Copayment

HR Glossary for HR Professionals

Glossary of the most common HR terms and acronyms to assist professionals navigating the ever-growing and ever-changing world of HR terminology.

Copayment

What is a Copayment?

Copayments, or copays, are features of health insurance plans. More specifically, insurance carriers define them as an exact amount that healthcare beneficiaries pay for each medical service that the policy covers. But, following the copay, the insurance company steps in and pays the remaining balance.

Copays tend to vary for different services within the same plan. For instance, they depend on whether the service is essential or routine versus others that are less routine.

Additionally, copays tend to be lower for standard doctor visits versus a specialist visit. 

What services have an insurance copayment?

Meanwhile, health insurance copayments vary based on the policy and the provider. For instance, they’re most common for: 

  • Primary care physician office visits
  • Specialist office visits
  • Prescriptions
  • Physical therapy
  • Occupational therapy
  • Speech therapy
  • Mental health visits
  • ER services or ambulance 

It’s more common to see copays with in-network services. This means you must pick a provider from the insurance company’s network list. On the other hand, if you go out-of-network, the copayment may not apply and you may be required to pay the full amount of the bill, or a coinsurance percentage. 

How do out-of-pocket maximums affect copayments?

For example, if your policy has a $5,000 out-of-pocket maximum, once your contributions reach that amount, you stop paying the copayment for the rest of the plan year for covered services. 

Related Terms: Health Insurance, PPO

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