Make sure you understand these key health insurance terms.
As a small business owner, entering the benefits world can be intimidating. You know you need them to attract and retain great employees, but how can you know you are making the right choices? Before you can understand what you’re looking at, it’s important to have the right vocabulary on your side. Here are some of the health insurance terms that all small business owners should know.
Premium
The health insurance premium is the amount that will be paid to the insurance company in order to keep coverage active. While the premium is one of the factors in play when choosing a healthcare provider, other costs, like deductibles and copayments, need to be considered. In general, choosing a lower premium plan with a higher deductible is a great idea if you are young and in good health. If you want lower copayments and costs at the time of treatment, choosing a higher premium plan is best.
Copayment
One of the most commonly seen health insurance terms is the “copayment.” The copayment associated with your health insurance plan is the amount you need to pay to get a particular type of healthcare service. For example, in order to visit your primary care doctor in their office, you might need to pay a $15 copayment. Your health insurance might have a $25 copayment at the pharmacy for a certain brand of medication.
Deductible
The deductible for your health insurance plan is the dollar amount you will pay before the insurance company will handle the rest of your covered claims. The premiums that you are paying typically do not count toward this number. In general, even if you are in good health, it’s a good idea to keep your deductible below 5% of your annual income in the event that you are injured and need to take advantage of it.
Maximum Out-of-Pocket Cost
One of the most important health insurance terms to know is “maximum out-of-pocket cost.” This number tells you the maximum amount you could be expected to pay out of pocket. After you’ve hit this amount through a combination of copayments and deductibles, your insurance company will handle the additional covered medical expenses in full without requiring you to continue making copayments.
Find the Right Health Insurance Solutions for Your Needs
Malden Solutions has a wealth of expertise in providing employer insurance solutions, HR solutions, and individual insurance solutions to businesses both big and small. Our team of seasoned professionals can help you navigate the rapidly-changing world of insurance with ease. We partner with businesses and individuals throughout the country to provide our dedicated services for employee benefits but also work within our surrounding communities in Maryland, Northern Virginia, and Washington, D.C. Contact us today to learn more about how we can provide effective, dynamic solutions for your business. Stay connected with us on Twitter, Facebook, and Linkedin.