How to Read a Health Insurance Plan

In order to understand your health insurance coverage, you will need to read over your plan.  You will be able to get this information from your human resources department or the directly from the health plan company itself.  It will be in the form of benefit summaries or a document called a “summary plan description.”

• Learn about the jargon that is used in your health insurance plan.  Oftentimes this can be found within the glossary that is located at the end of your benefits information or summary plan description.  Sometimes you will need to go to the health plan's website for it though.


• Find out what type of health plan you have.  The different types of plans include “health maintenance organizations,” “preferred provider organizations,” “point of service,” “high-deductible health plans” and “indemnity plans.”  Look it up in the glossary of terms to understand the basic concept of your plan.


• Look over the plan’s deductible.  This is the dollar amount that you must pay before your health insurance plan will pay anything.  The term “co-insurance” is the part that you are responsible for paying. 


• Pay attention to any differences between in-network and out-of-network benefits.  If you have both types of benefits, do a side-by-side comparison to see what the different coverage amounts are for services.  Oftentimes in-network care coverage is 100 percent paid by the insurer but out-of-network is paid at a much lower percentage.


• Look at the co-pays that you are responsible for.  There will be different amounts listed for different things such as preventive care visits, routine visits, specialist visits, outpatient procedures, hospitalization and mental health or substance abuse treatment. 


• Find the section that has to do with pre-authorization and exclusion of services.   Pre-authorization is usually required for hospitalization, surgery, mental health and substance abuse treatment.  Some of the typically excluded services include things like cosmetic procedures.  This information should be listed in your summary plan description.


• After you review this information and find that you still have questions, call the member-services phone number that is located on the back of your medical identification card.  They will be able to provide you with the answers you need.