Medical Plan terms

Copay: a flat dollar amount that you pay up front for certain services when using network providers. Copays don’t count toward your deductible. The amount of any copay depends on the medical option you choose. For example, under the preferred provider organization (PPO), you pay a $25 copay for an office visit with a network doctor.

Coinsurance: a percentage of the cost for covered services that you are responsible for paying after you pay the deductible. Coinsurance applies for the same types of services that require you to pay a deductible and kicks in once you’ve paid your deductible in full. If you elect medical coverage through the Board of Pensions, your coinsurance is 20% when using network providers; the plan pays the other 80%.

Deductible: a specified dollar amount you pay each year for covered medical services before the plan begins to pay benefits. The deductible amount depends on the medical option you choose.

Exclusive provider organization (EPO): a type of health plan that’s similar to an HMO in that it requires members to use network providers to receive plan benefits. An EPO does not cover care received from out-of-network providers (except in emergencies). The EPO offered through the Board of Pensions is different from some HMOs in that you don’t need a referral to see specialists, and you aren’t required to select a primary care physician (PCP).

Formulary: a list of preferred medications (both generic and brand-name) that are covered by a health plan. The plan formulary is reviewed and approved by a group of doctors and pharmacists based on clinical effectiveness and cost.

Health savings account (HSA): a tax-advantaged savings account that can be used to pay for current and future healthcare expenses, including deductibles and coinsurance. To contribute to an HSA, you must be enrolled in a qualified high deductible health plan (HDHP), such as the one offered through the Board of Pensions.

High deductible health plan (HDHP): generally, a type of health plan with a deductible higher than a typical health plan’s and, except for network preventive care, for which members must first pay the deductible before the plan pays any benefits. The HDHP offered through the Board of Pensions is a qualified high deductible health plan, which means it meets certain requirements set annually by the Internal Revenue Service. Because of this, if you enroll in the HDHP option, you may set up and contribute to a health savings account (HSA).

Medical out-of-pocket maximum: the most you will pay out of pocket for coinsurance in a given year. Remember, coinsurance is the percentage of the cost for covered services that you are responsible for paying after you pay the deductible. Deductibles, office visit copays, and prescription drug costs do not count toward the medical out-of-pocket maximum. A separate out-of-pocket maximum applies for prescription drug costs. This applies to the PPO only.

Network providers: physicians, hospitals, medical facilities, and other healthcare practitioners that have agreed to provide services at a discounted rate. Plan members can save on their out-of-pocket costs for care by using network providers. The medical options offered through the Board of Pensions use the Blue Cross Blue Shield (BlueCard PPO) national provider network.

Non-formulary drugs: drugs that generally are not included on a plan’s formulary (unless they are specifically excluded from coverage). You may also hear non-formulary drugs referred to as non-preferred drugs. The EPO and HDHP do not cover non-formulary drugs.

Out-of-network providers: physicians, hospitals, medical facilities, and other healthcare practitioners who do not participate in a health plan’s network. Out-of-network providers may charge you more than the BlueCard PPO participating provider rate (the plan allowance), and they may bill you for the difference between what they charge and the plan allowance. This is known as balance billing. The EPO and HDHP do not cover out-of-network care (except in emergencies).

Preferred provider organization (PPO): a type of health plan that offers members the freedom to seek care from any eligible licensed provider; however, the member’s out-of-pocket costs are typically lower when using network providers.

Total maximum out of pocket: the most you will pay in a year in the form of network deductibles, copays, and coinsurance. If your covered out-of-pocket expenses reach the total maximum out-of-pocket amount, the plan will pay 100 percent of allowable costs for the rest of the year. The total maximum out-of-pocket amount depends on the medical option you choose.