every time. Whereas with FSAs your contribution amount stays the same through the year. You can only change your contribution amount 3 times. First at open enrollment, when the plan renews you can decide to change your contribution amount for the new year. Next is if there is a change to your family situation such as a marriage, death, or birth you will be allowed to adjust the amount. Lastly, if you change employers when you enroll in your new employer’s health plan, assuming they offer one, you can select your new contribution amount since it’s an entirely new FSA.
Keeping your account when changing jobs
Unlike FSAs, HSAs follow you no matter how many times you change jobs because your account belongs to you. With FSA’s, they belong to your employer so unless you qualify for COBRA, you will no longer have access to your FSA if you leave your job.
Which Is Better?
If you qualify, the higher contribution limits and contribution rollover of HSAs make it the better option overall. HSAs are more flexible than FSAs, allowing you to save money over time for potential medical expenses. However, unless your job allows you to roll over $500 annually, your FSA balance will not build up over time. Depending on your employer’s decisions, unused funds are generally forfeited to your employer at the end of this year, meaning if you didn’t have many medical expenses for that year you could be losing money.
However, most of the time choosing between them is more dependent on your situation rather than which one you actually prefer to have. This is because the decision will depend if your employer even offers an FSA and whether or not your health insurance plan is an HDHP.
Getting Help With EZ
Both of these options can be excellent tax-free ways to save, invest, and pay for medical expenses, and EZ can help if you’re interested in HSAs. If you choose an HDHP, open an HSA as soon as you are eligible and begin contributing. Since these accounts continue to be one of the most effective ways to reduce expenses and improve your overall financial standing. To begin saving immediately, enter your zip code in the box below to receive free instant quotes. Or, contact one of our licensed agents at 877-670-3557.
In general, bills of any kind are met with groans, but unexpected medical bills are undeniably the worst. They have a habit of coming at the worst time and weeks or even months after you’ve seen a doctor or had a procedure. Despite the inconvenience they’re far more common than you would think even when you have health insurance. Unfortunately, not everything is covered by health insurance, which is a bitter pill to swallow considering how expensive it can be.
While we have no control over which services are covered (or how much we have to pay for them), we can understand exactly what the benefits and coverage are. As long as your deductible is met, you generally don’t have to worry about paying for routine exams, surgical procedures, or lab work. However, some procedures are excluded. These are primarily “elective” procedures, such as weight loss surgeries. Unless you are a special case, your chances of having them covered are slim. Below we’ll go over what insurance companies typically cover, what they won’t and how to avoid expected medical bills.
What Most Health Insurance Plans Cover
Typically, depending on the type of plan you have, most health insurance plans cover:
Hospitalization
Maternity and newborn care
Emergency services
Electrocardiograms
X-rays
Preventative services such as:
Annual check ups
Routine blood work
Cancer screenings
Blood glucose tests
Vaccines
Blood pressure monitoring
Blood cholesterol monitoring
The primary differences in these coverages depend on your company and the plan tier you choose. For instance, some of these could require copays or coinsurance.
What Health Plans May Not Cover
Surprisingly, there are a lot of things that are either not covered or are only partially covered by most insurance companies.
Travel vaccines
Typically, insurance companies will only cover routine vaccinations that are needed in the U.S. Tropical disease vaccines are not covered if you are traveling to other countries. Most health insurance companies see these as not medically necessary.
Acupuncture
Even though there are numerous studies that show acupuncture has real medical benefits, health insurance doesn’t agree, since it doesn’t fit into most concepts of western medicine. An acupuncture visit can cost anywhere from $100 and up, out-of-pocket.
IVF
Unfortunately, many state health insurance plans do not cover in vitro fertilization (IVF). Whether you’re having trouble getting pregnant or just simply want to go a different route to your pregnancy, the procedure can cost between $10,000 and $20,000. Currently there are only 15 states that have laws making IVF coverage mandatory for health insurance.
Cosmetic surgery
In general, health insurance does not cover elective surgeries. Meaning that if the surgery isn’t approved by your physician for medical needs rather than cosmetic reasons it won’t be covered. For instance, if you have large breasts, a breast reduction is only covered if your doctor provides sufficient evidence that your breasts are causing health problems. Make sure you talk to your health insurance provider and doctor to avoid unexpected cosmetic surgery bills.
Dental and vision
This one can be surprising, but most health plans will not cover dental or vision care. There are however add-ons that you can purchase that are basically extra coverage specifically for these types of care. Additionally, things like LASIK (laser eye surgery) are seen as elective and not medically necessary.
Weight-loss surgery
Just like with breast reductions, unless your weight is causing severe health conditions your health plan will most likely not cover it. There is no federal law requiring health plans anywhere to cover these at all. Even if your doctor deems it medically necessary it can be very difficult to get these procedures covered.
