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Why New Businesses Need Startup Insurance

Starting a new business? If the answer is yes, then your likely swamped with a million different thing to take care of. At this point you’ve likely already sought out legal advice, have a well-rounded business plan, and employees picked out, but did you remember to get insured? Protecting your business from the get-go with a comprehensive policy is crucial to running a smooth operation, and mitigating costly risks. But with so many different variables, it’s hard to know where to start or what you really need. Luckily, we’ve got a guide for you here that includes all of the necessities to ensure a smooth launch. And if you’re thinking specifically about your employees, we have another separate section exploring group health insurance.

Types of Insurance for Your Startup:

Worker’s Compensation Insurance

  1. This coverage pays for medical care and replaces lost wages for the worker affected.
  2. This is required insurance coverage. (Except in Texas)
  3. Insurance cost is averages around $2 for every $100 in payroll.

Unemployment Compensation Insurance

  1. Guarantees a portion of wages to employees in the event of a lost job.
  2. This is required insurance.
  3. Insurance cost varies by state.
person writing in notebook between two laptops
Planning for unforeseen disasters now can save you headaches later.

Disability Insurance (Required in Some States)

  1. This covers your employees if an illness or injury causes them to miss work.
  2. Rhode Island, Hawaii, New Jersey, New York, and California require this.
  3. Insurance cost will be about .25%- .5% of payroll.

General Liability Insurance

  1. Covers the costs of someone else injuring themselves on your property or from a business service/product.
  2. This is not required coverage.
  3. Average liability coverage is around $500 per year but may increase or decrease depending on businesses risk level.

Commercial Property Insurance

  1. This covers your physical property and spaces that belong to your business. (Including weather, vandalism, or theft)
  2. This is not required coverage.
  3. Average insurance cost is about $1500 per year.

Professional Liability Insurance

  1. This is also known as Errors and Omissions insurance. You’ll need this for higher risk businesses such as lawyers or doctors.
  2. This is not required insurance.
  3. Average insurance cost is about $1350 per year.

Product Liability Insurance

  1. This coverage protects you from faulty merchandise. If you operate with a manufacturer and/or packagers, this can cover you in case they make a mistake.
  2. This is not required insurance.
  3. The cost will be about .25￠ for every $100 in retail sales.

Employment Practices Liability Insurance

  1. This coverage protects you in cases of sexual harassment lawsuits or otherwise.
  2. This insurance is not required by law
  3. These policies have wider ranges due to many factors such as employee number, turnover, and type of business. The range will be from $800-$3000 per year.

Key Person Insurance

  1. This insurance type covers your business in the event that the business owner or another key personnel member dies or becomes disabled.
  2. This is not required insurance.
  3. Less than $1000 per year

Other Insurance Policies For Your Startup

Business Vehicle Insurance

  • Covers vehicles used for the business

Directors and Officers Liability Insurance

  • Covers the directors and officers of non-profit businesses in lawsuits claiming they mishandled their business

Business Identity Insurance

  • Covers cases of identity theft, even going so far as to notify your customers for you should you have their information

Terrorism Insurance

  • Covers cases of terrorism affecting your business. Check to make sure it is not already bundled with your other policies.

 

Protect Your Business With EZ.Insure

Of course, we hope you never have to take advantage of these types of startup insurance. However, when it comes down to it, it’s best to keep everyone covered. Whether you’re a home-based business or a larger one, you’ll benefit from the extra support.

 

EZ.Insure offers a helping hand by matching business owners with the perfect startup insurance plans guaranteed to line up with your needs and budget. Your agent will answer any questions you have, compare the plans for you, and even sign you up, free of charge. To get started simply enter your zip code in the bar above, or you can speak to an agent by  calling 855-694-0047. We make the entire process easy, simple, and quick.

 

FAQ

  • What insurance does a new business need? We recommend all new business get worker’s compensation (required in most states), general liability, and commercial property insurance. These three policy types ensure that your staff, assets, and clients are well-protected. Additionally, depending your industry, professional liability or product liability may be crucial too.
  • How much does business insurance cost for a startup? It all depends on the business size and specific type of coverage. For instance, general liability insurance averages at around $500 per year, while commercial property coverage is closer to $1,500 per year.
  • Can I start a business with no insurance? As discussed, some insurance types like workers’ compensation are legally required. Otherwise, the answer is yes, but it’s risky. Be sure to check your state laws regarding insurance requirements and understand that with no insurance, you could face major financial liabilities.
  • Is business insurance tax-deductible? Yes, in general business insurance premiums are tax-deductible as business expenses.
  • Do I need insurance if I’m a home-based business? Yes, like all other businesses, home-based companies still face risks including property damage and liability claims.

