Understanding Your Health Plan Coverage

If you find health insurance confusing, rest assured, you are not alone. From uncommon terms to complex grids of benefits to cost share percentages, many people have trouble fully understanding their health plan coverage. In fact, one study shows that over half of the adults surveyed felt at least one part of their health insurance was difficult to understand. Let’s demystify your health plan by walking through where to find your benefits information and how to decode it.

Summary of Benefits and Coverage

Your best source of information is your health plan’s Summary of Benefits and Coverage (SBC). It’s an easy-to-understand overview of benefits and coverage provided by a health plan. Health insurance companies are required to provide this document for all plan types so that prospective and current members know their benefits and are also able to compare plans more easily. With that said, there’s still a lot of to unpack in this document. Below you’ll find an explanation of each section.

Plan Information

The SBC starts with general information about a plan. This includes the type of plan it is, dates the coverage is active, and who is covered. In addition, the introduction directs you to where you can find term definitions that will be used in the document.

Important Questions

Following the general plan introduction is a section called Important Questions. It clarifies your share of costs for care like your deductible and out-of-pocket maximums. Additionally, this section explains the plan’s use of in-network and out-of-network providers and your access to each.

Common Medical Events

Next is a grid of common medical scenarios, what you’ll pay for each, and any rules or limitations associated. You can use this section to really get into the nuts and bolts of a plan and determine if its coverage is right for your current health needs and budget.

Exclusions

Some medical services are not covered by your plan such as cosmetic surgery, long-term care, coverage when you travel, and routine eye care. The SBC will outline what those are and what that means for you. Sometimes what’s not covered is just as important for you as what is so make sure to review this section, too.

Coverage Examples

People learn differently. To ensure that everyone fully understands a plan, the SBC includes examples of coverage for specific medical conditions or events. One coverage and cost share example may be living with type 2 diabetes and another may be having a baby.

Prescription Drug Coverage

If a plan includes prescription drug coverage, the SBC will direct you to a formulary or list of covered drugs and cost-sharing to review. Take the time to review that document even if you don’t have any prescriptions as that could change.

Rights to Continued Coverage

This section lets you know that you have a right to continued coverage unless you move out of the coverage area, don’t pay your premiums, or fraud the insurer. A carrier cannot take away your coverage because of any health issues.

Your Rights to Continue Coverage: There are agencies that can help if you want to continue your coverage after it ends. The contact information for those agencies is: [insert State, HHS, DOL, and/or other applicable agency contact information]. Other coverage options may be available to you, too, including buying individual insurance coverage through the Health Insurance Marketplace. For more information about the Marketplace, visit www.HealthCare.gov or call 1-800-318- 2596.

Where and When to Review Your SBC

Now that you know the basics of a SBC, you can review it when you want to confirm your current coverage or compare coverage options. You can access your current plan’s SBC on MyVEBA. With Open Enrollment starting, you should be provided a new one soon. Under the Affordable Care Act, the SBC must be distributed with enrollment forms. If there is an auto-renew of a plan, employers must provide the SBC within 30 days of the plan beginning. Sometimes plans change coverage during the year. You’ll receive a new SBC with those changes at least 60 days in advance. So make sure to review any important plan inform

Working Together for Your Healthiest Life

If you find this blog helpful in understanding health insurance and the open enrollment period, be sure to check out the other blogs in this series for more in-depth information here.

Get Support: The VEBA Advocacy Team can help you review your health plan and discuss it with you in depth. Call 888-276-0250 or visit calveba.org/contact for assistance. For urgent requests, use the “Urgent” box on the contact form.

MyVEBA Portal: Easily view your current health plan information through the MyVEBA online portal.

Benefit Contacts: For assistance with specific carrier benefits or issues, such as claims or coverage details, visit calveba.org/benefit-cont a cts to contact them directly.

Keeping Your Health and Budget Covered

Did you know?

Supporting your health while meeting your budget needs is uniquely challenging in today’s world. With the costs of healthcare projected to rise to a 13 year high, what you’ll pay for care is an essential factor in evaluating a health plan.