Hearing aids
This is another surprising one, you’d think that hearing aids would be automatically considered medically necessary. And many people agree with you, this has been an ongoing argument in the United States for years. But as it stands most plans won’t cover hearing aids even though they’ll cover hearing exams. Currently only 4 states require hearing aids to be covered.
Out-of-network doctors
If you are hurt outside of your plan’s coverage area you’re probably out of luck. Your health insurance will most likely not cover out-of-network doctors unless it’s an emergency. And even then it’s tricky. However, there are plan types that do have some out-of-network coverage such as Preferred Provider Organizations (PPOs). They cover these doctors much less than their network providers but there is still some coverage there.
How To Avoid Unexpected Medical Bills
The good news is that you can avoid many unexpected medical bills by taking a few extra precautions before your appointments. Here are some simple strategies recommended by patient advocates and insurance professionals.
1.Read, Read, Read!
Every January, your health insurance company will mail or email you a packet containing all the information about your plan. Although the language can be a bit jargony and difficult to read, it’s in your best interest to read through this packet thoroughly. You can’t just assume specific procedures and services are covered. That is how you end up with unexpected costs. Instead you need to read the fine print to gain an understanding of what your plan’s specific benefits and limitations are.
We recommend highlighting important parts you think can or will pertain to you. Take note of your plan’s deductible, this is the amount you have to pay during your coverage period before your plan will begin paying for medical expenses. For example if you have a $500 deductible, you are responsible for paying for your medical costs until you reach that amount. After that your plan will pay for covered services in full for the remainder of the year.
You’ll also want to note which services are fully covered. For certain preventive services, such as a flu shot, annual physical, etc, you will only have to pay a copay with the remainder being covered by your plan. These things are essentially free so you’ll want to take advantage of them.
2.Stay In-Network
Insurance companies establish a network of covered healthcare providers, labs, and hospitals. Outside of the coverage area, you will face a huge financial burden. This is because your insurance company negotiates rates with their participating providers, giving you services for a cheaper rate. In general, health insurance plans do not have to cover care from out-of-network providers. However, there are a few exceptions. All plans legally have to cover out-of-network services if it’s an emergency.
To stay on the safe side, always make sure your provider is in your network before your appointment or any procedure. Prior to something as major as surgery you will definitely want to double check what your plan will cover. Make sure the facility, anesthesiologist, and equipment are all covered under your plan. That way you don’t end up with any unexpected costs.
Even if you know your doctor or facility is in-network, always ask about coverage. If your doctor wants to perform a blood test, an EKG, or any other procedure or test during your appointment, ask if it’s covered before you consent. If the doctor is unsure, you can request the procedure’s Current Procedural Terminology (CPT) code and then call your insurance company to find out if it’s covered. This is helpful because your insurance may cover one type of mammogram for instance, but not another. Having this CPT code will make it easy for you to get a direct answer quickly to avoid unexpected bills.
4.Compare Costs
Comparing costs is a must! If your doctor sends blood work out to multiple labs, or if you have several pharmacy options near your home check the costs. One lab or pharmacy may be cheaper than another.
5.Get Preauthorization
By now it’s obvious the best way to avoid unexpected medical bills is to do your homework ahead of time. This is especially true when it comes to procedures. Most health insurance plans will require you to have pre approval for surgical procedures. If you don’t get the approval ahead of time you’ll face penalties or having to foot the entire bill yourself.
6.Expect The Unexpected
In the best-case scenario, you won’t have any medical emergencies, but plan ahead just in case. At the moment you won’t have time to call your insurer and ask which hospitals are covered. So, in your spare time, look up which hospitals near you are covered. Spend some time looking over your ambulance coverage as well. According to a study published in JAMA Internal Medicine, 85% of ambulance services end in out-of-network charges. In an emergency the most important thing is making sure you get the necessary care. We know you might not be in a situation where you can stop and ask if the ambulance ride is covered. However, in a non-life-threatening situation take a moment and ask if there’s a way to get an ambulance service that your insurance company will cover.
7.Document Everything
A simple phone call can provide you with a lot of answers to important questions. Such as whether or not a procedure is covered, if the physician is in-network, and which lab is preferred. But even after you get your answers, take one more step and get it in writing. Always request any information you get to also be sent in writing, regardless if it is a conversation with an advocate, the billing department, or a patient representative. This way you have everything you need in case you need to dispute any questionable charges.
The Final Step Work With EZ
All of that homework is a lot right? Well, here at EZ we can minimize all of this for you. By working with one of our highly trained licensed agents you can get all the answers you need in one place. They can compare all of your plans to make sure you get the best coverage for you as well as translate all the legal jargon in your insurance information packet from step 1. And they do it all for free! No hassle, no obligations. Enter your zip code into the bar below for free instant quotes to get started or call one of our agents directly at 877-670-3557.
