Insurance Basics

Many people get confused with all of the words used to describe your benefits. It is important to understand the basics of insurance and how it works.

Summary of how insurance works:

You pay a monthly premium to pay for your medical benefits. Your insurance carrier may have a copay for certain providers at each visit. It is important to understand that the plan you have selected will not pay out until you have first paid all of your annual deductible. Once your deductible is paid, then you will have to pay your coinsurance until you reach your out of pocket maximum. After your out of pocket maximum is paid, then your insurance should pick up 100% of the allowable expenses. Unfortunately, not all costs are covered by insurance. You can research what your insurance covers on their Summary of Benefits & Coverage, or, in more detail on the Certificate of Coverage.

The most common terms or phrases are defined below for you.

Reach out to Cheryl Matava, the benefit administrator for Tahoma, if you need more help understanding your insurance. 425-413-3422/cmatava@tahomasd.us


Definitions:

Allowable expense

  • What the insurance will cover as an expense when billed by the doctor’s office. Some procedures, like cosmetic procedures, are not an allowable expense and the insurance will not pay. The Certificate of Coverage of your insurance will alert you to what is and is not covered.

 Carrier

  • This is a generic name for the insurance you have for medical, dental or vision.

 Certificate of Coverage

Coinsurance

  • The percentage that you pay after you pay all of your deductible. If your deductible is paid and your doctor’s office submits the bill to insurance, then insurance will pay a percentage of the bill. The leftover amount that the doctor’s office bills to you is your Coinsurance amount. Usually your portion of each bill is 15-25%.

 Copay

  • Your responsibility to pay at time of service for certain doctor’s office, urgent care or ER visits. Some insurance will have a copay and some don’t. Some insurances still make you pay your copay after paying your out of pocket maximum-see the Certificate of Coverage for your plan to find out if this is your plan.

 Coordination of Benefits

  • When you are covered by more than one insurance, how the insurance coordinates payments of your benefits. For example, if you have SEBB medical insurance and you are also covered on your spouse’s private medical insurance, then this would be when a coordination of benefits would occur. Your plan is usually primary and your spouse’s plan secondary. Each plan’s Certificate of Coverage will discuss how they pay with coordination of benefits-be sure to read them.

Deductible

  • This is the money you have to pay before your insurance benefits will begin to pay. You will present your medical ID card to your doctor’s office. The doctor’s office will bill your insurance. Your insurance will note on your account the amount being charged and subtract that amount from your deductible. Then your doctor’s office will bill you the amount that is owed. Once your deductible is paid, your insurance will begin paying a percentage of your bills (usually at 75-85%). *There also could be a separate deductible for your prescription coverage.

 Dual Enrollment

  • Dual enrollment is when a school employee is eligible to enroll in the SEBB Program and is also eligible as the spouse, state-registered domestic partner, or dependent of another eligible school employee. Dual enrollment is not allowed for medical, dental, or vision coverage. The single-enrollment policy helps maintain the affordability of the SEBB Program’s health plans.

 Fully Insured vs Self-Insured medical plans

  • A fully insured plan is offered by commercial carriers (Kaiser, Premera), which choose what they cover and plan costs.
  • A self-insured plan (UMP) is offered by the employer, which is Washington State for the purpose of our SEBB insurance. Washington State develops the benefit design and has more control over plan costs.

 In-Network vs Out of Network

  • An in-network doctor/clinic/hospital has contracted services with your insurance carrier and out of network doctor/clinic/hospital have not contracted services with your insurance carrier. Your benefits pay out less when you see out of network providers so be sure to research if your doctor is in network.

 Insurance plan year vs School year

  • The insurance plan year for the SEBB Program is a calendar year, January 1 - December 31.
  • The school year is September 1 - August 31. Your benefit eligibility and coverage period are based on the school year.

 Out of Pocket Maximum

  • The amount of money you pay into your insurance plan for the insurance to pick up 100% of the billing the remainder of the year. Some insurances have exclusions to this so please read your Certificate of Coverage for your plan.

 Premium

  • The monthly amount you pay to be signed up in health insurance. In SEBB, there is a premium if you sign up for medical insurance, but there is no premium for your dental or vision benefits. The school district pays those premiums on your behalf.

 Provider

  • Your doctor’s office is your provider of healthcare for you. 

 Summary of Benefits & Coverage

  • An at-a-glance look at what your benefits will cover. These can be found on the virtual benefits fair under each individual insurance’s “booth” icons.

https://www.hca.wa.gov/employee-retiree-benefits/virtual-benefits-fair-sebb

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