Whether you’re researching your region’s health plan or trying to understand your workplace health insurance forms, it can seem like they’re written in a different language. Here are some key terms and concepts to help you make sense of it.
A formulary is the list of prescription medications or products that are covered under an insurance plan. The federal, provincial and territorial governments participate together in a process called the Common Drug Review. An expert committee evaluates new drugs and gives evidence-based recommendations about which should be covered by public drug benefit plans. Often private insurance plans base their formularies on the public plan formulary in their jurisdiction.
When a drug is first introduced, it is usually patented by the drug company that developed it. This means that for a period of time, only they can manufacture and sell it.
When the patent expires, other companies can produce generic versions of the drug. Generic versions of a drug contain the same active ingredients as the brand name drug, but typically cost less. Many benefit plans (public and private) require the pharmacist to provide you with the least expensive version of the drug, regardless of what was written on your prescription.
There can sometimes be differences between the name brand and generic versions of drugs. If the generic product has not worked for you, your physician can indicate “no substitution” on your prescription. The difference in cost may be covered by your plan, or you may be required to pay for it yourself. Sometimes an insurance company will require your doctor to present medical evidence as to why you require the non-generic version of a drug.
The payment made by an insurance company after approving a claim.
A formal request to the insurance company for payment of a benefit.
An arrangement in a health insurance plan where you and the insurance company share the cost of the items covered. You usually pay a set percentage (for example, 20 per cent) and the remainder (80 per cent) is paid by the insurance plan.
Co-payment or Co-pay
A predetermined fee a plan member pays for healthcare services. This amount is usually a flat fee.
The amount that plan members have to pay before the insurance kicks in. For example, you might have an annual $500 deductible, meaning you cover the first $500 for health services before your insurance company begins to pay. There may also be a set deductible for each prescription drug.
A fee paid to the insurance company or health plan to provide insurance coverage. Depending on your type of plan, this may be paid, all or in part, by a third party such as your employer.
Plan Member Payments
Additional costs that you, the plan member, may have to pay. If you are part of a health insurance plan, whether public, private or individual, there are likely additional costs you'll have to pay when you make a claim or seek reimbursement for a benefit.