A Summary of Benefits and Coverage (SBC) is the document issued by your insurance carrier that describes what an insurance plan covers and the cost of various services. The first page of a medical SBC includes the name of the insurance carrier, the plan name, and the coverage period. The rest of the document lists categories of covered services and their associated costs. Toward the end of the document, your carrier also includes a few different medical scenarios and their potential costs—like a pregnancy, a simple fracture, and diabetes management.
If you have questions about specific services or exclusions, call your insurance carrier at the phone number on the back of your member ID card. If you’re enrolled in benefits through Gusto, you can also find your carrier’s contact info in the Benefits section of your account.
If you're enrolled in Gusto-brokered health insurance (including the broker integration), follow these steps to find your SBC and other benefit details in Gusto:
Here are the most important terms you'll find in a medical SBC and what they mean.
Here's what each plan type and tier means. You can find your plan type at the top of your Summary of Benefits or in the plan name as listed in Gusto.
Knowing your plan type can help you understand how flexible your provider network is and whether your plan includes any out-of-network coverage.
Preferred provider organization (PPO)
A preferred provider organization (PPO) plan generally lets you visit any in-network physician or healthcare provider without needing a referral from a primary care physician first. PPOs also offer some out-of-network coverage—but only after a separate, higher out-of-network deductible has been met. You’ll pay the least when you visit in-network providers. Since PPOs offer the most network flexibility, they generally cost more than the other plan types.
Health maintenance organization (HMO)
A health maintenance organization (HMO) is generally a lower-cost plan in exchange for a smaller network of providers. Most require you to get a referral from your primary care physician before you can see a specialist. HMOs generally don’t include any out-of-state or out-of-network services, except in case of emergency.
Exclusive provider organization (EPO)
An exclusive provider organization (EPO) is a type of health plan that allows you to seek treatment in-network without needing a referral from primary care physician to see a specialist. EPOs do not provide coverage for treatment received by providers out-of-network, except in case of emergency.
Point of service (POS)
A point of service (POS) plan is often a hybrid between a PPO and an HMO. Many require you to see a primary care physician to see a specialist. A POS plan may provide minimal coverage for treatment out-of-network, but in-network providers will generally cost you less.
Note: POS plan features vary by carrier. For example, many of UnitedHealthcare’s POS plans function more like PPOs, because most include out-of-network coverage and don’t require a referral to see a specialist.
A health insurance plan’s metal tier can tell you how much your insurance carrier will generally pay toward your in-network healthcare costs. Plans that cover more of your healthcare costs have higher premiums, and plans that cover less will cost less.
The Affordable Care Act requires each metal tier to cover a certain percentage of your health care costs.
*Silver plans are a little different. You may be eligible for a cost-sharing reduction subsidy. Depending on your income, this subsidy means you could qualify for a silver plan that covers about 73, 87, or 94 percent of your healthcare costs.
A High Deductible Health Plan (HDHP) is an insurance plan that generally has lower premiums and a higher deductible. Enrolling in an HDHP means that in addition to the coverage provided by the plan, you're eligible to set aside pre-tax funds in a Health Savings Account (HSA). An HSA is an account you can fund with pre-tax payroll deductions and spend on qualifying medical expenses.
If your plan has "HDHP" or "HSA" in its name as listed in your SBC or in Gusto, this means it's a High Deductible Health Plan. If your employer offers a Health Savings Account, you can enroll in it after selecting an HDHP in Gusto.
Check your Summary of Benefits for your plan’s exact benefits, but keep in mind that many HDHPs only pay for preventive care until you meet the deductible. Until then, you’ll pay 100% out of pocket for things like specialist visits and prescriptions. The advantages are that you'll usually pay less in premiums, and you can use your pre-tax HSA funds on those qualifying out-of-pocket expenses.
Each plan has its own provider network, which is where you'll pay the least for covered services.
