Tip #399: Do You Know How Your Health Plan Deductible Works?
Edward is in a group health plan that had an April 1st renewal date. His carrier offered an 8% increase to his in force $1,500 deductible plan, but 0% if he switched to a $2,000 deductible.
His employer chose the higher deductible with no premium increase.
Quick quiz.
Edward had a few outpatient tests in February, thus satisfying his $1,500 deductible. Now he’s scheduled a follow up procedure in June.
Can he expect to pay $1,500 or $2,000 of additional deductible resulting from the new claim?
Neither.
Since deductibles are almost always calendar year, Edward will only have to pay the additional $500, because of the plan design change. The same would be true even if his employer had switched insurers.
The general rule of thumb is, when moving from one group plan to another, regardless of when, you’ll get credit for calendar year deductibles satisfied year to date.
Extra credit question, albeit with a twist.
Assume the same plan designs, dates and claims but on April 1 Edward’s COBRA eligibility ended and he joined a new employer’s group plan.
Now what deductible would he incur?