How Commercial Insurance is Changed by Risk Management

With all the recent catastrophes (and just plain old inflation), we’ve been watching insurance costs rise across the board. Higher deductibles are something even low-risk individuals are seeing. Unfortunately, insurance companies have to manage their bottom line, and doing this means raising rates.

The biggest problem pushing these rising costs is hurricane season. With their catastrophic damages, coming, again and again, commercial property rates are rising across the board–even affecting locations technically in a safer zone. The risk management is in response to this problem.

chess pieces to teach business owners risk management
Like chess, insurance companies plan out how their coverage is sold.

What Is Risk Management?

According to the Oxford dictionary, risk management (for business) is defined as “the forecasting and evaluation of financial risks together with the identification of procedures to avoid or minimize their impact.”

Basically, businesses (and homeowners as well) know losses can happen in the future. It’s not a question of “if something will happen,” but “when something happens, what will I do?”  The practice of asking these questions and then developing proper procedures is known as loss control.

For most businesses, this practice comes even without insurance, but the underwriting process mostly involves it before signing a commercial policy, especially now.

How Is It Affecting Commercial Insurance?

The first part of these changes come with the vicious backswing of all these catastrophes. With hurricanes alone, the damages swing up into $200 billion. Pairing this with the horrors Malibu saw just earlier this year, and you have an industry drained of its resources.

With all the payouts, it makes sense that the insurance industry has to “refill its coffers” so to speak. However, this comes from all of the people insured. So, the immediate effect is higher deductibles for some, and in places like Malibu, outright declination of coverage because the properties are “too high of a risk.”

The second, more positive result is instating risk management experts in insurance firms. Certain companies can offer in-house advice to businesses when they purchase policies from them. All in all, who can turn down loss control when it comes bundled with your commercial insurance?

What Does This Mean for Me?

For the average business, this could mean higher rates, but that isn’t a new topic of discussion. For people in certain industries, such as manufacturing where there is a high risk, it can mean that you will pay more. However, you could have a risk management team applied to your policy.

construction foreman with clipboard for risk management
Some industries like construction are affected by this more than others.

With more focus on controlling risks (that can be controlled) comes safer management in businesses across the board.

Besides that, make smart investments to pay for the premiums down the road. This helps to provide a solid hand in risk management. Thankfully, insurance agents will have your back with this down the line.

With EZ.Insure, your agent will answer any questions you have, compare different plans for you, and even sign you up when you’re ready, free of charge and without having to worry about being hounded by endless calls. To get started simply enter your zip code in the bar above, or you can speak to an agent by emailing [email protected], or calling 855-694-0047. EZ.Insure makes the entire process easy, and quick.

Avoiding Unexpected Medical Bills

avoiding unexpected medical bills text overlaying image of past due bills In general, bills of any kind are met with groans, but unexpected medical bills are undeniably the worst. They have a habit of coming at the worst time and weeks or even months after you’ve seen a doctor or had a procedure.  Despite the inconvenience they’re far more common than you would think even when you have health insurance. Unfortunately, not everything is covered by health insurance, which is a bitter pill to swallow considering how expensive it can be.

 

While we have no control over which services are covered (or how much we have to pay for them), we can understand exactly what the benefits and coverage are. As long as your deductible is met, you generally don’t have to worry about paying for routine exams, surgical procedures, or lab work. However, some procedures are excluded. These are primarily “elective” procedures, such as weight loss surgeries. Unless you are a special case, your chances of having them covered are slim. Below we’ll go over what insurance companies typically cover, what they won’t and how to avoid expected medical bills.

 

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What Most Health Insurance Plans Cover

Typically, depending on the type of plan you have, most health insurance plans cover:

 

  • Hospitalization
  • Maternity and newborn care
  • Emergency services
  • Electrocardiograms
  • X-rays
  • Preventative services such as:
    • Annual check ups
    • Routine blood work
    • Cancer screenings
    • Blood glucose tests
    • Vaccines
    • Blood pressure monitoring
    • Blood cholesterol monitoring

The primary differences in these coverages depend on your company and the plan tier you choose. For instance, some of these could require copays or coinsurance.

