Co-Insurance: HSA Eligibility

What is co-insurance?

The term co-insurance refers to a type of health insurance plan structure that centers around an account holder's deductible and future spending. A plan's deductible refers to the amount of money that an individual has to spend out-of-pocket annually before an insurance company begins to cover medical expenses. While most insurance plans will cover standard expenses, such as routine doctor visits, prescription drugs and standard forms of preventive care, most of these expenses will have to be covered by the account holder until their plan's deductible is exhausted (Healthcare.gov).

Some insurance plans include a co-insurance provision in their overall plan structure that requires the insurance company and the account holder to split the costs of a health plan service after meeting his/her deductible. For instance, if an individual's insurance plan offers a 70/30 split for medical expenses after the deductible is met, this would mean that an expenditure of $150 would mean that the insurance company would pay $105, while the account holder would pay $45.

Additionally, some co-insurance payments apply to the account holder's network choices. For instance, if he/she opts to visit a physician who is outside of the plan network, some co-insurance provisions will require a larger cost-sharing split. Last but not least, co-insurance payments can also refer to the difference between an in-network (which is covered by the plan) and out-of-network service, which the account holder will cover for going outside of the insurance plan umbrella of coverage. As opposed to co-payment insurance plans that require payment for medical services at the time it is rendered, co-insurance is billed regularly as expenditures are made.