Whether it’s your current plan or plans you’re considering, taking the time to understand the total costs of your care can keep both your health and budget covered.

Itemizing Health Plan Costs

When you think of costs associated with a health plan, you likely think of what comes out of each paycheck for the monthly premium. Monthly premiums are an important consideration, however, there are other costs to note. These costs include:

Monthly Premiums

The monthly payment made for an insurance policy.

Deductible

What you pay each year before your health plan shares costs. Review your Summary of Benefits and Coverage (SBC) to see what payments are counted towards your deductible.

Coinsurance

The percentage of costs for care you are responsible to pay and is billed to you after the service is performed by the provider or facility.

Copayment or Copay

The fixed amount you pay for medical services, such as office visits or prescription medicines. It is usually paid at the time of your appointment.

Out-of-Pocket Costs

What you pay for healthcare expenses, including things like deductibles, coinsurance, or copays.

Out-of-Pocket Maximum

The most you will pay for healthcare expenses in a year.

Prescription drug costs

Costs for prescribed drugs depend on what tier the drug is in, whether it’s brand or generic, what pharmacy you go to, and more.

Consider Cost Balance

The costs of a health plan need to be considered in relation to each other. Some plan, like High Deductible Health Plans (HDHP), offer a lower monthly premium, meaning you’ll pay less per paycheck. However, you may pay more for care overall if you have significant health needs. Conversely, a plan with higher premiums will usually have lower deductibles, lowering the total amount you’d pay for care over time.

They typically work best for those who use health coverage often and those living with chronic conditions. As you consider the different costs of a health plan, balance the costs with your current health needs to, ultimately, protect your budget.

Where to Find Cost Information

Your best source of information is your health plan’s Summary of Benefits and Coverage SBC. It’s an easy-to-understand overview of benefits and coverage provided by a health plan. The SBC gives you a snapshot of what costs you can expect to pay throughout the year for care under your health plan. You can use this document to compare the total costs of care you can expect with each plan you’re considering – if you decide your current plan isn’t right for you or simply want to see your options.

Questions? We Can Help.

As you review your plan and maybe other plan options during Open Enrollment, we’re here to help make the process as easy and simple as we can. Reach out to The California Schools VEBA Advocacy Team at 888-276-0250 (Monday-Friday from 8 am – 5 pm).

What is Open Enrollment?

In the United States, most people sign up for health care plans during the annual Open Enrollment. Navigating health care plans can be confusing, so it’s important to be well-informed about your options – whether or not you intend to switch your plan.

Open Enrollment is a critical window that can affect you, and your family’s health care options for years to come. Looking at health care plans can bring up questions, especially before Open Enrollment. Going in prepared helps to ensure that you make the best choice for you and your family.

Here’s a comprehensive list of questions and answers to help you easily navigate Open Enrollment.

What exactly is Open Enrollment?

Open Enrollment is when individuals and families in the U.S. can sign up for insurance plans each year. During this period, you can look at and purchase a plan typically through the Health Insurance Marketplace or your employer.

When is the Open Enrollment period?

The Open Enrollment period can vary slightly depending on your employer. Your employer’s Open Enrollment dates are unique. Please contact your Benefits Administrator for more information on your enrollment period to ensure you sign up for coverage within your window.

Pro Tip: Mark these dates on your calendar so you don’t miss this critical window.

What changes can I make during Open Enrollment?

Open Enrollment is the time to evaluate your current and future health care needs and make any necessary changes. During this period, you can choose a new insurance company and plan to find one that best suits your changing health care needs.

You can also renew your health insurance, as well as add or remove dependents or spouses, and adjust your adult vision and dental coverage.

Do I always need to review my options?

It can be tempting to just stick with the plan you already have. It’s important to review your options each year, even if your budget or health care needs haven’t changed.

This is because many factors can affect the price and service offered by your insurance provider that are out of your control. Other factors that may impact your health care plan include states changing the prices of certain premiums or having new insurers enter the marketplace.

Reviewing your options is an important part of being proactive about your health and well-being.

Who needs to enroll during Open Enrollment?