What Health Plans May Not Cover

Surprisingly, there are a lot of things that are either not covered or are only partially covered by most insurance companies. 

Travel vaccines

Typically, insurance companies will only cover routine vaccinations that are needed in the U.S. Tropical disease vaccines are not covered if you are traveling to other countries. Most health insurance companies see these as not medically necessary.

Acupuncture

Even though there are numerous studies that show acupuncture has real medical benefits, health insurance doesn’t agree, since it doesn’t fit into most concepts of western medicine. An acupuncture visit can cost anywhere from $100 and up, out-of-pocket.

IVF

Unfortunately, many state health insurance plans do not cover in vitro fertilization (IVF). Whether you’re having trouble getting pregnant or just simply want to go a different route to your pregnancy, the procedure can cost between $10,000 and $20,000. Currently there are only 15 states that have laws making IVF coverage mandatory for health insurance.

Cosmetic surgery

In general, health insurance does not cover elective surgeries. Meaning that if the surgery isn’t approved by your physician for medical needs rather than cosmetic reasons it won’t be covered. For instance, if you have large breasts, a breast reduction is only covered if your doctor provides sufficient evidence that your breasts are causing health problems. Make sure you talk to your health insurance provider and doctor to avoid unexpected cosmetic surgery bills.

Dental and vision

This one can be surprising, but most health plans will not cover dental or vision care. There are however add-ons that you can purchase that are basically extra coverage specifically for these types of care. Additionally, things like LASIK (laser eye surgery) are seen as elective and not medically necessary.

Weight-loss surgery

Just like with breast reductions, unless your weight is causing severe health conditions your health plan will most likely not cover it. There is no federal law requiring health plans anywhere to cover these at all. Even if your doctor deems it medically necessary it can be very difficult to get these procedures covered.

Hearing aids

This is another surprising one, you’d think that hearing aids would be automatically considered medically necessary. And many people agree with you, this has been an ongoing argument in the United States for years. But as it stands most plans won’t cover hearing aids even though they’ll cover hearing exams. Currently only 4 states require hearing aids to be covered.

Out-of-network doctors

If you are hurt outside of your plan’s coverage area you’re probably out of luck. Your health insurance will most likely not cover out-of-network doctors unless it’s an emergency. And even then it’s tricky. However, there are plan types that do have some out-of-network coverage such as Preferred Provider Organizations (PPOs). They cover these doctors much less than their network providers but there is still some coverage there.

 

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How To Avoid Unexpected Medical Bills

The good news is that you can avoid many unexpected medical bills by taking a few extra precautions before your appointments. Here are some simple strategies recommended by patient advocates and insurance professionals.

1.Read, Read, Read!

Every January, your health insurance company will mail or email you a packet containing all the information about your plan. Although the language can be a bit jargony and difficult to read, it’s in your best interest to read through this packet thoroughly. You can’t just assume specific procedures and services are covered. That is how you end up with unexpected costs. Instead you need to read the fine print to gain an understanding of what your plan’s specific benefits and limitations are.

 

We recommend highlighting important parts you think can or will pertain to you. Take note of your plan’s deductible, this is the amount you have to pay during your coverage period before your plan will begin paying for medical expenses. For example if you have a $500 deductible, you are responsible for paying for your medical costs until you reach that amount. After that your plan will pay for covered services in full for the remainder of the year.

 

You’ll also want to note which services are fully covered. For certain preventive services, such as a flu shot, annual physical, etc, you will only have to pay a copay with the remainder being covered by your plan. These things are essentially free so you’ll want to take advantage of them.

2.Stay In-Network

Insurance companies establish a network of covered healthcare providers, labs, and hospitals. Outside of the coverage area, you will face a huge financial burden. This is because your insurance company negotiates rates with their participating providers, giving you services for a cheaper rate. In general, health insurance plans do not have to cover care from out-of-network providers. However, there are a few exceptions. All plans legally have to cover out-of-network services if it’s an emergency. 

 

To stay on the safe side, always make sure your provider is in your network before your appointment or any procedure. Prior to something as major as surgery you will definitely want to double check what your plan will cover. Make sure the facility, anesthesiologist, and equipment are all covered under your plan. That way you don’t end up with any unexpected costs.

