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What is a deductible?

A deductible is the amount of money you must pay out-of-pocket (with your own money) in a plan year before your insurance coverage starts. Once you meet the deductible, your insurance plan will offer coverage in the form of cost sharing (copays or coinsurance). The deductible applies to all or most items and services covered by your plan.

 

Example: It’s January 1st, the beginning of your plan year. Your insurance plan has a deductible of $1000. You go to the doctor and pay the entire cost out-of-pocket. You visit the doctor a few more times throughout the year, and by July you’ve met the $1000 deductible. The next time you visit the doctor, your plan will start to cover some of the costs.

This article will teach you about:


In-network vs. out-of-network deductibles

Most plans: 

  • Have different deductibles for in-network and out-of-network services

  • Set a higher deductible for out-of-network services

 

Some plans:

  • Have separate in-network and out-of-network deductibles that you must meet separately

  • Have separate in-network and out-of-network deductibles that cross-apply. This means your in-network costs count towards both your in-network and out-of-network deductibles 


Individual vs. family deductibles

If you’re enrolled in employee-only coverage, you’ll have an individual deductible. 

 

If you’re enrolled in family coverage (employee + 1 or more dependents), there are three ways your deductible can work:

  • Option one: Each person on the plan must meet their own deductible for the year.


    Example: If the deductible is $500, each person must spend $500 out-of-pocket before coverage starts. This isn’t a combined total.

  • Option two: Each person must meet a combined family plan deductible.


    Example: Your family plan deductible is $3000. Each person must spend a combined total of $3000 out-of-pocket before coverage starts.

  • Option three: Each person can either meet their own deductible or the combined family plan deductible. This is called an embedded deductible.

     

    Example: Your plan has individual deductibles of $500, and a family plan deductible of $3000. You meet your own $500 deductible, but your dependents don’t meet their own deductibles yet. Your insurance plan will start to cover your costs, but not your dependents’ costs.

    If your dependents also meet their $500 deductible, the insurance plan will start to cover their costs.If you and your dependents meet the $3000 combined deductible, your insurance plan will start to cover everyone’s costs.

 

Tip: Check your Full Coverage Booklet to learn how your deductible works if you’re on a family plan.

Do I always need to meet my deductible before my plan offers coverage?

Your insurance plan may not have a deductible for some services or items. Your plan lists these services and items as “deductible does not apply”. This can happen when there’s a copay for services like office visits or prescription drugs.

 

Example: Your plan lists a "$15 copay, deductible does not apply" for generic prescription drugs. This means your plan always offers coverage on these drugs, but you'll always pay $15 towards the cost. The money you spend won't count towards your deductible.

 

Tip: Check your Full Coverage Booklet to see if any services or items aren’t subject to the deductible.

 

How do I know when I’ve met my deductible?

Most coverage from your insurance plan only starts after you meet your deductible. To check how much of your deductible you've paid so far, either:

  • Log in to your account on your insurance carrier’s website to view in-network and out-of-network deductible accumulators.

  • View your most recent Explanation of Benefits (EOB). 

  • Call your insurance carrier and speak to a representative.

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