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Health & Welfare and Pension Funds of Philadelphia and Vicinity

Blog Post

Understanding Your Healthcare Costs

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There are various charges you are responsible for as a plan participant. They go by different names such as “copayment,” “coinsurance,” and “deductible.”   We occasionally find that Fund participants do not really understand what these terms mean. That is a shame because understanding what these terms mean is the first step in understanding your benefits, whether you have been billed for them correctly, and the true value of them.

The following is a list a commonly used terms that describe the types of charges each Fund participant is responsible for:

  • Copayments are fixed dollar amounts (for example, $15) you pay for covered health care, usually when you receive the service;
  • The deductible is the amount you are responsible for paying for any service to which a copayment does not apply before the Fund begins paying for your healthcare;
  • Coinsurance is your share of the costs of a covered service, calculated as a percent of the allowed amount for the service (e.g., if the Fund’s allowed amount for an overnight hospital stay is $1,000, your coinsurance payment of 10% would be $100). You do not pay coinsurance until after you have already met your deductible; and
  • The out-of-pocket limit is the maximum amount of money you are required to contribute to your healthcare in a given year, excluding copayments.

The amount the plan pays for covered services is based on the allowed amount. If an out-of-network provider charges more than the allowed amount, you may have to pay the difference. For example, if an out-of-network hospital charges $1,500 for an overnight stay and the allowed amount is $1,000, you may have to pay the $500 difference. (This is called balance billing.) In-network providers accept the Fund’s allowed amount as payment in full and cannot engage in balance billing.  There is no coverage for out-of-network providers in the HMO program.

The amount each participant pays in copayments, deductibles, coinsurance, and the out-of-pocket limit varies depending on whether the participant is enrolled in the HMO or PPO program. Additional information regarding each of these terms is available the plan documents for the HMO and PPO programs as well as in the Summary of Benefits and Coverage that is mailed out with enrollment packets and during open enrollment.