Once you know whether your plan is a PPO, POS, EPO, or HMO, you’ll also need to know the name of your provider network. A medical network refers to the hospitals, doctors, pharmacies, and specialists that are paid a contracted amount for their services. Seeing in-network providers will cost you the least.
To find your network, look at the name of your plan as listed in your SBC or in Gusto (ex: Anthem BlueCard PPO, UnitedHealthcare Select Plus network, Humana HMO Select, Kaiser HMO).
Find a provider
Before you go to the doctor or a health facility, check your carrier’s provider search tool to find in-network doctors and facilities. You can search for “[carrier name] provider search” in your web browser, check your member portal, or call your carrier directly.
Within your plan's network, the rates of hospitals, doctors, pharmacies, and specialists are predetermined and negotiated by your carrier. As a result, you end up paying less when you receive in-network treatment.
If your plan includes any out-of-network care, you'll have a separate and higher out-of-network deductible and out-of-pocket maximum. You'll have to pay for 100% of out-of-network care until you meet that higher deductible (unless it's emergency care).
Even if your plan doesn't generally cover out-of-state or out-of-network care, your insurance carrier can't charge you more for getting emergency room services at an out-of-network hospital. You'll pay the same as if you received the emergency treatment in-network.
Emergency care is generally considered to be service for an emergency medical condition that requires urgent treatment to keep the condition from getting worse. If the situation needs attention right now to prevent death or severe consequences, then it is considered an emergency.
Once you determine your plan type and network, use your SBC to see what different healthcare services will cost you.
Preventive care is routine health care that maintains health and well-being and helps prevent disease, disability, and death. Under the Affordable Care Act, all health plans are required to cover a set of preventive services at no cost to you. This means you will not have to pay a co-payment or coinsurance or even meet your deductible to receive certain preventive services.
Common examples include:
A deductible is the amount of money you have to pay out-of-pocket for covered healthcare services until your insurance company starts to pay.
After you meet the deductible, then your carrier starts paying for a portion of your in-network care. You cover your share of the cost through copays, coinsurance, or a combination of the two.
Some plans have an exception to the deductible for certain services. On page 1 of your SBC, look for a row that says "Are there services covered before you meet your deductible?" If any services are listed, this means that instead of having to pay 100% of that service until the deductible is met, you'll only have to pay the coinsurance or copay listed for that service.
Pay attention to when the deductible resets. It either resets on the calendar year (January 1st) or the plan year (the plan's renewal date), depending on what was set up when your company applied for group coverage. When the deductible resets, you'll need to meet the deductible again before the insurance carrier starts covering services.
The out-of-pocket maximum is the most you'll pay for covered services during a plan year. Once you’ve met your max, you will no longer have to pay copays, coinsurance, or any other costs associated with services covered by your insurance plan for the rest of the year.
Your out-of-pocket maximum resets at the same time your deductible does, either on the calendar year or your plan year.
The out-of-pocket max does not apply to treatment that your health insurance doesn't cover. For example, if you have an HMO plan and you see a doctor who is out-of-network, your insurance will not contribute because HMO plans do not cover out-of-network services. Therefore, any expenses you incur for out-of-network treatments will not be included in the calculation of your out-of-pocket max.
Starting on page 2 of your SBC, look at the columns for “Services You May Need” and “What You Will Pay” to find your copays or coinsurance for different services.
Remember, you may need to meet your deductible before copays and coinsurance apply. At the top of page 2, look for this phrase: “All copayment and coinsurance costs shown in this chart are after your deductible has been met, if a deductible applies.” This means that unless otherwise specified, you’ll have to pay 100% out of pocket at first. Once you meet the deductible, your insurance carrier will start covering a portion of in-network costs and you’ll pay the listed copay or coinsurance.
A copay is a fixed dollar amount that you’ll pay for a certain service. For example, if the “Specialist visits” section of your SBC lists a $75 copay, this means that if you go to a dermatologist, your cost after the deductible is $75. Before you meet the deductible, you'll pay 100% of whatever your dermatologist charges for the visit.
