You want employees to understand their benefits so they use them, but there are a lot of unfamiliar terms that come up in benefits. One such term is out of pocket maximum.
Here’s what your employees need to know about this term and why it matters for improving enrollment rates.
Out of pocket maximum
The term “out of pocket maximum” or “out of pocket limit” is defined by Healthcare.gov as: “The most you have to pay for covered services in a plan year. After you spend this amount on deductibles, copayments, and coinsurance for in-network care and services, your health plan pays 100% of the costs of covered benefits.”
So if the out of pocket limit is reached by paying for deductibles, copays and coinsurance (from an in-network provider), then what doesn’t count toward the limit?
What doesn’t count toward the maximum out of pocket?
It’s equally important for employees to know what doesn’t count toward an out of pocket maximum. Some of the most common items that don’t go toward the out of pocket maximum include:
- Care and services that aren’t covered by insurance
- Care and services from an out-of-network provider
- Plan premiums
- Preventive care (in most cases)
So now you know what to tell your employees when they ask about out of pocket maximums.
But why does it matter to enrollment rates?
Why it matters for enrollment rates
Reports show that employees feel like employers don’t serve as a resource when it comes to health-related questions. When your employees don’t understand their benefits, they are less likely to enroll.
Check out our other blogs on how participants can save money on out of pocket expenses: