Read your summary of benefits & coverage (SBC)

An SBC describes your plan details, what it covers, and the cost of various treatments. The top of the SBC will outline the name of your insurance carrier, the name of your plan, and your coverage period or the dates that you are covered by this plan. Below will be a chart that answers several questions about your plan. This article will help you understand that basics of reading an SBC.

Deductible

A deductible is the amount of money you have to pay out-of-pocket for your covered healthcare services until your insurance company starts to pay. Usually this is the first item explained on your SBC. The sample SBC below indicates that this member must pay a $500 deductible before his/her insurance coverage begins to pay for services. Pay particular attention to when the deductible resets. Usually the deductible resets based on a calendar year, meaning that on January 1 you will need to meet your deductible again before the insurance starts covering services.

Out of Pocket Maximum (OOP)

The OOP max is the most money that you will pay for covered services during a plan year. This OOP 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 OOP Max. The example below shows a member whose OOP max is $2,500 for an individual or $5,000 for a family plan.

Coinsurance and Copayments

SBCs usually have a table that describes common medical events and how much you’ll need to pay for those treatments. Coinsurance is the percentage of the total cost of the treatment that you are required to pay.  Copayments are fixed dollar amounts that you pay for covered treatments. Below is a sample chart on an SBC showing coinsurance and copayments. Participating vs. Non-Participating Provider means that your doctor is in- or out-of-network with your insurance carrier. Some plans will cover part of these visits and others won't.

In- and Out-of-Network Treatment

Your SBC will specify whether or not your plan has a network of providers. This means that the insurance carrier has negotiated a fixed price for treatment with specific doctors. These doctors are “in-network.”  Some plans will cover a certain percentage of costs if you receive out-of-network treatment and some won't. Be very careful about this detail of your health insurance plan because it can be very costly to you if you seek out-of-network treatment and you have a plan that only covers treatment in-network. The easiest way to find a doctor who is in-network is to use your carrier’s “find a doctor” tool directly on their website.  

Prescription Drug Coverage

Each insurance carrier has a formulary of prescription drugs that dictates what tier each drug is in. 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. The example below shows the different tiers and how much the member will pay for in- and out-of-network pharmacists. If the member needs a non-preferred brand drug (tier 3) from an in-network provider and the drug costs $100, the member can expect to pay $40 and the insurance will cover the remaining $60. The fourth column describes any limitation or exception to the coverage.

Pregnancy

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. In the example below, the member can expect to pay 40% of a prenatal treatment from a doctor who is out-of-network.

Other Treatments

This section usually appears at the end of your SBC as well. Typically this is where you will find coverage for treatments like acupuncture, chiropractic care, cosmetic surgery...etc. 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 that you can request from your carrier.

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, please log on to your Gusto account and click the Benefits tab where you will find your plan details.

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