Your company will be better protected from potential losses and liabilities if it has small business insurance. Business insurance can assist in covering claims resulting from professional errors and natural disasters. As well as bodily injuries and property damage. If you do not have this coverage for your company, you will have to to pay the cost of any claims out of your own personal assets. This forces the owners of many small businesses to make the difficult decision to permanently close their businesses. Continue reading this article if you want to learn how to obtain insurance for your small business.
Get Started
Looking for business insurance and making sure you’re getting all the coverage you need can get complicated. So, let’s break down what you need to do to start.
1.Collect information
Obtaining business insurance is as complicated as any other aspect of managing a company. In order to provide you with an insurance policy, insurance companies require a substantial amount of information about your needs, risks, coverages, and costs.
You might be familiar with some of it or have it handy. While other details might be trickier to track down. EZ can help in that regard. We have helped thousands of other customers through the commercial insurance application process. So, we know what is required of you and how to get it. Let’s go over the requirements so the application process goes as quickly and easily as possible.
Business Operation Information
Your insurance agent or company will need a thorough understanding of your company’s operations in order to provide you with an accurate quote. If you’re in the contracting business, for instance, it’s not enough to know that you’re an electrician. The percentage of commercial versus residential work you do, whether or not you use subcontractors, do you use ladders or scaffolding, do you install alarms, etc., are all relevant details.
The types of questions you’ll be asked vary widely by profession. It’s fine if you don’t know the answers right away. But you’ll save time and energy if you have a solid grasp of your operations before beginning the application process. In order to receive quotes from insurance companies based solely on operational exposures, you must be as specific as possible with your agent.
Ownership and Experience
Questions about yourself, such as how long you’ve been in business and how much experience you have, will be asked. As well as questions about your company’s operations. Your quote will be based on the information you provide to the insurance company regarding the business’s owners and, in some cases, employees. If your resume is strong, you may be able to negotiate a lower price.
Financial Data
Get some numbers ready. Your insurance agent or provider will inquire about projected earnings, employee headcount, outside vendors, and stock on hand. These estimates are predicated on the length of your policy, which may or may not align with your fiscal year. If your policy is audited at the end of the policy term and you were wrong in your projection, you could be penalized. However, you are not required to provide any confidential reports.
Contracts
If you use contracts with customers, your insurer will probably want to see a sample to make sure you’ve included all the necessary safeguards to protect your business from claims and lawsuits. If you offer professional or other services but don’t have a contract, you may be required to draft one before receiving an estimate.
Claims History
You will also need copies of your “loss runs,”. Which are the insurance term for the report that details all insurance claims made on behalf of your company. A three to five year claims history across all of your policies is typically required by insurance companies. If you are unable to obtain these reports from your current insurance agent, the quoting process will be significantly slowed down. Your insurance agent will be able to assist you in writing a letter to request these reports.
Any Current Policies
Although it’s not required for a quote, having copies of your current policies on hand can help the insurance agent review your coverage and identify any potential gaps. The truth is that a lot can change in a year. It is possible that a policy review will serve as a prompt to either add or remove pieces of machinery, vehicles, etc.
2. Research
When was the last time you purchased something that needed to be assembled, but you chose to ignore the instructions? How did you determine that it was constructed properly? Unless you follow the steps, it is difficult to know for sure what the outcome will be. Obtaining the appropriate insurance for a small business is no different.
Reading the instructions isn’t nearly as interesting as learning about the different types of business insurance. Even though you might want to skip this step, spending as little as twenty to thirty minutes doing research could end up saving you a lot of time and money. You don’t need to become an expert. But having a fundamental understanding of the coverage options will help you make better decisions. Regardless of how long you’ve been in business, whether or not you seek the assistance of a professional. The first part of your research should be knowing the types of insurance available.
Types Of Business Insurance
General Liability – For a smaller company, this can be a lifesaver in the event that you are sued for damages or injuries caused by a third party.
Group Insurance – Group insurance is a great way for small businesses to provide health care coverage and other medical benefits to your staff.
Workers’ Compensation – In the event of a workplace injury or illness, these policies will pay for the employee’s medical care, ensuring their safety.
Property Insurance – Coverage is good in the event that a company’s inventory or technological equipment are damaged or destroyed as a result of a natural disaster.
Commercial Auto – This covers any vehicles that your company uses for work.
Business Owner’s Policy – Small business insurance is a type of business insurance package that protects businesses from a variety of risks, including those associated with property and liability.
Every business has its own set of needs. Once you know the basics of business insurance, you should look into which ones are best for your business. For instance, an accountant who works from home might have a basic general liability policy. But an accountant who owns a building that customers come to would be better off with a business owners policy, or BOP, that covers more. Even though both accountants do the same job. There are differences in how they do it that affect their insurance needs.