3.Ask Your Questions

Even if you know your doctor or facility is in-network, always ask about coverage. If your doctor wants to perform a blood test, an EKG, or any other procedure or test during your appointment, ask if it’s covered before you consent. If the doctor is unsure, you can request the procedure’s Current Procedural Terminology (CPT) code and then call your insurance company to find out if it’s covered. This is helpful because your insurance may cover one type of mammogram for instance, but not another. Having this CPT code will make it easy for you to get a direct answer quickly to avoid unexpected bills.

4.Compare Costs

Comparing costs is a must! If your doctor sends blood work out to multiple labs, or if you have several pharmacy options near your home check the costs. One lab or pharmacy may be cheaper than another.

5.Get Preauthorization

By now it’s obvious the best way to avoid unexpected medical bills is to do your homework ahead of time. This is especially true when it comes to procedures. Most health insurance plans will require you to have pre approval for surgical procedures. If you don’t get the approval ahead of time you’ll face penalties or having to foot the entire bill yourself.

6.Expect The Unexpected

In the best-case scenario, you won’t have any medical emergencies, but plan ahead just in case. At the moment you won’t have time to call your insurer and ask which hospitals are covered. So, in your spare time, look up which hospitals near you are covered. Spend some time looking over your ambulance coverage as well. According to a study published in JAMA Internal Medicine, 85% of ambulance services end in out-of-network charges. In an emergency the most important thing is making sure you get the necessary care. We know you might not be in a situation where you can stop and ask if the ambulance ride is covered. However, in a non-life-threatening situation take a moment and ask if there’s a way to get an ambulance service that your insurance company will cover.

7.Document Everything

A simple phone call can provide you with a lot of answers to important questions. Such as whether or not a procedure is covered, if the physician is in-network, and which lab is preferred. But even after you get your answers, take one more step and get it in writing. Always request any information you get to also be sent in writing, regardless if it is a conversation with an advocate, the billing department, or a patient representative. This way you have everything you need in case you need to dispute any questionable charges.

The Final Step Work With EZ

All of that homework is a lot right? Well, here at EZ we can minimize all of this for you. By working with one of our highly trained licensed agents you can get all the answers you need in one place. They can compare all of your plans to make sure you get the best coverage for you as well as translate all the legal jargon in your insurance information packet from step 1. And they do it all for free! No hassle, no obligations. Enter your zip code into the bar below for free instant quotes to get started or call one of our agents directly at 877-670-3557.

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How To Insure Your Small Business

how to insure your small business text overlaying image of a business man working Your company will be better protected from potential losses and liabilities if it has small business insurance. Business insurance can assist in covering claims resulting from professional errors and natural disasters. As well as bodily injuries and property damage. If you do not have this coverage for your company, you will have to to pay the cost of any claims out of your own personal assets. This forces the owners of many small businesses to make the difficult decision to permanently close their businesses. Continue reading this article if you want to learn how to obtain insurance for your small business.

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Get Started

Looking for business insurance and making sure you’re getting all the coverage you need can get complicated. So, let’s break down what you need to do to start.

1.Collect information

Obtaining business insurance is as complicated as any other aspect of managing a company. In order to provide you with an insurance policy, insurance companies require a substantial amount of information about your needs, risks, coverages, and costs. 

 

You might be familiar with some of it or have it handy. While other details might be trickier to track down. EZ can help in that regard. We have helped thousands of other customers through the commercial insurance application process. So, we know what is required of you and how to get it. Let’s go over the requirements so the application process goes as quickly and easily as possible.

Business Operation Information

Your insurance agent or company will need a thorough understanding of your company’s operations in order to provide you with an accurate quote. If you’re in the contracting business, for instance, it’s not enough to know that you’re an electrician. The percentage of commercial versus residential work you do, whether or not you use subcontractors, do you use ladders or scaffolding, do you install alarms, etc., are all relevant details. 

 

The types of questions you’ll be asked vary widely by profession. It’s fine if you don’t know the answers right away. But you’ll save time and energy if you have a solid grasp of your operations before beginning the application process. In order to receive quotes from insurance companies based solely on operational exposures, you must be as specific as possible with your agent. 

Ownership and Experience

Questions about yourself, such as how long you’ve been in business and how much experience you have, will be asked. As well as questions about your company’s operations. Your quote will be based on the information you provide to the insurance company regarding the business’s owners and, in some cases, employees. If your resume is strong, you may be able to negotiate a lower price. 

