What are the price variables in a group health insurance plan?

A group health insurance plan has five primary elements:

  • Premium: the basic fee charged by an insurer to provide coverage (typically, an employer and employee share in this cost).
  • Deductible: the amount an employee must pay before the insurer starts to cover costs (generally, the higher the premium, the lower the deductible).
  • Co-insurance level: the percent (typically 50% to 100%) of the cost of covered services that the insurer pays for (after the employee pays the deductible).
  • Copayment: a fixed dollar amount an employee must pay after receiving a covered service (in many cases, this is the only cost the employee will pay).
  • Out-of-pocket (OOP) limit: the maximum annual amount an employee would have to pay for healthcare (generally, the higher the premium, the lower the out-of-pocket limit).