Premiums – the basics

Answer: 
  • A premium is the dollar amount that is paid to a carrier for you to have insurance. If you receive your healthcare benefit through your work, your employer may pay a percentage of the premium, with the rest being deducted from your paycheck.
  • The amount you pay for a premium can vary, depending on how much coverage you will receive. If you have a high-deductible health plan, you may pay less for your premium. Offering a plan with a large deductible is an effective way for an insurance company to offer health insurance coverage at an affordable monthly rate. Although you will be responsible for all of the costs up to your deductible (except for preventive services), you need to review how much you may pay for co-insurance and co-pays to determine what your total liability might be. To help you cover these costs, you may have a few options: A Health Savings Account (HSA), a tax-free account that contains money regularly deducted from your paycheck, or a Flexible Spending Account (FSA), into which you contribute pre-tax earnings to pay for qualified health care costs.
  • Health and dental insurance for adults are typically provided through different plans -- often by different insurance companies -- so are paid for by separate premiums. Long-term care insurance, which provides financial assistance coverage for those who need help in performing basic tasks with daily living, is also sold separately from health insurance, requiring a separate premium.

Review your pay stub or contact your Human Resources department for more information.