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Insurance Basics

To prepare to enroll, you can learn about the different types of health coverage, research and get answers to your questions, and learn about Utah based Carriers, Plans and Networks.

  • Different types of health insurance

Health Maintenance organizations (HMOs)

HMOs may limit coverage to providers inside their networks.  A network is a list of doctors, hospitals, and other health care providers that provide medical care to members of a specific health plan.  If you use a doctor or facility that isn’t in the HMO’s network, you may have to pay the full cost of the services provided.

HMO members usually have a primary care doctor and must get referrals to see specialists

Preferred Provider Organizations (PPOs) / Point-of-Service Plans (POS)

PPOs and POS give you a choice of getting care within or outside of a provider network.  With PPO or POS plans, you may use out-of-network providers and facilities, but you’ll have to pay more than if you use in-network ones.  If you have a PPO plan, you can visit any doctor without a referral.

If you have a POS plan, you can visit any in-network provider without a referral, but you’ll need one to visit a provider out-of-network.

High Deductible Health Plan (HDHP) / Health Savings Accounts (HSA)

High Deductible Health Plans typically feature lower premiums and higher deductibles than traditional insurance plans.  As of 2013, all HDHPs must have a minimum deductible of $1250 per year for individual coverage and $2500 for family coverage.

If you have a HDHP you can use a Health Savings Account (HSA) or Health Reimbursement Arrangement (HRA) to pay for qualified out-of-pocket medical costs.  This can also lower the amount of federal tax you owe.

Catastrophic Health Insurance Plan

  • A Catastrophic Health Insurance Plan covers essential health benefits but has a very high deductible.  This means it provides a kind of “safety net” coverage in case you have an accident or serious illness.  Most of these plans do not offer coverage for prescription drugs or shots as well as Co-pays, etc.
  • Premiums are usually much lower than traditional health plans but deductibles are usually much higher.
  • Available only to people under 30 and to some low-income people who are exempt from paying the fee.
  • Marketplace Catastrophic Plans cover 3 annual primary care visits and preventative services like physicals, shots, screening tests, etc. at no cost.
  • After the deductible is met, they cover the same set of essential health benefits that other traditional plans offer.
  • People with Catastrophic plans are NOT eligible for lower costs on their monthly premiums or out-of-pocket costs (Tax credits, Subsidies).

  • Insurance Terms 101:

What is a Premium?

A premium is a fixed amount you pay to your insurance plan, usually every month.  You pay this even if you don’t use medical care that month.

What is a Deductible?

If you need medical care, a deductible is the amount you pay for care before the insurance company starts to pay its share.  Once you meet your deductible, your insurance company begins to cover some costs of your care.  Some plans have lower deductibles, like $250.  Some have higher deductibles, like $2,000.

What is a Copayment?

A copayment is a fixed amount you’ll pay for medical service before or after you’ve met your deductible, depending on your plan.

What is Coinsurance?

Coinsurance is similar to copayment, except it’s a percentage of costs you pay.  For instance, you may pay 20% of the cost of a $100 medical bill.  So you would pay $20 and the health plan would pay the rest.

Out-of-pocket Maximum

The maximum dollar amount per year of eligible medical charges that the insured must pay.

In-Network vs. Out-of-Network?

Use of a health care provider that is a member of the plan’s provider network is called In-Network.  Use of a healthcare provider that is not in the plan’s provider network is called Out-of-Network.  The medical plans generally pay reduced benefits for Out-of-Network services.

What is a Health Savings Account (HSA)?

A high-deductible health plan is a health insurance plan with lower premiums and a higher deductible than a traditional health plan (HMO or PPO).  Being covered by an HDHP is also a requirement in order to have a Health Savings Account (HSA).

What is a High Deductible Health Plan (HDHP)?

A Health Savings Account is a tax-free savings account that belongs to you.  Money deposited into your HSA account can be a combination of employee and/or employer contributions.  You can use HSA funds to pay eligible medical, dental, and vision expenses.  The money in the fund rolls from year to year, so if you don’t use it you will not lose it.