Like other adult things, choosing your first health insurance plan seems scary until you do it.
Lots of acronyms you never heard before? Check. You know it's going to hit your wallet? Check. It's some mysterious part of your job with a lot of brochures? Check.
When you're looking through your plan choices, ask yourself what's going on in your life, says Jeff Oldham, senior vice president of global and institutional markets at Benefitfocus, a benefits enrollment software company.
But first, learn the following words and acronyms. When you meet with the HR people at your company, you'll have a head start and the sheer bulk of information won't seem so daunting.
You'll need to know these terms so you can make informed decisions:
- Deductible: This is how much you have to pay before the employer and health-care company starts kicking in for your medical costs. But remember: Annual and preventive exams are free, even if you haven't reached your deductible, thanks to the Affordable Care Act.
- Premium: You'll see an amount deducted from each pay check. This money goes to the insurance company to pay for the health insurance policy. Your premiums do not pay for any medical care. It means you get a card from the company with your name and policy number.
- Copayment or copay: Most plans charge a fee when you see a doctor, and the cost is often on your insurance card. The health insurance company pays the balance.
- CDHP or HDHP: These two acronyms – consumer-driven health plan or high-deductible health plan – are often used interchangeably. Here's how these plans work: You must meet a high deductible of at least $1,350 — the government sets this bottom limit — before the health insurer starts kicking in for your bills. For people who are young and in relatively good health, this may not be much of an issue. Older people run the risk of delaying seeing a doctor or filling prescriptions if they feel financially squeezed.