Therapy & Counseling Insurance Basics

by Dorothy Lehman

Health care can be complex, and for many of us, understanding health insurance coverage can be overwhelming. Between coinsurances and copays, deductibles, networks and health savings accounts, it seems designed to be confusing! Let’s see if we can navigate through some of these terms and help clear up some of the questions.

Insurance card. This is most important piece of information needed for billing purposes. Often, insurances will have a special network to handle mental health claims, and that information is found on the back of the card, along with the contact information needed for obtaining benefits and authorization, as well as where to send the claims. Missing some of this information can slow down claim processing and delay payment.
Managed Care. More than half of all insured Americans are enrolled in a managed care plan. Managed care plans have contracts with providers and your costs are usually lower if you use these network providers.
Behavioral Health Network: Often there is a different network used to manage mental health services, and there may be different deductibles, co-insurance and co-pays for mental health services.

Deductible: This is the amount an individual pays before insurance will begin paying benefits. Deductibles may be as low as $100 on up to several thousand dollars. Deductibles usually are for each calendar year, so with the beginning of a new year, the deductible amount reactivates. Deductibles may be different for various kinds of medical care. For example, you may have no deductible or a very low deductible for office visits to physicians, similarly, you may have a higher deductible if your provider is out of network.

Co-insurance. This is a percentage of the medical expenses you may have to pay after the deductible has been met. A typical coinsurance arrangement is 80 percent by the insurer and 20 percent by the insured. Coinsurance rates may vary depending on the types of services you receive or whether or not you receive services from an approved provider.

Co-payment. This is a fixed dollar amount you may have to pay at the time of service. Some plans require that a deductible first be met before a co-payment applies.

Cost-sharing. This is financial contribution that allows you to set aside money for health care services before you pay income taxes on it. As long as that money is only used for “qualifying expenses”, such as deductibles, co-insurance and co-pays, then you will never pay income tax on that money. If you expect to incur medical expenses not reimbursed by your current health insurance, you should definitely think about participating in an FSA or HSA if one is offered.

Let’s look at the two most common types: Flexible Spending Accounts (FSA) and Health Savings Accounts (HSA).

Flexible Spending Accounts (FSA). An FSA is a spending account set up by employers to allow you to set aside pre-tax money to pay for qualified medical expenses during the year. Only employers may set up an account. Each year, you determine the amount of money you want deducted from your paycheck and put into this account. The key to an FSA is that it is “use-it or lose-it”. The money you set aside in one year must be spent in that year, or it will be forfeited, so you have to carefully anticipate your health care expenses for the coming year to avoid losing any money that you contribute and don’t spend.

Health Savings Accounts (HSA). An HSA is a savings account, not a spending account, which means that you may save that money until you need it, even if you don’t need it until many years later. Deposits to the account may come directly from your paycheck, your employer may make deposits to the account, or you may make deposits on your own. The major benefit to an HSA is the fact that the money is always yours to keep or use. It does not go away at the end of the year. And it is also portable. If you leave your employer, the HSA is yours; you take it with you.
Only those who have a high-deductible health insurance plan may set up an HSA in order to take advantage of the tax benefit. The rules about how high that deductible must be, and how much can be saved, vary from year to year.

Dorothy Lehman is the billing specialist at Kettle Moraine Counseling and the clinic director couldn’t get by without her! If you have questions or concerns about your insurance, don’t hesitate to call Dorothy at 262.388.9425, or She can check your benefits before you begin services so that you know what the expense will be.