Every person who is not a dependent should take part in Open Enrollment. That includes whether or not you want to make changes to your existing plan. Open Enrollment applies to you whether you’re purchasing insurance through the marketplace, Medicare, or your employer.

What terms do I need to know before Open Enrollment?

There are a lot of confusing terms in the world of health care. Here are some of the top ones you should know before Open Enrollment:

Deductible: How much you must spend for covered health services before your insurance company pays anything (except free preventive services).
Copay: A fixed amount of money that an individual is required to pay out-of-pocket for a specific health care service or medication, typically at the time of service.
Coinsurance: A cost-sharing arrangement in health care where the insured individual is responsible for paying a percentage of the covered medical expenses, typically after meeting their deductible.
Premium: Premium refers to the amount of money an individual or entity pays to an insurance company in exchange for insurance coverage. This is usually paid monthly or annually.
Out-of-pocket maximum: The maximum amount an individual is required to pay for covered health care services during a specific period, usually a calendar year.

What happens if I miss the Open Enrollment period?

If you miss the Open Enrollment, your plan typically automatically renews for the next year. If your current plan is no longer available, you may be enrolled in a similar plan instead. If you don’t currently have a health care plan, you may miss your opportunity to enroll unless you meet certain requirements.

The restrictions around Open Enrollment can vary depending on the state, income level, and whether you are eligible for Medicare. Native Americans can enroll in a health plan at any time, without needing a qualifying event.

How do I compare the costs of different plans?

One of the most important factors to consider when choosing a plan is the cost compared to the benefits received. People often just look at the monthly premium, however, there’s much more that goes into the cost of your insurance.

Besides the premium, some other costs to consider are your deductible, copayments and coinsurance, out-of-pocket maximum, and your estimated health care needs for the year.

Will I receive new ID cards this year?

As technology evolves so will your health insurance! No, you will not be receiving your new insurance ID cards in the mail like you typically do. In 2025, all carrier ID cards will be digital.

You receive more information about your new digital ID cards during Open Enrollment. If you’d prefer a physical ID card, you can still request one from your plan carrier.

How should I prepare for Open Enrollment?

It’s almost Open Enrollment, and being prepared will make this process that much easier. Here a few more things to keep in mind as you prepare for Open Enrollment:

Know how much health care you may need next year, including wiggle room for emergencies or the unexpected.
See if your preferred providers and hospitals are within the network of the plans you’re looking at.
Are you or your family expecting any changing medical needs in the next year such as pregnancy or surgery?

Once you have a good idea of your budget and health care needs, ask your employee benefits contact for more information on where and when to enroll. With all this information at your fingertips, you’ll be able to easily pick out the best plan for you and your family.

If you find this blog helpful in understanding health insurance and the open enrollment period, be sure to check out the other blogs in this series for more in-depth information here.

VEBA Resources

MyVEBA Portal: Easily view your current health plan information through the MyVEBA.

Benefit Contacts: For assistance with specific carrier benefits or issues, such as claims or coverage details, visit calveba.org/benefit-contacts to contact them directly.

Simplifying Health Insurance: Exploring Options

Health insurance can be a complex and confusing topic, but understanding the different options available to you is crucial for making informed decisions about your health care. In this blog post, we will explore some common terms and concepts related to health insurance.

Insurance Plans

High Deductible Health Plan (HDHP)

An HDHP is a type of health insurance plan that has higher deductibles (the amount you have to pay before insurance kicks in) and lower monthly payments compared to other plans.

HDHPs are typically paired with a Health Savings Account (HSA), which allows individuals to save pre-tax money to pay for qualified medical expenses.
This can be a great option for those who are generally healthy and don’t anticipate needing frequent medical care.

EXAMPLE: Sarah is generally healthy and only visits the doctor for annual check-ups. She opts for an HDHP with a higher deductible but lower monthly premium. Sarah also opens an HSA, contributing $100 each month. Over the year, she accumulates $1,200 in her HSA, which she uses to cover her annual check-up costs and any unexpected medical expenses. This setup helps her save on monthly premiums while preparing for potential health care costs.

