Getting Prepared for Client Affordable Care Questions


As tax season nears, your clients will begin to look to you as a source about the Affordable Care Act. In addition to being knowledgeable about how having insurance or not having insurance will affect their tax returns, it is also a good idea to learn some insurance key terms. This may help you explain the various aspects involved in choosing an insurance plan in addition to providing helpful tax advice.

 



Deductible

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The amount you owe for health care services your health insurance or plan covers before your health insurance or plan begins to pay. For example, if your deductible is $1,000, your plan won’t pay anything until you’ve met your $1,000 deductible for covered health care services subject to the deductible. The deductible may not apply to all services.

 



Out-of-Pocket Maximum

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The most you pay during a policy period (usually a year) before your health insurance or plan begins to pay 100% of the allowed amount. This limit never includes your premium, balance-billed charges, or health care your health insurance or plan doesn’t cover. Some health insurance or plans don’t count your copayments, deductibles, coinsurance payments, out-of-network payments, or other expenses toward this limit. In Medicaid and CHIP, the limit includes premiums.

 



Copayments

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A fixed amount (for example, $15) you pay for a covered health care service, usually when you get the service. The amount can vary by the type of covered health care service.

 



Coinsurance

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Your share of the costs of a covered health care service, calculated as a percent (for example, 20%) of the allowed amount for the service. You pay coinsurance plus any deductibles you owe. For example, if the health insurance or plan’s allowed amount for an office visit is $100 and you’ve met your deductible, your coinsurance payment of 20% would be $20. The health insurance or plan pays the rest of the allowed amount.