When the employer buys an insurance policy, he has to pay the premium. This is how copay in health insurance works. But still, Tia has to pay the 20% of her bill as her group health insurance plan comes with a copayment clause. In the above scenario, the sum insured is 5 lakhs and the bills have not crossed the sum insured. While the insurance company covers the rest of the bill amount, which is Rs.40,000. In this case, she pays 20% of 50,000 which is Rs.10,000 from her hands. She goes for treatment at a network hospital and the bills add up to Rs. Understanding copay in group health insurance for employees gets better with an example.įor instance, let us consider Tia has a group health insurance plan with 20% copay and the sum insured is 5 lakhs. Examples of health insurance copay and how copayment works? Insurers quote a lesser premium when there’s a copayment in claims. This is done to reduce the financial burden that falls on the employer when buying group health insurance.

It is a copayment when two parties share the premium or claim amount.

While the others have a copayment clause as an option that the policyholder opts for according to their needs. A few group health insurance policy come with mandatory copayment options. However, this copayment option is not mandatory. If two insurance companies cover a particular risk in an agreed ratio it is called a coinsurance arrangement.Copay or copayment in a group health insurance plan refers to the percentage of the health insurance claim amount on the medical bills that the policyholder has to pay on their own, while the insurance company settles the rest of the claim amount. Further explanation: From an underwriting perspective, Coinsurance is defined as a relationship between two insurance companies. 8,600, will have to be paid by you and the remaining Rs. So, once the Deductible is paid, the sum will come down to Rs. 7,000 as Deductible and 10% as Coinsurance. Example: Let’s say you are availing of medical treatment amounting to Rs. However, this clause usually comes into play only after Deductible has been paid. In this case too, the remainder amount will be borne by the insurer. Similar to Copay, Coinsurance is a fixed percentage of the medical bill that needs to be paid from the side of the insured. Here, the base cover sum insured is referred as deductible. Here, the top-up sum insured triggers once the base sum insured is exhausted. A top-up cover is sold on top of the base cover sum insured.

First, a Base Cover Deductible, where a fixed amount is payable by the insured out of the total medical bill.

Further explanation: Usually, there are two types of deductibles. 43,000 will be contributed by your health insurer. 7,000 is the defined Deductible sum as per your policy. Example: Let’s say you are availing of medical treatment worth Rs. Once this sum runs out, the insurer will start pitching in and cover medical expenses (up to the sum insured). 45,000.ĭeductible refers to a fixed sum payable by the insured towards medical expenses. 5,000 from your pocket and your insurer will settle the remaining Rs. Alternatively, under the same circumstance, the Copay clause may require you to bear 10% of the treatment costs instead of a fixed amount. Then, you will have to pay Rs.10,000 from your pocket and the remaining Rs. 10,000 is the amount defined under the Copay clause of your policy. The remaining amount will be settled by the insurer. Copay also known as Copayment in health insurance refers to a fixed amount or percentage of an approved medical bill that needs to be paid by the insured.

Copay meaning