Health Reimbursement Arrangement (HRA)

An HRA is an employer-funded benefit plan that reimburses you for qualified medical expenses.

Your employer contributes money to the HRA, and you can use those funds to pay for eligible health care expenses.
HRAs are typically used in conjunction with employer-sponsored health insurance plans and can help offset out-of-pocket costs for employees.

EXAMPLE: John works for a company that offers an HRA. His employer contributes $500 to his HRA annually. John uses this money to pay for his prescription medications and some co-pays for specialist visits. This benefit reduces his out-of-pocket costs for health care, making his overall health care expenses more manageable.

Health Savings Account (HSA)

An HSA is a tax-advantaged savings account that you can use to save money for medical expenses.

HSAs are typically paired with high-deductible health insurance plans.
The money you put into your HSA is tax-deductible, which means you don’t have to pay taxes on it.
You can use the money in your HSA to pay for things like doctor visits or prescriptions. And if you don’t use all the money in your HSA, it rolls over to the next year, so you can save it for future medical expenses.

EXAMPLE: Maria chooses a high-deductible health plan with an HSA. She contributes $200 each month to her HSA, totaling $2,400 annually. Over the year, she doesn’t need much medical care, so she rolls over her savings to the next year. In the following year, she uses her HSA funds to cover the cost of a new treatment not covered by her insurance, demonstrating how HSAs can help build a financial cushion for future health care needs.

Accessing Care

Primary Care Physician (PCP)

Your PCP is the doctor you go to for regular check-ups and general health care needs.

The PCP is typically a family doctor, internist, or pediatrician, depending on the age and specific needs of the patient.
Your PCP is responsible for taking care of your overall health, managing any ongoing health problems you might have, and referring you to specialists when necessary.

EXAMPLE: Alex visits his PCP, Dr. Smith, for regular check-ups and general health concerns. When Alex starts experiencing persistent knee pain, Dr. Smith refers him to an orthopedic specialist who provides targeted treatment, while Dr. Smith continues to oversee Alex’s overall health and recovery.

Specialist

A specialist is a health care provider who has advanced training and expertise in a specific area of medicine.

Examples of specialists include cardiologists, dermatologists, neurologists, orthopedic surgeons, and psychiatrists.
Patients are typically referred to a specialist by their primary care physician when specialized knowledge or treatment is required for a particular health concern.

EXAMPLE: Emma has been diagnosed with diabetes. Her PCP refers her to an endocrinologist, Dr. Lee who specializes in diabetes management. With Dr. Lee’s expertise, Emma receives personalized treatment plans and advice on managing her condition effectively.

Health Care Systems

Health Maintenance Organization (HMO)

An HMO is a type of plan where you must choose a primary care doctor and get a referral from them to see a specialist. This can be a cost-effective option for those who prefer a more coordinated approach to their health care.

EXAMPLE: David enrolls in an HMO plan and selects a primary care physician. When he needs to see a cardiologist for a heart condition, he first visits his PCP, who provides a referral to the cardiologist within the HMO network. This coordinated care model helps David manage his heart condition with a streamlined approach and potentially lower costs.

Preferred Provider Organization (PPO)

A PPO is a type of plan that gives you more flexibility in choosing your doctors. You can see doctors both inside and outside of the plan’s network, and you don’t need a referral to see a specialist. If you choose an in-network provider, your insurance will typically cover more of the cost, keeping your out-of-pocket costs low. Choosing out-of-network providers may have higher out-of-pocket expenses for you. A PPO is a good option if you want more freedom to choose your health care providers.

EXAMPLE: Lisa has a PPO plan, which allows her to see any doctor she chooses without needing a referral. She wants to see a dermatologist and begins researching providers both inside and outside of her plan’s network. She finds one outside of her network with great reviews that she wants to see. Although she may pay a higher percentage of the cost for out-of-network care, the flexibility of the PPO plan lets her choose the best specialist for her needs.

Simplifying Health Insurance: Understanding Documents

Health care documents contain a vast amount of information, from medical records to billing statements, and can often be overwhelming or confusing to understand. That’s why we’re breaking down these common health care documents to help you understand what they mean.

