#Copay vs coinsurance free#

Keep in mind, however, that most insurers require the employer to cover at least half of the premium cost for employees.Įmployers are free to require employees to cover some or all of the premium cost for dependents, such as a spouse or children. Usually health insurance premiums are billed and paid on a monthly basis.Įmployers typically require employees to share the cost of the plan premium, usually through employee contributions right from their paychecks. Premium ContributionsĪ health insurance premium is the total amount that must be paid in advance in order obtain coverage for a particular level of services. For a review of which types of health plans use which types of cost-sharing methods, see “Plan Characteristics and Types” in the tool box. What level of out-of-pocket expenses (copayments, co-insurance, deductibles, and so on) will your employees and their dependents incur when they get care?īelow we provide more information about premium contributions as well as the different types of cost-sharing at the time of service: copayments, co-insurance, deductibles, and caps on out-of-pocket expenses.What amount or percentage of the premium for dependents will you require the employees to cover?.What amount or percentage of the employee-only premium will you require the employees to cover?.With this in mind, the decisions you’ll have to make include: The general rule is that the greater the cost-sharing at the time of service, the lower the premiums. This may take the form of: copayments, a fixed amount paid by the employees at the time they obtain services co-insurance, a percent of the charge for services that is typically billed after services are received and deductibles, a flat amount that the employees must pay before they are eligible for any benefits. (Most insurers require employers to contribute at least half of the premium cost for covered employees.) The employer pays a portion of the premium and the remainder is deducted from employees’ paychecks.

Generally, costs are shared in two main ways: It’s important to understand that the cost-sharing structure can have a big impact on the ultimate cost to you, the employer. The term “cost-sharing” refers to how health plan costs are shared between employers and employees.

Copay vs coinsurance