Co-Insurance vs. Copay

Health insurance is a necessary part of doing business. Group health insurance is a great option for companies of any size because it can create low and affordable premiums. The concept is simple; larger groups mean lower premiums. 

In order to make the right decision for your employees, it’s important to understand the basics of health insurance. Unlike other types of insurance, your employees may still be held responsible for complicated out-of-pocket costs regarding health care. Coinsurance and copays are both forms of cost-sharing between health insurance providers and policy holders.

What Is Coinsurance?

Coinsurance is the calculated percent that you pay for medical charges, with the rest paid for by your health insurance provider. Typically, coinsurance is applied only after your deductible has been met. Your provider may apply a different percent to each healthcare service, meaning you can pay a different amount for: 

  • doctor visits
  • lab work
  • prescriptions

What Are Copays?

Copays (or copayments) are set rates you pay for individual healthcare services. They may take effect before or after you have reached your deductible. Copays typically start at $10 and can go up depending on the type of care you receive:

  • office visit
  • specialist visit
  • emergency room visits
  • prescriptions

More Helpful Health Insurance Terms

Premium: the amount you pay monthly for health insurance

Deductible: the set amount you pay before health insurance starts to share the cost of healthcare services

Maximum: the most out-of-pocket healthcare expenses you have to pay in one year before insurance covers 100% of your bill

Network: The group of doctors/providers who accept your health insurance. 

In-network: A provider who works with your insurance plan for a discounted rate

Out-of-network: A provider your insurance plan does not have a negotiated discounted rate with

The above only applies if you always choose the doctors, clinics and hospitals within your health plan’s provider network. If you opt for an out-of-network doctor, you may be responsible for the entire expense.

As an employer, it is important to provide a variety of policy options since everyone’s health insurance needs are different. We can help you to wade through the laws and restrictions on health insurance and put together a group policy that will appeal to your company and your employees. We don’t just drop a contract on your desk and ask you to sign it. We work hard to get you the best possible deal available. Contact us now to learn more.