EOC: Explanation of Coverage

An EOC is a document provided by an insurance company that outlines the details of your health insurance plan. Inside the EOC, you’ll find lots of helpful information such as:

What your insurance covers and doesn’t cover.

The EOC will tell you what your insurance will cover, like doctor visits, hospital stays, or medicine. It will also tell you if there are any things your insurance won’t cover, called exclusions. For example, maybe your insurance won’t pay for cosmetic procedures.

How to use your insurance.

It will explain how to make appointments with doctors, how to get medicine from the pharmacy, and how to file a claim if you need to get money back from your insurance. It might also have some extra rules and conditions that you need to know about.

How much you might have to pay when you use your insurance.

The EOC includes information on cost-sharing requirements such as deductibles, copays, and coinsurance. Read this blog for definitions of these terms.

EXAMPLE: The EOC details your plan’s deductible of $1,000, a copay of $20 for office visits, and 20% coinsurance for hospital services. Knowing these costs helps you budget for health care expenses and understand your financial responsibilities.

Your rights and responsibilities under their health insurance coverage.

It helps you know what you’re entitled to, like being able to choose your own doctor, and what you need to do to keep your coverage in good standing, providing accurate information to your insurance company.

EOB: Explanation of Benefits

An EOB is a document provided by an insurance company to you or your health care provider that explains how a claim for health care services was processed and paid.

The EOB typically includes details such as:

The date of service
The health care provider’s charges
The amount covered by insurance
Any deductible or copayment amounts
The portion of the claim that you may be responsible for paying

The EOB is like a receipt. It’s important to read your EOB carefully to make sure everything looks right and to understand what you might owe. That way, you can keep track of your health care expenses and make sure everything is handled correctly.

EXAMPLE: After a visit to a specialist, your EOB shows that the specialist billed $300, your insurance covered $240, and you owe a $60 balance. This total includes any copayments or coinsurance you need to cover.

SBC: Summary of Benefits and Coverage

The SBC is like a cheat sheet that gives you a quick overview of a health insurance plan so you can understand your options, compare plans, and select the plan that best fits your needs and budget.

The SBC includes information about deductibles, copays, coinsurance, out-of-pocket maximums, and coverage for common medical services. It also highlights any limitations or exclusions that may apply.

Formulary

A formulary is a list of prescription drugs that are covered by a specific health insurance plan.

The formulary categorizes medications into different tiers, which determine the level of coverage and cost-sharing for each drug.

Formularies are designed to promote cost-effective and evidence-based medication choices, and they may include both generic and brand-name drugs.

How do you use a formulary? You can consult your plan’s formulary to determine which medications are covered by your insurance and at what cost.

EXAMPLE: The formulary lists generic medications in Tier 1, which have the lowest cost-sharing, while brand-name drugs are in Tier 2 or 3 with higher costs. If you need a specific medication, you can use the formulary to determine its tier and expected costs, helping you make informed decisions about your prescriptions.

Simplifying Health Insurance: Common Terms

Navigating the world of health care can be complex, especially when faced with unfamiliar terms. If you find yourself wondering where to start or how these terms apply to you, begin by gaining a clear understanding of health insurance terminology. This will help you make informed decisions about your health care and ensure you are well-prepared for any medical expenses that may arise.

Claim

A request for payment submitted by a health care provider to an insurance company or third-party payer for services given to a patient.

It includes information like the patient’s diagnosis, treatment provided, and the cost of the services.
The insurance company reviews the claim and determines the amount they will reimburse the provider for the services.

EXAMPLE: After receiving treatment for a broken arm, the health care provider submits a claim to the insurance company. The claim includes details such as the diagnosis, the treatment provided (such as X-rays and a cast), and the cost of the services. The insurance company reviews the claim and determines the amount they will reimburse the provider for the services.

Deductible

The amount of money an individual or family must pay out of pocket for health care services before their insurance coverage begins.

EXAMPLE: If you have a health insurance plan with a $500 deductible, you will need to pay the first $500 of your health care expenses out of pocket before your insurance coverage begins. Once you meet the deductible, your insurance will start covering a portion or all of the eligible expenses, depending on your plan.

