A fee-for-service plan allows the employee to choose his or her own physician. The employee typically pays for the medical care and then files a claim form with the insurance company for reimbursement.
Deductibles and coinsurance are also usually part of this kind of insurance. A deductible is a fixed amount of medical expenses an employee needs to pay before the insurance plan reimburses. The deductible can range from $100 to $1,000 a year.
Coinsurance is a percentage of medical expenses the employee pays, with the plan paying the remaining portion. A typical coinsurance amount is 20 percent, with the plan paying 80 percent of approved medical expenses.
Listed below are the most common types of fee-for-service insurance arrangements providing health care to groups of employees.
A basic health insurance plan, covering hospitalization, surgery and physicians' care in the hospital.
A major medical insurance plan, usually supplementing a basic plan by reimbursing charges not paid by that plan.
A comprehensive plan, covering both hospital and medical care with one common deductible and coinsurance feature.
