Most everyone knows what a deductible is in health insurance. 95% of health insurance plans contain some form of deductible in place. Everyone feels the “deductible pinch” when renewal season comes and the health deductible is raised! The employee/family deductible must be met before your insurance provider will start to pay for medical expenses. Important Note: Please remember that deductibles cover the area of in/outpatient surgery, x-ray’s, MRI’s, etc. For HDHP’s (High Deductible Health Plans) the deductible is the amount that must be met before the plan pays. This includes doctor visits, emergency room visits and Pharmacy costs. That being said it is important to know the difference in deductible arrangements. There are two types of deductibles: embedded and non-embedded.
There is a definitive difference between embedded and non-embedded deductibles. If you are covered under family coverage with an embedded deductible, your plan contains two components, an individual deductible and a family deductible. The two deductibles allow each person (covered member) of your family the opportunity to get their specific medical bills covered prior to the entire dollar amount of the family deductible being met. The individual deductible is embedded in the family deductible.
On the other hand, if your insurance policy contains a non-embedded family deductible, an individual deductible is not embedded in the family deductible. In this situation, before your insurance helps you pay for any of the family’s medical bills, the entire amount of the deductible must be met. It can be met by one family member or by a combination of family members. There are no benefits until expenses equaling the deductible amount have been incurred.
Something to Chew on
There are so many health insurance plans to choose from and each type can have either an embedded or a non-embedded deductible. Most times our sales teams deal with embedded vs. non-embedded deductibles are with HDHP plans. Companies need to be wary of the plans they are choosing for the employee base. This is especially true in the H.S.A market, when the embedded/non-embedded comes to the forefront. Employees can research whether their plan is embedded/non-embedded by calling the insurance company or utilizing their local broker.