Coinsurance

A cost-sharing arrangement in health care where the insured individual is responsible for paying a percentage of the covered medical expenses, typically after meeting their deductible.

The remaining percentage is paid by the insurance company. It is a way to distribute the financial burden between the individual and the insurer.

EXAMPLE: Let’s say you have a health insurance plan with a 20% coinsurance rate. After meeting your deductible, if you receive a covered medical service that costs $100, you would be responsible for paying $20 (20% of the cost), while the insurance company would cover the remaining $80.

Copay

A copay (also called a copayment) is a fixed amount of money that an individual is required to pay out-of-pocket for a specific health care service or medication, typically at the time of service.

It is a form of cost-sharing between the individual and their insurance provider.

EXAMPLE: When you visit your primary care physician for a routine check-up, you may be required to pay a copay of $25 at the time of the appointment. This fixed amount is a form of cost-sharing between you and your insurance provider. Read more about Cost Share in the next section.

Cost-sharing refers to the division of health care expenses between the individual and their insurance provider.

It includes various out-of-pocket costs not covered by your health plan – such as deductibles, copayments, and coinsurance.
Cost-sharing helps distribute the financial responsibility for health care services and medications between the individual and the insurer.

EXAMPLE: Suppose you have a health plan with a $1,000 deductible, a 20% coinsurance rate, and a $30 copay for doctor visits. If you undergo a medical procedure that costs $2,000, you will first pay the $1,000 deductible out of pocket. After that, you would be responsible for 20% of the remaining $1,000 (coinsurance), which amounts to $200. Additionally, if you have a follow-up visit with a copay, you will pay the predetermined $30. These various out-of-pocket costs make up the cost-sharing between you and your insurance provider.

Medical Out‐of‐Pocket Maximum

The maximum amount an individual or family must pay for covered medical expenses each year, after which the insurance company covers 100% of the costs.

EXAMPLE: Let’s say you have a health insurance plan with a Medical Out-of-Pocket Maximum of $5,000. Throughout the year, you will be responsible for paying your deductible, copays, and coinsurance for covered medical services. As you pay these expenses, they will add up towards your out-of-pocket maximum. Once your total out-of-pocket expenses hit $5,000, your health insurance plan will take over and cover all eligible medical expenses. This means you will no longer have to pay any deductibles, copays, or coinsurance for the remainder of the coverage period.

RX Out‐of‐Pocket Maximum

The maximum amount an individual or family must pay for prescription drugs each year, after which the insurance company covers 100% of the costs.

EXAMPLE: Let’s say your health insurance plan has an RX out-of-pocket maximum of $1,500. Throughout the year, you pay for prescription drugs. Once your out-of-pocket expenses reach $1,500, the insurance company covers 100% of the costs for the rest of the year.

Premium

A premium is the amount of money an individual or entity pays to an insurance company for insurance coverage.

It is typically paid in regular installments – usually monthly or annually. It’s common for individuals to receive health insurance through their employer. In this case, the premium amount is typically deducted from their paycheck before they receive their net pay. This is known as a payroll deduction.
The premium amount is determined by various factors, including the type of insurance coverage, the level of coverage, the individual’s age and health status, and other risk factors.
Paying the premium ensures that the insurance policy remains active and provides the agreed-upon benefits and coverage.

EXAMPLE: You have health insurance coverage through your employer and the monthly premium for your plan is $200. Your employer offers a payroll deduction option. Therefore, your employer would deduct $200 from your gross salary each paycheck before you receive your net pay.

Health Network

A health network is a broad organization consisting of multiple facilities, such as hospitals, clinics, and specialty centers. These facilities are often located in different geographic areas and may be owned by different entities. A health network provides coordinated and integrated care to patients across various settings. Health networks often have a central administration that oversees the operations of all the facilities within the network.

Medical Group

A team of health care providers who collaborate to deliver comprehensive care, sharing resources and facilities for integrated services. These physicians may specialize in different areas, such as primary care, pediatrics, or cardiology. Medical groups can be independent or affiliated with a hospital or health network.