3. Contact a Business Insurance Agent
You can work with an EZ agent who specializes in small business insurance to get the coverages you need. To work with our experts, you can get a free quote online. Talking to your insurance agent about your business can help you figure out what you need and how much coverage you need. They can help you figure out what kinds of coverage you can get and how much it will cost.
How To Determine The Business Insurance You Need
What kind of insurance is best for your business depends on your specific needs and the laws in your state and industry. You’ll need to carefully look at your business to figure out what kinds of insurance you need. Talking to an insurance expert is always a good idea if you want to find the right mix of coverage to make sure your business is legal and financially safe.
1. Analyze your legal responsibilities and business assets.
First, you should take a close look at your business and assets to figure out what you want to insure. What kinds of insurance are required by law, and where do your other responsibilities lie? For example, a machine shop might want to make sure its workers are covered in case they get hurt, while a jeweler might want to make sure they aren’t robbed. As required by law, the owners of a large distribution company would insure both their goods and their employees. Each state has its own rules, so make sure to talk to your agent to figure out what you need to insure.
2. Analyze Your Risk
Look at your new risks and responsibilities. This will help you figure out what kind of insurance will protect your business the best. For example, if your business is on the bottom floor of an office building in a flood-prone area. You’ll probably want comprehensive flood insurance. A business in a dangerous industry will probably want insurance to cover the risk of its employees getting hurt.
3. Decide How Comprehensive Your Coverage Needs To Be
Depending on what you’re insuring, you may need basic insurance or insurance that covers everything that could go wrong. Think about how much the loss would cost and how likely it is to happen. This will make it less likely that you will pay too much for coverage you don’t need or not get enough coverage for your safety.
How EZ Can Help
EZ can help whether you need group health insurance for your employees or commercial insurance to protect your business. Our agents work with the best insurance companies in the country to make sure you and your employees get the best insurance. In fact, we can find you the best coverage for your budget and save you hundreds of dollars a year. Call us at 877-670-3531 for help with group health insurance or 877-670-3538 for help with commercial insurance.
There are associated costs when enrolling in a health insurance plan. These costs include premiums, coinsurance, and deductibles. The deductible is what we will concentrate on in this article. Your deductible is the amount you pay out-of-pocket before your health insurance starts to pay your covered medical services for the remainder of the year. By “remainder of the year”, we mean that your deductible renews annually. Therefore, it’s important to understand how to meet the deductible before it renews and what happens after you’ve met it.
What Counts Towards Your Deductible
Not knowing which expenses count toward your deductible could lead you to throwing money away. There are 3 basic things to remember if you want to know what payments count towards it. Any out-of-pocket payment that is:
Medically necessary
For a service covered by your plan
Within your network
To simplify further, the following are some of the medical services you pay that would count towards your deductible:
Hospital bills
Surgery costs
Lab tests
MRIs and CAT scans
Anesthesia
Doctor visits not covered by copays
Medical devices such as pacemakers
To give you a real-world example, if you have to have a procedure, you must first pay your deductible before the insurance company will cover the remaining costs. Say the surgery costs $25,000 and your deductible is $2,000. You will pay $2,000 and then the insurance company will pay the remaining $23,000.
What Doesn’t Count Towards Your Deductible
It’s just as important to know which expenses don’t go towards your deductible. This way if you’re keeping track (which you should be) you won’t think you’ve paid more towards your deductible than you actually have.
A copay is the portion of your medical expense that you are responsible for usually at the time of service. Typically copays are a modest, set amount. For example, you may have a $25 copay every time you visit your primary care physician (PCP). Or you may have to pay $15 every time you fill a prescription. The amount for each service varies depending on your insurance company and plan. Unfortunately these payments don’t count towards your deductible. They do however count towards your out-of-pocket maximum, which is the max amount of money you have to spend on your healthcare in a single benefit year under your plan.
Coinsurance
Your coinsurance is another cost-sharing part of your health plan. This is usually shown as a percentage and shows exactly the percent you have to pay and the percent your insurance has to pay after you have met your deductible for the year. For example if you have a 20% coinsurance for a covered service, your insurance company will pay the other 80%. Say you’ve already met your deductible and you need a procedure that costs $1200,with your 20% you pay $240 and your health insurance will pay the remaining $960. Just like with copays, your coinsurance won’t count towards the deductible, but it does count towards your out-of-pocket maximum.
Premium
Your premium, as you know, is the amount you pay monthly to keep your health insurance policy active. While your premium and deductible do have a significant relationship, since the lower your premium the higher your deductible and vice versa, it still doesn’t count towards your deductible. Your premium will also not count towards your out of pocket maximum either.