Financial Data

Get some numbers ready. Your insurance agent or provider will inquire about projected earnings, employee headcount, outside vendors, and stock on hand. These estimates are predicated on the length of your policy, which may or may not align with your fiscal year. If your policy is audited at the end of the policy term and you were wrong in your projection, you could be penalized. However, you are not required to provide any confidential reports.

Contracts

If you use contracts with customers, your insurer will probably want to see a sample to make sure you’ve included all the necessary safeguards to protect your business from claims and lawsuits. If you offer professional or other services but don’t have a contract, you may be required to draft one before receiving an estimate. 

Claims History

You will also need copies of your “loss runs,”. Which are the insurance term for the report that details all insurance claims made on behalf of your company. A three to five year claims history across all of your policies is typically required by insurance companies. If you are unable to obtain these reports from your current insurance agent, the quoting process will be significantly slowed down. Your insurance agent will be able to assist you in writing a letter to request these reports. 

Any Current Policies

Although it’s not required for a quote, having copies of your current policies on hand can help the insurance agent review your coverage and identify any potential gaps. The truth is that a lot can change in a year. It is possible that a policy review will serve as a prompt to either add or remove pieces of machinery, vehicles, etc.

2. Research

When was the last time you purchased something that needed to be assembled, but you chose to ignore the instructions? How did you determine that it was constructed properly? Unless you follow the steps, it is difficult to know for sure what the outcome will be. Obtaining the appropriate insurance for a small business is no different.

 

Reading the instructions isn’t nearly as interesting as learning about the different types of business insurance. Even though you might want to skip this step, spending as little as twenty to thirty minutes doing research could end up saving you a lot of time and money. You don’t need to become an expert. But having a fundamental understanding of the coverage options will help you make better decisions. Regardless of how long you’ve been in business, whether or not you seek the assistance of a professional. The first part of your research should be knowing the types of insurance available.

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Types Of Business Insurance

  • General Liability – For a smaller company, this can be a lifesaver in the event that you are sued for damages or injuries caused by a third party.
  • Errors and Omissions or Professional Liability – These policies can help a small company defend itself against claims of negligence or bad advice.
  • Group Insurance – Group insurance is a great way for small businesses to provide health care coverage and other medical benefits to your staff.
  • Workers’ Compensation – In the event of a workplace injury or illness, these policies will pay for the employee’s medical care, ensuring their safety.
  • Property Insurance – Coverage is good in the event that a company’s inventory or technological equipment are damaged or destroyed as a result of a natural disaster.
  • Commercial Auto – This covers any vehicles that your company uses for work.
  • Business Owner’s Policy – Small business insurance is a type of business insurance package that protects businesses from a variety of risks, including those associated with property and liability.

Every business has its own set of needs. Once you know the basics of business insurance, you should look into which ones are best for your business. For instance, an accountant who works from home might have a basic general liability policy. But an accountant who owns a building that customers come to would be better off with a business owners policy, or BOP, that covers more. Even though both accountants do the same job. There are differences in how they do it that affect their insurance needs.

3. Contact a Business Insurance Agent

You can work with an EZ agent who specializes in small business insurance to get the coverages you need. To work with our experts, you can get a free quote online. Talking to your insurance agent about your business can help you figure out what you need and how much coverage you need. They can help you figure out what kinds of coverage you can get and how much it will cost.

How To Determine The Business Insurance You Need

What kind of insurance is best for your business depends on your specific needs and the laws in your state and industry. You’ll need to carefully look at your business to figure out what kinds of insurance you need. Talking to an insurance expert is always a good idea if you want to find the right mix of coverage to make sure your business is legal and financially safe.

1. Analyze your legal responsibilities and business assets.

First, you should take a close look at your business and assets to figure out what you want to insure. What kinds of insurance are required by law, and where do your other responsibilities lie? For example, a machine shop might want to make sure its workers are covered in case they get hurt, while a jeweler might want to make sure they aren’t robbed. As required by law, the owners of a large distribution company would insure both their goods and their employees. Each state has its own rules, so make sure to talk to your agent to figure out what you need to insure.

2. Analyze Your Risk

Look at your new risks and responsibilities. This will help you figure out what kind of insurance will protect your business the best. For example, if your business is on the bottom floor of an office building in a flood-prone area. You’ll probably want comprehensive flood insurance. A business in a dangerous industry will probably want insurance to cover the risk of its employees getting hurt.

