By Jane Kopecky, CEBS CMS RPA RHU REBC CSA
On your BCBSIL quotes, you will see the terms “Combined” and “Embedded”. You may have also heard your Resource Brokerage marketing rep use the term “Aggregate”. We do find that several brokers struggle with understanding these terms and concepts. If you are among them, know you are not alone! This is a concept I work with brokers to explain daily!
First of all, it is important to understand that BlueEdge plans all have aggregate family deductibles. This means that there is a common family deductible. All insureds’ charges in a family contribute to the family aggregate deductible. For example, if you choose a BlueEdge plan with a $2,500 deductible, the family aggregate is $5,000. If you are covering a family of 4, each insured’s deductible eligible charges go toward filling the $5,000 family deductible bucket. See Figure 1 below.
Notice that Insured 1 had $3,200 of charges that went in to the family deductible bucket—exceeding the plan’s $2,500 deductible applicable when there is single coverage. Since the family deductible had not been met, all $3,200 goes into the family $5,000 bucket. Not until the 4th claimant (Insured 4 in this example) puts the last $400 of charges attributed to the deductible in the bucket is the family deductible met. Once the family aggregate deductible is met, everyone’s charges are covered at the applicable plan’s coinsurance. Even if one family member is incurring covered charges, claims do not begin to be paid at the plan’s applicable coinsurance until the family deductible is met.
Some BlueEdge plans have embedded deductibles. This means that when any one member in a family accumulates charges equal to the INDIVIDUAL deductible level, that insured is going to have his additional charges covered at the plan’s applicable coinsurance. See Figure 2 below and presume this is the same family illustrated earlier—but with an EMBEDDED deductible.
When insured 1 incurs his $3,200 claim, $2,500 of that will satisfy the embedded deductible for him, the remaining $700 of charges will be covered at coinsurance as will his remaining charges for that calendar year. Assuming the other insureds in the family have the same charges as they did in Figure 1, their charges also contribute to the family aggregate deductible but in this example, the family aggregate deductible is not yet met due to insured 1’s charges going to coinsurance sooner. Remember too that IRS guidelines do not allow embedded deductibles of less than $2,250 so you will only see embedded plans with deductibles of $2,250 or higher.
You also will see deductibles on your BlueEdge quotes referred to as combined deductibles. This means that in- and out-of-network covered charges BOTH contribute to the calendar year deductible—one bucket for covered charges incurred both in- and out-of-network. See Figure 3 below.
Where your BlueEdge quotes show two deductibles—such as $2,500/$5,000 (in/out)—this means that the covered charges of in- and out-of-network providers are filling SEPARATE buckets. Remember that the deductibles on the quote are per individual, and all BlueEdge plans have a family aggregate deductible amount of two times the individual. See Figure 4 for an illustration of how an in- and out-of-network deductible plan works.
Still confused? Don’t be afraid to contact me to discuss. Remember—I am also available to accompany you to your larger (15+ covered employees for medical) group presentations to present BlueEdge or any other products we represent to your clients.