Out-of-network care
Out-of-network care means you went to a provider that is not contracted with your health insurance plan. None of your costs with this provider will go towards your deductible or your out of pocket maximum. The only exception to this rule is if you have a health plan that does have out-of-network coverage such as a Preferred Provider Organization (PPO). A PPO has 2 out of pocket maximums, one that works like every other plans maximum and one specifically for out-of-network services.
Services not covered by your plan
If you get care that your plan does not cover it won’t count towards deductibles or out of pocket maximums either. This can include things like chiropractors, acupuncture, dental, and vision services.
Family Plan Deductible
Deductibles work differently for individual plans than they do for family plans. A family deductible is the maximum amount that a family must pay out-of-pocket before they start paying coinsurance or copays, rather than the full cost of services. Most family health insurance policies have 2 deductibles. The first being each individual member has their own individual deductible and the second is the overall family deductible. Each time a family member pays towards their own deductible the amount is also credited to the family deductible. If one member meets their individual deductible before the others, then full coverage begins for that person alone, but not for the other family members.
Once the family deductible is met then everyone will receive post-deductible coverage even if not all members met their individual deductible. Family plan deductibles are typically double the amount of an individual plan’s deductible. Although deductibles can vary, it’s uncommon for a family to pay more than the cost of 2 individual deductibles in a single year. This obviously doesn’t apply if each family member has separate policies, as the policies will not coordinate together.
High Deductible Health Plans (HDHP)
Whether you have a family plan or an individual plan you have an option with your deductible. A HDHP is not just a plan that appears to have a high deductible, it is a distinct type of health insurance – not just a generic term. A high-deductible health plan is a health insurance policy with a deductible of at least $1,400 for individual coverage or $2,800 for family coverage. These plans also allow you to make contributions to a tax-advantaged Health Savings Account that can help you save money towards your health care. A policy with a high health insurance deductible will save you money on premiums, but you may be responsible for out-of-pocket expenses of up to $8,700 for individual coverage and $17,400 for family coverage.
In recent years, HDHPs have become increasingly popular. This is because they come with lower premiums. However, even though your monthly premium is lower your out-of-pocket medical expenses tend to be a lot more expensive than someone with a LDHP. Low deductible plans come with a higher premium, but medical expenses are lower. If you expect to have very few medical expenses then a HDHP might be right for you. This is because the low premiums combined with a deductible you rarely use may save you more money. LDHP are best for people with chronic conditions or families who expect to have multiple doctor visits per year. This reduces your upfront costs allowing you to manage your expenses easier.
Once You Meet Your Deductible
After you’ve met your annual deductible, your insurance will begin paying its portion of the cost of your covered care for the remainder of the year. After meeting it, your portion of the cost of care will either be a copayment or coinsurance. It’s important to note that any health insurance plans purchased on the Marketplace legally have to cover the cost of some preventative healthcare services even before you meet your deductible. This is for any plan regardless of type or tier. Some of these preventative benefits include:
HIV screening
Blood pressure screenings
Obesity screenings and counseling
Lung cancer screenings
Fall prevention
Tobacco use screenings
FAQs
When does my deductible renew?
Many health insurance plans base their renewal on the calendar year. This means that on January 1st of each year any expenses you have paid towards it are zeroed out. Some health plans may follow a plan year schedule instead. This means that it will renew on the date that your health insurance policy renews in the new year rather than January 1st. Understanding your plan’s deductible schedule can help you avoid unexpected medical costs. For example, if you were planning on waiting until after the holidays to get a medical service, and your plan renews based on the calendar year, you’ll want to rethink that plan. On the other hand, if it renews on your plan renewal date, you may have some wiggle room.
What does “no charge after deductible” mean?
This phrase means that once you meet your deductible the insurance company will cover the full cost of covered medical expenses, up to the plan’s limits. However, most health insurance plans usually only pay 100% of medical costs once you’ve reached your out-of-pocket maximum.
Is my deductible the same as my out-of-pocket maximum?
No, they work similarly in that they serve as a limit to how much you have to pay for your covered medical expenses, but the limits are two different things. Your out of pocket maximum is the most you will pay in one year. Once you’ve met this limit your insurance will cover 100% of all additional covered medical costs for the year in full. Your deductible is how much you pay before your plan begins their cost-sharing feature with you, such as your coinsurance.
Anything that counts towards your deductible also counts towards your out-of-pocket maximum as well. As noted above, there are some costs such as your copays and coinsurance that don’t count towards it, but will count towards your out-of-pocket maximum. Think of your deductible as a milestone, once you reach it you pay significantly less towards your healthcare, reaching your out-of-pocket maximum is the end game once you reach that you pay nothing towards your covered healthcare costs.
