Navigating the health-insurance maze is a little easier if you understand the terminology. Here’s a guide to most of the important terms you’ll need to know as a small business owner:
Blue Cross and Blue Shield Association : The national trade organization that links 38 independent regional health insurance companies in the United States. Some of the BCBS companies are not-for-profit. The association operates through a series of administratively independent franchises offering insurance plans within defined regions.
Catastrophic health insurance : It protects you against the high cost of treating severe injury or long illness. These policies usually cover some, if not all, of your medical expenses above the maximum liability limit of another insurance policy.
Co-pay : This is your out-of-pocket cost per doctor visit under the terms of your policy, often $5 to $25 for each visit.
Co-insurance : Ever hear of an 80/20 or 50/50 policy? It’s a policy with a “co-insurance” provision, and is typically less expensive than other policies.
Essentially, you pay an annual deductible, then your insurance company pays a percentage of your expenses after that (e.g. 80 percent in an 80/20 policy). You pay the difference (20 percent in an 80/20 policy). This type of policy also has a lifetime maximum, which limits the amount the insurance company pays toward health-care expenses in your lifetime.
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