When you see a percentage in the “What You Will Pay” column, this is coinsurance. Coinsurance is a percentage of each service’s total cost that you’ll pay. If your coinsurance is 40% for an office visit, then you pay 40% of whatever the doctor charges and your carrier pays the other 60%.
Pre-authorization is the approval from your health insurance carrier that the medical treatment or medication that you are seeking will be covered by your plan before you receive it.
Note: Some carriers will require pre-authorization for certain services. Make sure to work with your doctor or pharmacy to obtain this authorization before you receive treatment so that you get the most out of your health insurance.
Each insurance carrier has a formulary of prescription drugs that describes how each drug is covered. The tier dictates how much the member will pay for the drug. Your SBC will show you how much copay and coinsurance you will pay for differently tiered drugs.
To confirm what tier a specific drug is in and how much you'll pay for it, reach out to your insurance carrier or sign into their member portal.
To find an in-network pharmacy, sign in to your insurance carrier's member portal or call your carrier.
This section will usually be toward the end of your SBC. It will let you know what your coinsurance is for in- and out-of-network pregnancy-related care.
This section usually appears at the end of your SBC. Typically this is where you will find coverage for treatments like acupuncture, chiropractic care, or cosmetic surgery. The SBC will let you know whether or not these treatments are covered but you will need to determine the actual coverage by reviewing the Evidence of Coverage document that you can request from your carrier.
Outside of your Summary of Benefits, here are some other terms you'll come across with your medical insurance.
The contribution scheme—sometimes known as contribution strategy—is the amount of money that an employer contributes to an employee’s benefits. This amount is included in the contract with the insurance carrier and can’t be changed until the company renews benefits at the end of the plan year.
You can find your contribution scheme in the Benefits section of your Gusto account.
No employer with fewer than 50 full-time employees is subject to a minimum contribution. If you have 50+ employees, your company is likely subject to the employer mandate of the Affordable Care Act, including the "Employer Responsibility" provision.
If the company contributes less than 100% of employee premiums, the remaining employee portion is collected by payroll deductions and left in your company bank account to pay the insurance premiums in one lump sum.
An insurance claim is a request for payment that you or your doctor submit to your carrier when you get items or services you think are covered. Reach out to your carrier directly to file a claim. Most carriers let you file claims through your online portal, or you can call their member services number for instructions.
When the carrier receives a claim, they will process it according to your plan details. After that, you'll receive an Explanation of Benefits detailing what your insurance paid for and what you still owe.
A premium is the total monthly cost to be enrolled in an insurance plan. If your company contributes to your premiums, you pay your share of the remainder through payroll deductions.
Health insurance carriers require a minimum percentage of all eligible employees to enroll in the employer-sponsored health plan. If an employee chooses to decline coverage for a valid waiver reason, then they are excluded from the total employee count and not counted against the participation requirement.
Examples of valid waiver reasons accepted by most carriers include:
Note: Having individual health insurance is not considered a valid waiver by most carriers.
A waiting period is the amount of time a newly eligible employee must wait to become eligible for benefits after their hire date. For people who have recently gone from part-time/ineligible to full-time/eligible, their waiting period starts on the day they became full-time/eligible. For example, say a company's waiting period is "1st of the month after hire," and someone is hired on the 15th of January. Their first day of insurance coverage would be February 1st. Newly eligible employees can choose their plan in Gusto as soon as their Gusto account is set up.
The waiting period is specified in a company's contract with the health insurance carrier and can't be changed until the company renews benefits at the end of the plan year. If you choose to update the waiting period during renewal, it will apply to all new hires for the following year.
Note: This article is intended to be used as an example to help you understand your Summary of Benefits & Coverage and is not a description of your specific plan. To view your SBC, sign in to Gusto and click the Benefits tab where you will find your plan details.