Working With EZ
EZ.Insure offers access to local, highly-trained insurance agents who will shop around for the most cost-effective policy. We can save you hundreds of dollars annually by searching for a suitable plan both on and off the Marketplace. We can also determine whether you qualify for local discounts and apply them to your plan. The best part is that we do all of this without charge! Simply enter your zip code into the box below to receive free, instant quotes, or call us at 877-670-3557 to speak with an agent who can answer all of your questions and find you the ideal plan.
When you’re shopping for health insurance, you’ll come across several plan types to choose from. Two of which are Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs). While there are several other options, these two are the most common. Both plans provide various types of coverage, including network sizes, costs, and coverages outside of the network. You will want to make sure the plan you choose will fit all of your needs and allows you to stay within budget. Choosing one isn’t as difficult as it may seem. Below we’ve detailed both of these options and compared them for you.
An HMO is an affordable health insurance plan that provides a network of healthcare providers to choose from. HMOs offer cheaper coverage because their networks are smaller than other plan’s networks. HMOs are known for their lower lates, but that comes with less flexibility. The network is the key to this type of coverage. Providers within this network such as doctors, hospitals, labs, and specialists all have contracts with the insurance company. Meaning they are paid to offer you, the policyholder, a variety of health services for less. Typically you’ll find that these networks operate in a specific geographic area. Meaning you must see providers within that area. It also means that any fees associated with the plan will be based on the population of your area. For example, heavily populated areas with higher cost of living will result in higher fees. Even though HMOs offer less flexibility, their premiums are lower than other plans. Their smaller networks and the fact that you are being directed to the plan’s providers rather than out-of-network providers, means the savings pass directly to you.
With PPO plans, you have much more freedom in choosing your doctors and hospitals. Staying in-network always provides the best benefits because you pay less for those services. However, unlike HMOs, you are not restricted to in-network providers, but it will cost you more than seeing in-network providers. PPO plans are generally more expensive due to their higher monthly premiums. Nonetheless, the increased flexibility more than compensates for the higher costs. You are not required to choose a primary care provider (PCP) and you can visit any doctor, including specialists, without a referral. All of this means you pay more and you are responsible for managing and coordinating your own care without a PCP, unless you decide to choose one.
How They Differ
Now that you know the basics of each plan, let’s compare the differences between HMOs and PPOs including network size, the ability to see specialists without referrals, costs, and out-of-network coverage. Compared to PPOs, HMOs are much more affordable. However, PPOs offer a lot more flexibility with their specialists and larger networks. As well as their out-of-network coverage. Below we’ll go into these comparisons a little more.
Networks
Both HMO and PPO plans have provider networks. In exchange for access to a health plan’s members, network providers agree to offer discounts to reduce health care costs. This saves money for health insurers, but it also saves money for you, the policyholder; savings for the insurer can translate into lower premiums, deductibles, and copayments. Overall, PPO networks include more physicians and hospitals than HMO networks, giving you more options. However, networks will vary from insurer to insurer and plan to plan; therefore, it is best to look into each plan’s network before making a decision.
Primary Care Physicians
The majority of HMOs will require you to choose a primary care physician, who will serve as your primary point of contact for medical care. If your primary care physician determines that specialized care is medically necessary, he or she will refer you to a specialist for treatment. Specialists costs will not be covered without a referral from a primary care physician. PPOs, on the other hand, typically do not require the selection of a PCP, and you can typically see a specialist without a referral and those costs are covered.
Out-Of-Network Coverage
For both PPO and HMO plans, you will get the lowest costs for care if you use in-network providers. The coverage for out-of-network care varies significantly between these two types of plans. Out-of-network services are typically not covered at all by HMOs, except in the case of an emergency. PPO plans typically provide some coverage for these services, but as always, staying in the network will always mean less money out of your pocket.
Costs
PPO plans will typically be more expensive than HMO plans due to the additional coverage and flexibility they provide. When we consider health plan costs, we typically consider monthly premiums. HMO premiums are typically less expensive than PPO premiums. The plan’s deductible is also another factor you need to consider. This is the amount of out-of-pocket health care expenses you must pay before your plan begins to pay for your expenses. When HMOs have deductibles, they tend to be less expensive than PPO deductibles. Below we’ve provided examples of costs for each plan.
HMO Costs
These are examples based on average costs, they can vary depending on your age, where you live, plan tier, as well as number of dependents.
21-year-old – Single $342, couple $684, couple with 1 child $944
30-year-old – Single $390, couple $780, couple with 1 child $1,040
40-year-old – Single $438, couple $877, couple with 1 child $1,1,37
50-year-old – Single $613, couple $1,226, couple with 1 child $1,487
Along with lower premiums, HMOs typically have lower or sometimes no deductibles. A copayment is instead required for each clinical visit, test, and prescription. Copayments for HMOs are typically $5, $10, or $20 per service, which reduces out-of-pocket expenses and makes HMO plans more affordable.
PPO Costs
As with all plans, the premiums are determined by age, location, and the number of dependents covered by the plan. For instance, average monthly premiums for PPOs are:
21-year-old – Single $404, couple $807, couple with 1 child $1,113
30-year-old – Single $458, couple $916, couple with 1 child $1,222
40-year-old – Single $516, couple $1,032, couple with 1 child $1,528
50-year-old – Single $721, couple $1,442, couple with 1 child $1,748
PPO plans typically have higher deductibles than HMOs. Generally the annual deductible for a PPO is around $1,500. If your PPO plan includes a copayment for office visits, you will only pay a small copayment when you see a doctor in your preferred network. If your PPO plan does not include a copayment benefit, your visit will be charged at the preferred network rate and applied to your deductible. Going “out-of-network” will be more expensive. You may also have to pay the doctor directly and then submit a reimbursement claim to your PPO.
PPOs also have 2 out-of-pocket maximums. Meaning you will never pay more than a preset amount for your care in a given year. One limit applies only to in-network costs, while the other applies to both in-network and out-of-network costs. If you require extensive care or expensive procedures, these limits may protect you from racking up excessive costs. In 2023, the out-of-pocket maximum for Marketplace plans cannot exceed $9,100 for individuals and $18,200 for a family. This means that in 2023, if you pay more than $9,100 in out-of-pocket medical expenses, your insurance will cover 100% of any additional medical expenses.
Choosing Between Them
When deciding between these two plans, it’s best to consider how much you are willing to pay, how much coverage you need, and whether or not you want to see a PCP less frequently or see a specialist without a referral. In general, HMOs have a lower cost. So, if your budget is your biggest deciding factor then an HMO may be for you. With lower premiums and low to no deductibles being your benefits, but you’ll sacrifice the flexibility of choosing providers. If you travel a lot or have a chronic condition, you may need to see a doctor once or twice outside of your network. So, if you’re more interested in flexibility, a PPO plan may be the better option.
Now that you know the difference between the two main types of health insurance, you might have a better idea of which plan fits you better. If you need more information you can start by visiting our PPO and HMO pages. These pages have more in depth explanations of each plan’s benefits and limitations. Everyone should carefully consider their health insurance options. Your particular circumstances, such as your health, finances, and quality of life, will determine the optimal plan for you. EZ.Insure can assist you in choosing between the two plans and determining which one best meets your needs and budget. We provide you with a local licensed agent who will go over all available plans in your area. They will provide you with quotes for all available plans, explain what each plan covers, and sign you up at no cost. Our services are entirely free! Simply enter your zip code in the box below to receive your free instant quotes, or contact an agent by calling 877-670-3557.
Has shopping for health insurance left you confused and frustrated? Don’t worry, we’ve got you. Shopping for health insurance can feel about as easy as getting home during rush hour traffic, but understanding your options and how to choose plans is important. To help we’ve put together a list of questions for you to ask while choosing a plan. These questions can help you sift through the various plan details and help you decide which ones are best for you, your family, your health, and your budget. Think of it as your health insurance cheat sheet.
With these questions in your pocket, you’ll be able to confidently compare health plans. Whether you’re selecting a plan for the first time, or if you’re thinking about changing your current plan, these questions are important to keep in mind.
How Much Does the Plan Cost?
You’ll want to carefully look over plan prices, not just the premium, you’ll want to know how much the other out-of-pocket costs will be as well. Premiums, deductibles, copays and other costs of health insurance all vary from plan to plan and state to state. So, comparing is key here to make sure you get a plan that fits within your budget. We’ve gone into a little more detail about each of the costs you’ll want to research below.
Your Premium
This is the monthly fee you pay for your insurance company to provide you and your family with coverage. The cost of your premium will vary depending on a few factors. First, the majority of insurance companies will underwrite you before they insure you. Meaning they will collect all of your health data and use them to determine your “risk factor”. Other variables include your age, your lifestyle, and sometimes even where you live.
Your Deductible
Before your plan will cover your medical expenses, you have to first meet your deductible. For example, say your plan carries a $1,500 deductible and you need a surgery that costs $3,500. You will have to pay $1,500 and then your company should cover the remaining $2,000. Keep in mind, your premium will not count towards your deductible. The things that will count towards it are any bills you pay for hospital stays, surgeries, lab tests, anesthesia, doctor visits that aren’t covered with a copay, and medical devices such as pacemakers.
