Benefits 101: Defining Common Insurance Terms

April 8, 2019

Signing up for employee benefits is an exciting time for you and your team. But it can also be overwhelming as an employer, especially if you’re doing this for the first time. Likewise, your employees may have many questions about their coverage.

That’s one of the reasons why Honeybee was built in the first place. We strive to make benefits simple and easy to understand for both the employer and employee. We decided to take out all the complicated paperwork, replace it with a straight-forward administrative platform, and provide a simple app that employees can use to see all their coverage information, submit claims and get access to exclusive offers and deals.

Insurance lingo, on the other hand, may not always be the easiest to understand. So, we decided to define some of the common insurance terminologies that you and your employees may come across. Here are seven insurance terms and what they actually mean:

Make sure to bookmark this page to refer back to if needed.

Extended Health Care

Extended Health Care is a health insurance benefit that helps employees and their dependents pay for medical expenses that are not covered by their provincial plan. Though the Ontario Health Insurance Plan (OHIP) covers a number of health services, it doesn’t cover all medical expenses. As an employer, you can provide extended health care benefits to cover extra expenses that OHIP does not cover – like prescription drugs, paramedical services, emergency travel assistance, vision and dental care, medical equipment (e.g. hearing aids), hospital care accommodations, etc.

Co-insurance

Co-insurance is the amount (in percentage) an insurance provider will pay to cover an employee’s health care costs. If co-insurance is less than 100%, then the employee will have to cover the rest.

Let’s say the co-insurance is set at 80%. If a dental visit cost the employee $200, the insurance provider would cover $160 and the employee would have to pay $40 out of his/her pocket. The great thing about Honeybee is that employees have the option to pay for that $40 using the flexible dollars in their Health Account – so, if they have enough funding available, they’ll be able to get reimbursed.

Deductible

A deductible is the amount (in dollars) employees will have to pay out of pocket before their health coverage kicks in.

For example, let’s say your employee has a deductible of $200 and he/she incurs $500 in prescription drug costs over the course of the year. That employee would be required to pay $200 out-of-pocket before insurance would cover the remaining $300.

Honeybee lets employees choose their deductible amount for prescription drug coverage so it fits their needs. For example, if an employee has a condition that requires him/her to purchase prescription drugs that require refills throughout the year, then he/she would likely benefit from choosing a low deductible in order to get more coverage. However, if an employee chooses a high deductible, he/she can always submit claims under the Health Account, provided that there’s enough funds available to cover the costs.

Scaling

Scaling (plaque removal) is a dental procedure commonly done for patients with gum disease. Some employees who require this treatment may be confused by how much their insurance covers. That’s because the insurance and dental industries have their own lingo. In Canada, scaling is billed in units of time. One scaling unit equals 15 minutes of procedure. So, if an insurance provider covers eight scaling units per person, that would mean that you get coverage for a maximum total of two hours of plaque removal.

Coordination of Benefits (COB)

Coordination of benefits is a provision that allows a person to claim their expenses under two health insurance plans in order to receive coverage for the largest amount possible. The rules around COB often come into play for employees with spouses or dependents.

Say your employee, Bob, is a dependent on his spouse’s plan. He must follow the rules of Coordination of Benefits. This refers to the order in which Bob must claim expenses. If Bob is submitting an expense for himself, he will need to send it to his benefits plan first, then send the remainder (if there are any) to his spouse’s plan. If the two have any children, then whoever’s birthday falls the earliest in the year has to send their child(ren)’s claims to his/her plan first.

Per Practitioner vs. Combined Maximum

An employee benefits plan may specify the amount of coverage (in dollars) per practitioner an employee gets or the combined maximum they’re covered for.

If employee Bob, for example, has paramedical coverage and is covered for $400 per practitioner, then that means he can use $400 towards massages, $400 towards naturopathic visits, $400 towards physiotherapy, etc.

But, if Bob is covered for a combined maximum of $400, then that means he has a total of $400 coverage for all paramedical services. How he decides to use that $400 is up to him. So, if he wants to claim $100 for massages, then he has $300 to use for other paramedical services.

Premium

This is the cost you (the employer) must pay, in periodic increments (usually per month), for an insurance product. Statistical data and mathematics are involved in determining this cost, which includes health, age, vocation, amongst other factors that determine the probability of a claim. That’s one of the reasons why insurance costs can go up or down each year, since ongoing employee usage reports present new data to be considered.

We hope these definitions were helpful!

If you’re a Honeybee client and have additional questions regarding insurance terms or your coverage, feel free to contact our Honeybee Care Team anytime. We’re available Monday to Friday from 8:30 am – 5:00 pm ET by phone or text at 1-866-626-6642, or by email at help@myhoneybee.com.

Remember to always ask for clarification before having a procedure done or receiving a service.