3. Decide How Comprehensive Your Coverage Needs To Be

Depending on what you’re insuring, you may need basic insurance or insurance that covers everything that could go wrong. Think about how much the loss would cost and how likely it is to happen. This will make it less likely that you will pay too much for coverage you don’t need or not get enough coverage for your safety.

How EZ Can Help

EZ can help whether you need group health insurance for your employees or commercial insurance to protect your business. Our agents work with the best insurance companies in the country to make sure you and your employees get the best insurance. In fact, we can find you the best coverage for your budget and save you hundreds of dollars a year. Call us at 877-670-3531 for help with group health insurance or 877-670-3538 for help with commercial insurance.

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How To Meet Your Deductible

how to meet your deductible text overlaying image of a piggy bank and a stethoscope There are associated costs when enrolling in a health insurance plan. These costs include premiums, coinsurance, and deductibles. The deductible is what we will concentrate on in this article. Your deductible is the amount you pay out-of-pocket before your health insurance starts to pay your covered medical services for the remainder of the year. By “remainder of the year”, we mean that your deductible renews annually. Therefore, it’s important to understand how to meet the deductible before it renews and what happens after you’ve met it.

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What Counts Towards Your Deductible

Not knowing which expenses count toward your deductible could lead you to throwing money away. There are 3 basic things to remember if you want to know what payments count towards it. Any out-of-pocket payment that is:

 

  • Medically necessary
  • For a service covered by your plan
  • Within your network

To simplify further, the following are some of the medical services you pay that would count towards your deductible:

 

  • Hospital bills
  • Surgery costs
  • Lab tests
  • MRIs and CAT scans
  • Anesthesia
  • Doctor visits not covered by copays
  • Medical devices such as pacemakers

To give you a real-world example, if you have to have a procedure, you must first pay your deductible before the insurance company will cover the remaining costs. Say the surgery costs $25,000 and your deductible is $2,000. You will pay $2,000 and then the insurance company will pay the remaining $23,000.

What Doesn’t Count Towards Your Deductible

It’s just as important to know which expenses don’t go towards your deductible. This way if you’re keeping track (which you should be) you won’t think you’ve paid more towards your deductible than you actually have. 

Copays

A copay is the portion of your medical expense that you are responsible for usually at the time of service. Typically copays are a modest, set amount. For example, you may have a $25 copay every time you visit your primary care physician (PCP). Or you may have to pay $15 every time you fill a prescription. The amount for each service varies depending on your insurance company and plan. Unfortunately these payments don’t count towards your deductible. They do however count towards your out-of-pocket maximum, which is the max amount of money you have to spend on your healthcare in a single benefit year under your plan.

Coinsurance

Your coinsurance is another cost-sharing part of your health plan. This is usually shown as a percentage and shows exactly the percent you have to pay and the percent your insurance has to pay after you have met your deductible for the year. For example if you have a 20% coinsurance for a covered service, your insurance company will pay the other 80%. Say you’ve already met your deductible and you need a procedure that costs $1200,with your 20% you pay $240 and your health insurance will pay the remaining $960. Just like with copays, your coinsurance won’t count towards the deductible, but it does count towards your out-of-pocket maximum.

Premium

Your premium, as you know, is the amount you pay monthly to keep your health insurance policy active. While your premium and deductible do have a significant relationship, since the lower your premium the higher your deductible and vice versa, it still doesn’t count towards your deductible. Your premium will also not count towards your out of pocket maximum either.

Out-of-network care

Out-of-network care means you went to a provider that is not contracted with your health insurance plan. None of your costs with this provider will go towards your deductible or your out of pocket maximum. The only exception to this rule is if you have a health plan that does have out-of-network coverage such as a Preferred Provider Organization (PPO). A PPO has 2 out of pocket maximums, one that works like every other plans maximum and one specifically for out-of-network services.

Services not covered by your plan

If you get care that your plan does not cover it won’t count towards deductibles or out of pocket maximums either. This can include things like chiropractors, acupuncture, dental, and vision services. 

Family Plan Deductible

Deductibles work differently for individual plans than they do for family plans. A family deductible is the maximum amount that a family must pay out-of-pocket before they start paying coinsurance or copays, rather than the full cost of services. Most family health insurance policies have 2 deductibles. The first being each individual member has their own individual deductible and the second is the overall family deductible. Each time a family member pays towards their own deductible the amount is also credited to the family deductible. If one member meets their individual deductible before the others, then full coverage begins for that person alone, but not for the other family members.