Your Copay or Coinsurance
When you visit the doctor or fill a prescription, you’ll pay a copay upfront. It’s a flat fee, typically between $10-$30. Each part of your health services may have different copays such as $30 per doctor visit or $20 per prescription, but each of those services will always have that same copay. For instance, if you injure your back and visit the doctor, or if your child’s asthma medication needs to be refilled, the copay amount – for that visit or medication will remain the same.
Coinsurance is the portion of medical expenses you are responsible for after your deductible has been met. Coinsurance is a way of saying that you and your insurance company each pay a portion of the eligible costs that total 100%. For instance, if your coinsurance is 20%, you are responsible for 20% of the cost of your covered medical expenses. Your health insurance will cover the remaining 80 percent.
What Kind Of Coverage Do I Need?
After deciding your budget, the next question is about coverage. Do you have health conditions? Do you know you see the doctor often? Are you healthy? There’s a large variety of plans that will give you more coverage if you aren’t healthy, or less coverage if you are healthy. That way you don’t pay for coverage you don’t need, and you know the things you do need will be taken care of.
Health Maintenance Organizations (HMOs) provide access to doctors within their network, whereas Preferred Provider Organizations (PPOs) provide access to a larger network at a higher cost. There are also 4 plan tiers available: Bronze, Silver, Gold, and Platinum. Each tier has varying prices with varying coverage. If you want a low monthly premium and are healthy, a Bronze or Silver plan is your best option. While Gold and Platinum plans have higher premiums but lower deductibles. Making them ideal for anyone with medical conditions that need more care.
Is My Current Doctor In The Plan’s Network?
One of the most common concerns while searching for health insurance is whether or not you can keep seeing the doctors you already have. If you have ongoing medical conditions, or simply just like your current doctor, the last thing you want to have to do is switch doctors. It means having to explain your entire medical history and probably retake tests you’ve already had done. It can also bring up an issue if your new doctor doesn’t agree with your old doctor’s diagnosis or treatments. Your doctor is definitely one of those situations where familiarity is important. When you’re shopping for health insurance, find out what the plan’s network looks like. The network isn’t just primary doctors either, it’s also hospitals, facilities, and specialists as well. You don’t want to find out too late that the hospital closest to you doesn’t accept your insurance.
Are There Extra Benefits or Perks?
This may seem small, but it can be the selling point between one plan over another. Some plans will offer things like dental and vision discounts, telehealth, gym memberships, etc. You’ll want to decide if you want the bells and whistles or if you don’t really care for them. These perks can be offered as “free”, but keep in mind the more benefits a plan has the more expensive your plan is likely to be.
Will My Plan Travel with Me?
If you travel frequently, whether for work or leisure, you should make sure your plan has the freedom and flexibility you’ll need, regardless of where you are when you need it. You’ll want to look at the network again, and the budget. Will you pay more for out-of-network facilities and doctors? If you do pay more, can you be reimbursed? If it’s Christmas and you’re four states away visiting family and you need the emergency room the last thing you want to do is worry about a giant medical bill.
Is My Medication Covered?
Two-thirds of adults in the U.S. use prescription medications, so there’s a good chance you will too, if you don’t already. It’s not uncommon for you to get caught up in the other details of your health plan and forget to look at the prescription drug coverage. These costs can rack up quickly, so be sure to look at the plan’s drug formulary before you enroll. The formulary is a list of prescription drugs that are covered as well as their associated costs. That way you can better budget for any medications you currently take, as well as any antibiotics you might need in the future.
Will This Plan Cover Alternative Therapies?
If you’re interested in alternative therapies (alternative medicine) you’ll want to make sure those will be covered as well. Some alternative medicine would be a chiropractor, having a home birth, or getting acupuncture. Different health plans handle these types of services differently. In some circumstances they can be covered similarly to your other health care. On the other hand, some plans might have minimal or no coverage for alternative therapies. If this type of care is important to you, make sure to look closely at the plan’s benefits in detail.
Who Can I Call With Questions?
Most people agree that, when it comes to health insurance companies, the worst part is the lengthy phone calls. There is typically a customer service line, but you’ll most likely deal with a lot of transfers or possibly be placed on hold for long periods of time. Some have direct numbers for agents to speak to you directly or chat services where you can virtually ask your questions. Most will even have a discussion forum where you can find the answers to some of your questions. The worst systems are the automated phone systems, where you have to listen to several menus and hope what you need is on the list. There’s a way to avoid all of that hassle and uncertainty though: giving one of EZs agents a call.
EZ.Insure provides highly trained agents in your region who can answer all of the above questions and then some. You get to speak with a real person, -skip the automated line, and get all of -the information quickly. The best part? It’s free! We will assign you to your own personal agent who will search and compare all available plans in your area at no – cost. We make sure to find you plans that fit within your budget without sacrificing coverage needs. To get your instant free quotes today simply enter your zip code in the box below or give us a call at 877-670-3557 to speak to an agent directly.
