Understanding your health plan summary of benefits and coverage

Let’s walk through how to understand your health plan summary of benefits and coverage, so you can know what a plan covers and what the terms mean.

We suggest opening up a Summary of Benefits and Coverage sheet. The Summary of Benefits and Coverage PDF can be found near the bottom of the details section of any plan you are looking at online. Just view plan info, and then expand the details section. By following along, the information on this page will make more sense.


Standardized Benefits Sheets

Under the ACA benefits and coverage sheets are standardized. This makes discussing them easy and makes comparing plans easier too. Most sheets look the same, others change the way information is presented slightly. However, the basics of all information will be the same. Cost sharing reduction is reflected in your summary by your insurer repeating the summary with slight changes for each cost sharing or assistance level.

What You Won’t Find in the Benefits Summary

The benefits summary does not contain networks and other specifics. You can refer to the insurers website for more detailed information about what medical providers are covered under the plan and what drugs are covered. You can also always call the insurer in question for more information.

Plan Brochure

A Health plan brochure is different than a benefits sheet. They are not standardized like benefits sheets, but do include much of the same information (and typically other plans that provider offers). You should check out both before you enroll in a plan, but use benefits summary sheets to compare plans. There is no specific need to read the brochure for basic comparisons of plans.

What Does the Health Plan Summary Mean?

At the top each summary section you will see the name of your Provider, the coverage period (policy period), a statement that this is a “Summary of Benefits and Coverage: What this Plan Covers & What it Costs, who the plan is for (Individual/Family or other), and the Plan type (HMO or PPO typically).

The Questions and Answers Section

In the summary itself it will have a list of important questions and answers, and then a description of why it matters. Let’s review each of the typically QA sections here.

What is the Overall Deductible? This is the amount you have to pay before coinsurance kicks in. It differs based on assistance level.

Are there other deductibles for specific services? Some plans have specific deductibles for specific services. Some plans cover all covered services under one deductible.

Is there an out-of-pocket limit on expenses? This is your out-of-pocket maximum. The most you can pay in covered costs before your plan pays 100%. There is always a limit.

What is not included in the out-of-pocket limit? The answer is typically Premiums, balance-billed charges, and out-of-network service this plan doesn’t cover. Some plans have specific out-of-network maximums.

Is there an overall annual limit on what the plan pays? The ACA makes dollar limits on essential care illegal. So the answer will be no on all Major Medical.

Does this plan use a network of providers? Most plans use a network of providers, you must seek coverage in-network for those costs to be covered.  Be aware, your in-network doctor or hospital may use an out of network provider for some services. Plans use the term in-network, preferred, or participating for providers in their networks. Know who is in network, and know cost sharing amounts. Only higher cost plans tend to provide maximum limits out-of-network.

Do I need a referral from a specialist? HMO’s typically need referrals while PPO’s don’t. However you’ll always want to check the benefits sheet to understand what referrals are needed. Referrals are directly connected to networks.

Are there services this plan doesn’t cover? Almost every plan is going to have excluded services. Know what these are before starting your plan.

Services and Limitations

First this page describes cost sharing and jargon like this:

Copayments are fixed dollar amounts (for example,$15) you pay for covered healthcare, usually when you receive the service.

Coinsurance is your share of the costs of a covered service, calculated as a percent of the allowed amount for the service. For example,if the plan’s allowed amount for an overnight hospital stay is $1,000, your coinsurance payment of 20% would be $200. This may change if you haven’t met your deductible.

The amount the plan pays for covered services is based on the allowed amount. If an out-of-network provider charges more than the allowed amount, you may have to pay the difference. For example, if an out-of-network hospital charges $1,500 for an overnight stay and the allowed amount is $1,000, you may have to pay the $500 difference. (This is called balance billing.)

A plan may encourage you to use in-network providers by charging you lower deductibles, copayments and coinsurance amounts.

It should also include a description of out-of-pocket maximum. Once you reach your maximum the plan covers 100% of covered in-network services.

Next the page describes common medical events, services you may need, your costs in and out-of-network, and limitations and exceptions.

This will give you an idea of how cost sharing would work in real life, why it’s important to get services in-network, and if approval is needed for that plan. Make sure to understand what is subject to deductibles, what isn’t, and if approval will be needed in emergencies.

Excluded Services & Other Covered Services

Your plan will list services that your plan doesn’t cover and some services that weren’t discussed in the above section. Examples can be found below, however some plans will cover any of the commonly excluded services found below:

Services your plan does NOT cover:

  • Bariatric surgery
  • Infertility treatment
  • Private-duty nursing
  • Cosmetic surgery
  • Long-term care
  • Routine eye care (Adult)
  • Dental care
  • Non-emergency care when traveling outside the U. S.
  • Weight loss programs

Other Covered Services:



  • Abortion services of which Federal funds are prohibited
  • Hearing aids (Coverage for cochlear implants only)
  • Acupuncture
  • Routine foot care (For diabetes treatment)
  • Chiropractic care

NOTE: If you need a service like dental or non-emergency outside of the US it’s important to find a plan that includes this as covered service.

Your Rights to Continue Coverage, Rights to Appeal, Minimum Essential Coverage, Minimum Value, and More

The next section of your summary includes information on your benefits, rights, and protections under the ACA and includes confirmation that it meets minimum value and coverage rules.

Examples of How Your Plan Might Cover Costs

The second to last section includes examples of how coverage of costs might work. This will give an example that includes cost sharing for your plan, what you pay, what your insurer pays, and what is generally owed.

Know the Law – Summary of Benefits and Explanation of Coverage

Standardized summaries of benefits are set forth by TITLE I—QUALITY, AFFORDABLE HEALTH CARE FOR ALL AMERICANS. Subtitle A—Immediate Improvements in Health Care Coverage for All Americans. Below is a summary of that section.

Sec. 2715. Development and utilization of uniform explanation of coverage documents and standardized definitions. Requires the Secretary to develop standards for use by health insurers in compiling and providing an accurate summary of benefits and explanation of coverage. The standards must be in a uniform format, using language that is easily understood by the average enrollee, and must include uniform definitions of standard insurance and medical terms. The explanation must also describe any cost-sharing, exceptions, reductions, and limitations on coverage, and examples to illustrate common benefits scenarios.

Need help? Just contact jp@northwestbenefitssolutions.com,  or visit our web site. NorthWest Benefits Solutions.

James Parsley owner -manager









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