Broker Check

Misconceptions About Group Medical Insurance

| August 11, 2023


       It seems like employees and employers have become hesitant to use the medical insurance they pay for each month. Not just because of the cost, but because they don’t understand how their plan actually works. How many times have you heard a fellow employee, either at an old job or your current say “these health benefits suck, every time I go to the doctor, I’m the only one paying?” 

       Choosing the best health plans for your company doesn’t come down to choosing the “best plan out there”; it’s about choosing the plan that fits you and your employees the best. You also need to understand how your plan works. 

       Many participants I speak with don’t know that preventative care is covered at 100%. This includes annual check-ups or physicals. The Affordable Care Act implemented three different categories of preventative services: adults, children, and women. To learn more about what preventative services are and what’s covered you can visit  

       Although it may seem simple, a lot of the employers and employees that I speak with don’t know the difference between a deductible and their max out of pocket. It’s pretty easy to remember once you take a moment to think about it. Your deductible is the amount of money that you must pay for medical services prior to the insurance company paying their portion. Unless the plan just says copay, which I’ll discuss in the next paragraph. Your maximum out of pocket is the maximum amount of money you will spend on your medical expenses for the year, excluding your monthly premium.  

      Another common misconception about group medical insurance is the difference between coinsurance and copayment. Copayment is the stated amount that you are typically able to use before you reach your deductible. This is true if the word copay isn’t followed by “after deductible”. Any time that you see “after deductible”, you must reach your deductible first.  

     Coinsurance is usually followed with “after deductible”. Coinsurance is a stated percentage that you are responsible for. When you review quotes, they usually show the percentage that the insurance company is responsible for, after you reach your deductible. For example, if you see 80%, that means that the insurance company will pay 80% after you reach your deductible, and consequently you're responsible for the other 20%. 

     Group health insurance can be very confusing. Make sure you know the facts before you start your plan. These are just a couple of examples. You want to make sure that you know how your insurance works before you need it, otherwise it could be very costly.