Healthcare is going to cost whether as a business owner or a regular employee. Here is a breakdown of how health insurance costs are shared:
Depending on the agreement between the employer and employee, the healthcare insurance costs can be split through various payments and saving plans.
Out-of-Pocket Costs by Employees
- Deductible: refers to the number of healthcare services that will be paid for by the employee before the insurer reimburses. For example, when an employee has a $1000 yearly deductible, he must pay for that amount of medical services before the insurer covers the remaining cost.
- Co-payment: refers to the amount employees directly pay to a healthcare provider at the time of service. However, not all services or plans require co-pays.
- Coinsurance: refers to the fraction an employee needs to pay after their deductible. For example, if the plan has 30% coinsurance, then the employee will pay for 30% and the insurance company for the other 70%.
Costs Employer and Employees Share
- Premiums: refer to the payments made by the employee at regular intervals, such as monthly or quarterly. With this, both the employer and employee share the amount to be paid to health insurance. But, employers often pay a larger share as a benefit.
- Health savings account: this is a tax-free savings account that can be utilized for future medical expenses. The account can be paired with high deductible insurance plans and does not need to be used within a year. Employers may pay a portion of this savings, or employees can pay for it on their own.
- Flexible spending accounts: these are pre-tax accounts provided for healthcare costs not covered by health insurance. These accounts include co-pays and deductibles. The funds are put aside by the employer for use by the employee by the end of the year. The amount that will not be used will be sent back to the employer.
At Roper Insurance Services, we put our clients first by offering them policies that they can afford. Having insurance is a necessity nowadays and we're here to help you out. Learn more about our products and services by calling our agency at (828) 697-6709. You can also request a free quote by CLICKING HERE.