PPO $900 Deductible Q&A

Definitions

• What is a deductible?
• What are covered charges?
• What are wellness services?
• What is an individual deductible carry-over provision?

Costs, deductibles, and services

• Is it true that a high deductible plan always costs the employee more?
• Will everyone enrolled in the PPO $900 Deductible plan be affected by the increase in family deductible and copay maximums?
• Does an employee with only a covered spouse (or only one covered child) have to meet the $2,700 family deductible maximum?
• Which services are subject to the deductible? Which are not?
• Are there two $900 deductibles—one for In-Network and one for Out-of-Network?
• If I meet the deductible in my first year on the plan, do I have to meet the deductible the next year?
• Once the In-Network deductible is met, how long do I have to pay the 10 percent copay?
• Once the Out-of-Network deductible is met, how long do I have to pay the 30 percent copay?

Family Coverage

• Does every covered family member on my medical plan have to meet the $900 deductible?
• Can an individual family member contribute more than $900 to the family maximum?
• How does the family copay maximum work?
   

---

Definitions

What is a deductible?

A deductible is the amount of covered charges ($900 in this case) you must pay before the plan begins to pay benefits. A medical deductible, just like an auto insurance deductible, results in a lower premium, but means that you have higher initial out-of-pocket expenses when you have a claim.

What are covered charges?

Only covered charges count toward the deductible. For In-Network providers, covered charges are the negotiated amounts that the provider has agreed to accept as payment in full under written agreement with Anthem. For Out-of-Network providers, covered charges are limited to Usual & Reasonable (U&R) reimbursements. When you use an In-Network provider, the provider writes off amounts above covered charges. When you use Out-of-Network providers, you are responsible for paying amounts in excess of covered charges; these excess charges do not count toward the deductible.

In-Network example: Your In-Network doctor charges $65 for an office visit and the Anthem-agreed upon reimbursement (covered charge) is $50. You pay $50, the $50 is applied to the deductible, and the physician writes-off the $15 charge that exceeds the covered charge.

Out-of-Network example: Your Out-of-Network doctor charges $65 for an office visit; the U&R reimbursement (covered charge) is $50. You are responsible for $50 and the $15 that the Out-of-Network provider is not obligated to write-off: you pay a total of $65. Only the covered charge of $50 is applied to the deductible.

What are wellness services?

The deductible does not apply to wellness services. Wellness services include “screening” tests and preventive services such as childhood immunizations. Services will be treated as wellness claims when they are billed by the provider with appropriate wellness procedure and diagnosis codes. For example, if an office visit is billed as a physical exam without symptoms of illness, a deductible will not be applied. If the physical exam is billed as a problem-focused exam with a diagnosis of chest pain, the deductible will be applied. Examples of typical wellness services that are covered with only a copay and no deductible are the following screening exams: annual physicals; Pap tests; mammograms; routine eye and diabetic eye exams; screening lab tests (such as for prostate, cholesterol, colon cancer), colonoscopy, and some screening bone density exams (check with Anthem for specific bone scans). Wellness services also include routine childhood, adolescent, and adult immunizations. Immunizations required for travel and exams required for insurance, camp, or employment are not considered wellness services.

What is an individual deductible carry-over provision?

In some cases, the amounts paid toward an individual deductible can carry over to the following year. If the deductible applies to an individual, but the individual does not meet their deductible for the year, any claims for services incurred in the last three months of the year (October, November, and December) are carried over and are applied to the deductible for the following year.

Examples of carry over for an employee and spouse covered in the $900 deductible plan:

• Employee has $200 in covered charges applied to the deductible in March and $550 in October and no other charges during the year. The $550 paid toward the deductible in October is carried over to the following year, because the individual $900 deductible was not met for the year ($200 + $550 = $750). The employee will only have an additional $350 in covered services to meet the deductible ($550 + $350 = $900) in the carry-over year.
• Spouse has $400 in covered charges in March and $550 in October and no other charges during the year. The spouse met the individual deductible in the current year, so no covered charges are carried over to be applied the next year. The spouse must meet the entire $900 deductible in the next year.

top

---

Costs, deductibles, and services

Is it true that a high deductible plan, like $900, always costs the employee more?

No. A deductible plan can often be the most cost-effective plan. This is because your medical costs are a total of what you pay out-of-pocket and what you pay out-of-paycheck in premiums. Since a deductible results in a lower premium, that difference can often more than make up for the deductible cost. Each employee needs to evaluate their total medical costs to decide which plan is most cost effective for them.

Does an employee with only a covered spouse (or covered child) have to meet the $2,700 family deductible maximum?

No. If you have only one covered dependent (e.g., an employee and spouse, or an employee with one child), the individual deductibles would be met at $1,800 and both member’s claims would begin to pay at the 10 percent copay for In-Network services and 30 percent copay for Out-of-Network services. Two individuals always reach their individual deductibles before the family deductible, so the family deductible does not apply in these cases.

Which services are subject to the deductible? Which are not?

The $900 deductible is applied to all covered charges for medical services, with the exception of wellness services, outpatient prescription drug benefits, mental health/chemical dependency benefits, and transplant services. Other charges that you may be required to pay that do not count toward the deductible are charges in excess of covered charges, and charges for services that are not a covered benefit.

Are there two $900 deductibles and copay limits—one for In-Network and one for Out-of-Network?

Yes.  Effective January 1, 2008, there will be a separate In-Network and Out-of-Network deductible and copay limit.  This means that there is a $900 deductible for In-Network services and a $900 deductible for Out-of Network services.  The copay limit for both In-Network and Out-of-Network services is $1,000 with a $3,000 family maximum.

If I meet the deductible in my first year on the plan, do I have to meet the deductible the next year?

Yes. The deductible is an annual deductible that must be met each year; however, there is an individual carry-over provision in certain cases.

Once the In-Network deductible is met, how long do I have to pay the 10 percent copay?

The 10 percent copay applies until an individual has either met the individual $1,000 copay maximum or the family has met the family $3,000 copay maximum, then the plan begins to pay 100 percent of covered charges.

Once the Out-of-Network deductible is met, how long do I have to pay the 30 percent copay?

The 30 percent copay applies until the individual has either met the individual $1,000 copay maximum or the family has me the family $3,000 copay maximum, then the plan begins to pay 100 percent of covered charges.

top

---

Family Coverage

Does every covered family member on my medical plan have to meet the $900 deductible?

If you have one, two, or three family members covered under your enrollment, each has to meet an individual $900 deductible. If you have four or more family members enrolled with you, not every family member has to meet the individual deductible due to the $2,700 family deductible maximum. Here are the deductible rules, assuming that all services are received at an In-Network provider:

• No single family member has to pay more than $900 in deductible;
• no single family member can contribute more than $900 to the family deductible maximum; and,
• the $2,700 family maximum deductible can be met by any combination of individual family member’s claims that are applied to their $900 deductible.

Example: For an employee, spouse, and four children (a total of six covered individuals), if each family member pays $450 in deductibles, the family deductible maximum would be met ($450 x 6 = $2,700). In this example, no family member would have to pay $900 in deductibles before the family deductible maximum is met.

Example: For an employee, spouse and two children (a total of four covered individuals), if the employee, spouse, and one child each met the $900 deductible, the remaining child would not have a deductible.

Can an individual family member contribute more than $900 to the family maximum?

No. Each individual member can contribute no more than his or her $900 individual deductible to the family maximum.

How does the family copay maximum work?

The family copay maximum is similar to the family deductible maximum in that:

• No individual family member pays more copays than the $1,000 individual maximum;
• no individual can count more than $1,000 in copays toward the $3,000 family copay maximum;
• any number of individuals in the family can contribute toward the family copay maximum; and
• the copay maximum is on an annual basis; however, there is no carry-over provision to the following year.

top