 

Once the family deductible is met then everyone will receive post-deductible coverage even if not all members met their individual deductible. Family plan deductibles are typically double the amount of an individual plan’s deductible. Although deductibles can vary, it’s uncommon for a family to pay more than the cost of 2 individual deductibles in a single year. This obviously doesn’t apply if each family member has separate policies, as the policies will not coordinate together. 

 

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High Deductible Health Plans (HDHP)

Whether you have a family plan or an individual plan you have an option with your deductible. A HDHP is not just a plan that appears to have a high deductible, it is a distinct type of health insurance – not just a generic term. A high-deductible health plan is a health insurance policy with a deductible of at least $1,400 for individual coverage or $2,800 for family coverage. These plans also allow you to make contributions to a tax-advantaged Health Savings Account that can help you save money towards your health care. A policy with a high health insurance deductible will save you money on premiums, but you may be responsible for out-of-pocket expenses of up to $8,700 for individual coverage and $17,400 for family coverage.

 

In recent years, HDHPs have become increasingly popular. This is because they come with lower premiums. However, even though your monthly premium is lower your out-of-pocket medical expenses tend to be a lot more expensive than someone with a LDHP. Low deductible plans come with a higher premium, but medical expenses are lower. If you expect to have very few medical expenses then a HDHP might be right for you. This is because the low premiums combined with a deductible you rarely use may save you more money. LDHP are best for people with chronic conditions or families who expect to have multiple doctor visits per year. This reduces your upfront costs allowing you to manage your expenses easier.

Once You Meet Your Deductible

After you’ve met your annual deductible, your insurance will begin paying its portion of the cost of your covered care for the remainder of the year. After meeting it, your portion of the cost of care will either be a copayment or coinsurance. It’s important to note that any health insurance plans purchased on the Marketplace legally have to cover the cost of some preventative healthcare services even before you meet your deductible. This is for any plan regardless of type or tier. Some of these preventative benefits include:

 

  • HIV screening
  • Blood pressure screenings
  • Obesity screenings and counseling
  • Lung cancer screenings
  • Fall prevention
  • Tobacco use screenings

FAQs

  • When does my deductible renew?

Many health insurance plans base their renewal on the calendar year. This means that on January 1st of each year any expenses you have paid towards it are zeroed out. Some health plans may follow a plan year schedule instead. This means that it will renew on the date that your health insurance policy renews in the new year rather than January 1st. Understanding your plan’s deductible schedule can help you avoid unexpected medical costs. For example, if you were planning on waiting until after the holidays to get a medical service, and your plan renews based on the calendar year, you’ll want to rethink that plan. On the other hand, if it renews on your plan renewal date, you may have some wiggle room. 

  • What does “no charge after deductible” mean?

This phrase means that once you meet your deductible the insurance company will cover the full cost of covered medical expenses, up to the plan’s limits. However, most health insurance plans usually only pay 100% of medical costs once you’ve reached your out-of-pocket maximum. 

  • Is my deductible the same as my out-of-pocket maximum?

No, they work similarly in that they serve as a limit to how much you have to pay for your covered medical expenses, but the limits are two different things. Your out of pocket maximum is the most you will pay in one year. Once you’ve met this limit your insurance will cover 100% of all additional covered medical costs for the year in full. Your deductible is how much you pay before your plan begins their cost-sharing feature with you, such as your coinsurance.

Anything that counts towards your deductible also counts towards your out-of-pocket maximum as well. As noted above, there are some costs such as your copays and coinsurance that don’t count towards it, but will count towards your out-of-pocket maximum. Think of your deductible as a milestone, once you reach it you pay significantly less towards your healthcare, reaching your out-of-pocket maximum is the end game once you reach that you pay nothing towards your covered healthcare costs.

 

Working With EZ

EZ.Insure offers access to local, highly-trained insurance agents who will shop around for the most cost-effective policy. We can save you hundreds of dollars annually by searching for a suitable plan both on and off the Marketplace. We can also determine whether you qualify for local discounts and apply them to your plan. The best part is that we do all of this without charge! Simply enter your zip code into the box below to receive free, instant quotes, or call us at 877-670-3557 to speak with an agent who can answer all of your questions and find you the ideal plan.

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