Copayments: What You Need to Know

How do you know whether to collect a copayment from your client? And if you do need to collect a co-pay, when do you collect it? Let’s dive in!  

Whether or not your client is required to pay a co-pay, or a fixed amount that one pays for a covered healthcare service after the deductible has been met, is determined by the client’s health insurance plan. This underscores the importance of having Healthy Bytes conduct an eligibility estimate prior to your first visit with your client, so that you know whether a co-pay is required at the time of the visit.

The eligibility estimate may state that a co-pay is required at every visit, say, in the amount of $20 or $25, for example. The eligibility estimate will also outline what out-of-pocket maximum amount, if any, will be owed at the time of visit. Once you learn of your client’s requirement to pay a co-pay and/or an out-of-pocket expense, inform your client of payment expectations. Let them know, for example, that there will be a co-pay plus they are responsible for, say, 20 percent of the cost of the visit (if this is what you’ve learned from the eligibility estimate!). Have them sign an agreement that states they are responsible for any amount not covered by their insurance company.

Essentially, your client’s co-pay applies to their out-of-pocket maximum. Once the out-of-pocket max is met, then the patient is covered 100 percent, with no co-pay necessary. For example, the client may be required to pay a $25 co-pay at the time of service, which will apply to the member's $1,000 out-of-pocket maximum. Once that out-of-pocket maximum is met, the claim is paid at 100 percent, with no co-pay, for the rest of the benefit year.

Here’s an example scenario in which a client’s eligibility and benefits are explained.

Co-Pay Scenario: After your client’s deductible is met, he owes a $20 co-pay each visit, and the rest of the visit cost is covered by insurance. He has a deductible of $500, which has been met. His out-of-pocket max does not apply. There is no primary care physician referral required. The client has diagnosis restrictions for diabetes or obesity. He is allowed 12 dietary counseling visits per contract year.

What this means: Since this patient has met his deductible of $500 already, he just needs to pay $20 per visit; his insurance covers the rest. The co-pay should be collected up-front at the start of your visit with your client. He doesn't need to be referred by a PCP, but he's only covered for counseling if he's diagnosed with diabetes or obesity. He's only covered for 12 visits each plan year; after that, he needs to pay out of pocket for any services.

Read more eligibility estimate scenarios to get comfortable with co-pays and deductibles!