Health Insurance Definitions


Find definitions to common health insurance terms below or visit our Health Insurance FAQ's to learn more.

What is a deductible?
A deductible is a specific dollar amount you pay each benefit period before your health insurance plan begins to pay for covered services. 
What is coinsurance?
Coinsurance is the percentage of charges to be paid by you for covered services, after the deductible has been satisfied. 
What is a copay?
A copay is a form of medical or pharmacy cost sharing in a health insurance plan that requires an insured person to pay a fixed dollar amount when a medical or pharmacy service is received. The insurer (meaning the carrier) is responsible for the rest of the reimbursement for the medical or pharmacy services. 
What is a premium?
A premium is an agreed upon fee paid for coverage of medical benefits for a defined benefit period and is a part of your health insurance plan. 
What is a Provider Network?
A provider network helps answer the question "What doctors can I see?"

To ensure you are receiving in-network benefit coverage, you are required to use the Sanford Health Plan network. The network consists of nearly 15,000 providers in SD, MN, IA, NE and ND.  NOTE:  If you choose to go to a non-participating provider when in network access is available, your claims will be paid according to your out-of-network benefits.

What if there aren’t participating Sanford Health Plan providers in my residential area?
Sanford Health Plan has contracted with other networks for those members who  reside, travel or attend school outside the Sanford Health Plan service area.  If you have an additional network listed on your identification card, you may seek medical care from a provider that is participating with the  additional network.  If these additional networks do not provide you with access to a needed provider, the Sanford Health Plan Access and Availability rules will apply.  Please refer to your Policy for details. 
What is an Ancillary?
An Ancillary service is a supplemental healthcare service such as laboratory work, x-rays or physical therapy that are provided in conjunction with medical or hospital care. 

An Ancillary fee is an extra fee often associated with obtaining prescription drugs which are not listed on your health insurance plan’s formulary.
What is included in my out-of-pocket maximum?

The total amount of your deductible plus coinsurance and copayment amounts is how you accumulate to reach your maximum out-of-pocket. However, there are differences in this based on the current status of your plan:

If your plan is grandfathered or non-grandfathered transitional, then the office visit, emergency room, and pharmacy copays do NOT apply towards your out-of-pocket maximum

If your plan is an ACA-compliant plan, in-network office visit, emergency room and pharmacy copays DO apply towards your out-of-pocket maximum.

How does my deductible and coinsurance work?
Example:  Let’s say you have incurred an eligible claim for $3,000 and your plan has a $1,000 deductible with 80/20 coinsurance:  
•    $1,000 = deductible paid by you
•    $1,600 = paid by health insurance plan (80% of the remaining $2,000)
•    $400 = paid by you (20% of the remaining $2,000)

Your responsibility = $1,400     
Health insurance plan responsibility = $1,600.

Copayments do not apply towards the deductible.