Health Insurance: What Should You Have in Place?
Health insurance is easier to use when you understand more than the name of the plan. Know what you pay each month, what you may pay when you need care, which doctors and facilities are in network, how prescriptions are covered and what happens if your job or household changes.
This page provides general educational and organizational information. Plan rules, costs, provider networks, enrollment periods and eligibility vary by plan and situation. Review the actual plan documents and current official guidance when making coverage decisions.
Know these seven things.
You should be able to find them without guessing.
- Your monthly premium
- Your deductible
- Your out-of-pocket maximum
- Your network rules
- Your prescription coverage
- Who is covered under the plan
- What happens when employment or eligibility changes
Know what the coverage actually requires from you.
A health insurance plan can involve several different costs and rules. The premium is only one part. Depending on the plan, you may also face a deductible, copayments, coinsurance and an annual out-of-pocket limit.
The practical goal is not to memorize every provision. It is to know where to find the important details before you need medical care.
Your plan's Summary of Benefits and Coverage can help you review major cost-sharing rules, covered services and other important plan details without relying only on an insurance card or memory.
Four numbers can tell you a lot about a health plan.
These terms are related, but they are not interchangeable. Review each one so you have a more realistic picture of what coverage may cost.
Premium
The amount paid for the health insurance coverage, often monthly. An employer may pay part of the premium.
Deductible
The amount you may have to pay for certain covered services before the plan begins paying according to its terms.
Copays & Coinsurance
Your share of costs for covered care may take the form of a fixed copayment or a percentage of the allowed cost.
Out-of-Pocket Maximum
A plan limit on certain covered in-network costs you pay during a plan year, subject to the plan's rules and exclusions.
A covered service can still cost very differently depending on where you receive it.
Health plans commonly use provider networks. Before non-emergency care, check whether the doctor, hospital, laboratory or other facility participates in your current plan.
Do not rely only on an old provider directory or what was true last year. Networks can change.
What to Confirm
- Your primary care doctor is in network
- Specialists you use are in network
- Your preferred hospital or facility participates
- Laboratories and imaging providers are covered appropriately
- You know how referrals work, if required
Before Scheduled Care
- Check the provider with the insurer
- Ask whether prior authorization may be required
- Confirm the facility as well as the physician
- Keep authorization or approval information when applicable
- Know who to contact if a claim is denied
A medication can be covered and still have different rules attached to it.
Prescription plans may use formularies, tiers, preferred pharmacies, prior authorization, quantity limits or other requirements. Review the plan before assuming that a prescription will be covered the same way from year to year.
Know your formulary.
A formulary is the plan's list of covered prescription drugs and may organize medications into different cost tiers.
If you take regular medications, review them when choosing or renewing coverage.
Know where to fill prescriptions.
Some plans use preferred pharmacy networks or mail-order options that may affect cost.
Keep your pharmacy information current in your broader health-readiness records.
If your coverage includes an HSA or FSA, understand the account separately from the insurance plan.
Health Savings Accounts and Flexible Spending Arrangements have different eligibility, contribution, ownership and spending rules. Do not assume they work the same way.
Health Savings Account — HSA
HSAs are generally associated with qualifying high-deductible health plans and are subject to federal eligibility and contribution rules.
Review who owns the account, how contributions are made, how funds may be used and what happens when employment changes.
Flexible Spending Arrangement — FSA
FSAs are generally employer-established arrangements that allow eligible health expenses to be paid with funds set aside under the plan's rules.
Review contribution limits, eligible expenses, deadlines and what happens to unused funds under your particular plan.
Employer health insurance is a benefit worth reviewing, not just enrolling in.
When coverage comes through an employer, keep track of both the health plan and the employment rules connected to it.
During Employment
Know the employee premium, employer contribution, deductible, network, prescription coverage and dependent cost.
Review plan changes during open enrollment rather than automatically choosing the same option each year.
Before Leaving a Job
Find out when active coverage ends and what continuation or replacement options may be available.
Save important benefit documents and contact information before access to an employee portal is removed.
Changing Jobs Checklist →Do not wait for a gap in coverage to start asking questions.
Losing job-based insurance or experiencing another qualifying change can create time-sensitive decisions. Know the available paths and deadlines that apply to your situation.
Certain workers and families may be able to temporarily continue qualifying employer-sponsored group health coverage after specific events, usually by paying more of the total premium.
Loss of qualifying coverage or certain household changes may create a Special Enrollment Period for Marketplace coverage.
Eligibility for public coverage programs depends on circumstances such as income, household composition, state rules and other factors.
Health insurance deserves another look when the household changes.
Getting Married
Review whose plan should cover whom, premiums, networks, deductibles and enrollment deadlines.
Having a Child
Review dependent enrollment, pediatric providers, prescription coverage and household costs.
Changing Jobs
Confirm when old coverage ends and when new employer coverage begins.
Retirement
Review the transition from employer coverage and how Medicare or other coverage fits your situation.
A quick yearly check can prevent a lot of confusion later.
Health plans can change from one plan year to the next. Review the pieces that affect how you actually use care instead of looking only at the monthly premium.
Review These Each Year
Connect your insurance coverage with the rest of your planning.
Health & Medical Readiness
Organize medications, doctors, pharmacy information, emergency contacts and important health records.
Review Health Readiness →Jobs & Benefits
Review workplace health coverage alongside retirement, disability insurance, paid leave and other employee benefits.
Review Job Benefits →Emergency Fund Planner
Estimate the essential monthly expenses your household may need to cover during a disruption.
Open Emergency Fund Planner →Use current official guidance when coverage rules matter.
Health insurance rules and options can change. These sources provide current federal information about coverage, continuation, enrollment and health accounts.
Federal information about Marketplace coverage, enrollment, Special Enrollment Periods and health-insurance terms.
Visit HealthCare.gov →Consumer information about employer health plans, COBRA continuation and employee benefit protections.
Visit EBSA →Federal tax information about Health Savings Accounts, Flexible Spending Arrangements and related health benefit rules.
Review IRS Publication 969 →Official Medicare information for people reviewing coverage around retirement or Medicare eligibility.
Visit Medicare.gov →Important terms are easier to use when you understand what they mean.
What is a health insurance deductible?
A deductible is an amount you may have to pay for certain covered services before the plan begins paying according to its rules. Some services may be covered before the deductible, depending on the plan.
What is an out-of-pocket maximum?
The out-of-pocket maximum is generally a limit on certain covered in-network costs you pay during a plan year. Premiums and some other expenses may not count toward that limit, so review your plan documents.
What happens to health insurance when I leave a job?
The answer depends on the employer plan and your circumstances. Options may include coverage through a new employer, COBRA continuation, Marketplace coverage or another qualifying program. Because deadlines can apply, review options before existing coverage ends when possible.
What is the difference between an HSA and an FSA?
An HSA and an FSA are different types of health-related spending arrangements with different eligibility, ownership, contribution and carryover rules. Review the rules that apply to your specific account.
Should I check my doctors every year?
It is a good idea to confirm that important doctors, hospitals and other providers still participate in your plan, especially during enrollment or before scheduled care. Provider networks can change.
Find your current plan summary and review the numbers that matter.
Start with your premium, deductible, out-of-pocket maximum, provider network and prescription coverage. Once those are clear, you have a much better picture of what your health insurance actually does for you.