It could be that you’re starting your first job that offers health insurance benefits or perhaps you’re no longer eligible under your parents’ plan and need to get one of your own. Either way, understanding health benefit terms and how your plan works is important.
But let’s be honest – some of the jargon used in health benefit plans can be confusing whether you’re new to the process or you’ve had health benefits for many years. In this article, we’ll break down some common health insurance terms you’ll come across, explain what they mean and how they affect you in everyday situations.
Special authorization
Some medications require extra approval before your insurance will cover them. This process, called special authorization, ensures that these drugs are used appropriately and only when necessary. It’s like getting permission to use a specialized tool for a specific job—your doctor needs to explain why this particular medication is the best choice for your situation.
For example, your doctor might prescribe a new, expensive medication to treat your condition. Before your insurance plan agrees to cover it, they may ask your doctor to fill out a form explaining why this drug is necessary instead of other, more affordable options. This could include details on why other treatments haven’t worked or why they aren’t suitable for you. The insurance company reviews this information to decide if the medication meets their criteria for coverage.
While it might seem like an extra step, special authorization helps ensure that high-cost medications are used responsibly and that you’re getting the treatment best suited to your needs. Once approved, you’ll be able to access the medication under your plan’s coverage, saving you from paying the full cost out of pocket. It’s always a good idea to talk with your doctor and health benefits provider if you have questions about this process.
Extended health coverage vs. AHCIP
The Alberta Health Care Insurance Plan (AHCIP) provides basic health care coverage for all Albertans, including doctor visits, hospital stays and surgeries. While it’s a great foundation, AHCIP doesn’t cover everything. That’s where extended health coverage comes in—this is additional insurance you can purchase to help pay for services that AHCIP doesn’t include, such as dental care, prescription glasses or physiotherapy.
For example, if you break your arm and go to the hospital, AHCIP will cover your emergency care and doctor visits. But if you need follow-up physiotherapy sessions to recover, AHCIP won’t cover those costs. If you have extended health coverage—whether through work or a personal plan—it can help pay for those sessions and reduce your out-of-pocket expenses.
Extended health coverage also offers access to other valuable services like paramedical practitioners (e.g., chiropractors and massage therapists), prescription drugs and even travel insurance. By combining AHCIP with extended health coverage, you can protect yourself from unexpected costs and ensure you have access to the care you need when life happens.
Step therapy
Step therapy is a way to balance cost and care by making sure more affordable medicines are tried first. If those don’t work, your doctor can move you on to more expensive treatments. This process helps keep healthcare costs down while still giving you access to the medications you need when necessary.
For example, if you’re diagnosed with a condition like depression, your insurance plan might ask you to try two commonly prescribed medications first. These are often generic or lower-cost options that work well for many people. If these treatments don’t work for you or cause side effects, your doctor can request coverage for a newer, more expensive medication by explaining why it’s medically necessary.
If you’re not sure how step therapy works or are worried it might delay getting the right medication, talk to your doctor or health benefits provider. They can explain the steps, guide you through the process and help make sure you get the treatment that’s best for you.
Explanation of Benefits (EOB)
An Explanation of Benefits, or EOB, is a document you receive after submitting a claim to your health benefits provider. It outlines what services were covered, how much was paid under your coverage and what portion (if any) you’re responsible for paying. Think of it as a detailed receipt for your healthcare—it doesn’t mean you owe money but helps you understand how your claim was processed.
For instance, if you visit a chiropractor and the session costs $60, you might submit this expense to your benefits plan. A week later, you receive an EOB that breaks down the details: your insurance paid $40, and you’re responsible for the remaining $20.
EOBs are important because they show you exactly how your benefits are being used and help you track your spending. They also give you a chance to review claims to make sure they’re correct—if something doesn’t look right, like a service you didn’t receive is listed, you can contact your benefits provider to fix it. Keeping these documents organized can help you stay on top of your benefits and avoid unexpected costs.
Medical underwriting
Medical underwriting is the process health benefits and insurance providers use to review your medical history. They use this information to determine your coverage options and premiums. This includes looking at any pre-existing conditions, treatments or medications to understand your health needs. It helps benefits providers create plans that are fair for both you and the company.
Let’s say you’re applying for a personal health benefits plan. During the application process, you fill out a health questionnaire and disclose that you’ve recently been treated for asthma. The insurance company might ask for more details about your condition. For instance, they might ask how you’re managing your condition or if you’ve had any hospital visits related to it. The insurer would use this information to determine whether or not they can cover you for this condition and what (if any) exclusions there might be. Understanding how medical underwriting works can help you provide accurate information and choose a plan that best fits your needs.
Paramedical practitioner
You may have come across the term “paramedical practitioners” in your health benefits plan but aren’t entirely sure what that includes. Paramedical practitioners are healthcare professionals who provide services that complement traditional medical care and focus on improving your physical, mental or emotional wellbeing.
Some examples of paramedical practitioners include:
- Physiotherapists. Physiotherapists specialize in restoring movement and managing pain through exercises, therapies and rehabilitation plans. These professionals help you recover from injuries or surgeries by improving movement and managing pain.
- Chiropractors. They focus on your spine and joints, using hands-on techniques to reduce pain and improve how your body moves.
- Massage therapists. Experts in massage therapy who help relax tight muscles, reduce stress and improve overall well-being.
- Dietitians. Nutrition specialists who give advice on healthy eating and help manage conditions like diabetes or food allergies.
- Psychologists. Mental health professionals who provide counselling and therapy to support emotional wellbeing and mental health.
- Acupuncturists. Practitioners who use small needles in specific areas of your body to relieve pain or treat other health issues.
- Occupational therapists. They help people regain skills needed for daily life or work after an injury or illness.
- Speech therapists. Professionals who assist with speech problems or swallowing issues.
- Social workers. They offer emotional support and connect you to helpful community resources.
- Naturopaths. These practitioners focus on natural treatments and prevention, using therapies like nutrition, lifestyle changes and herbal medicine to support your body’s ability to heal itself.
- Osteopaths. Osteopaths focus more on whole-body health using stretching and massage techniques to improve the function of muscles, joints and organs.
These services are often included under extended health plans, but coverage amounts and eligible practitioners can vary depending on your specific plan. It’s always a good idea to review your benefits details to understand what’s covered and how you can access these valuable services.
Waiting periods
Some health and dental plans include waiting periods, which means you’ll need to wait a certain amount of time before specific benefits become available. For example, in the first year of your plan, you might only have access to basic dental services like cleanings, while more advanced procedures like crowns or bridges may only be covered starting in the second or third year. Waiting periods are common and help benefits providers manage costs, but they can also delay access to certain services you might need.
The good news is that some plans let you skip waiting periods altogether. For instance, if you’re switching from an employer plan to a personal plan within a specific timeframe, you may qualify for full coverage right away without needing to wait for certain benefits to kick in. It’s always smart to check your plan details to see if waiting periods apply and how they might affect your coverage. Choosing a plan that avoids waiting periods can help you get the care you need without delays and make the most of your benefits from the start.
Stability clause
A stability clause is something you’ll find in many insurance policies, and it’s important to understand how it works. It applies to pre-existing medical conditions and means these conditions must stay the same—no new symptoms, no changes in treatment and no adjustments to medication—for a certain amount of time before your coverage applies. This period is usually between 90 and 180 days. Even a small change, like switching to a new medication or adjusting the dosage of one you’re already taking, could make your condition “unstable” and affect whether your insurance will cover related costs.
Travel insurance is a good example of how a stability clause works. If you’ve had a change in your medical history during the stability period before your trip—like starting a new prescription—your insurance might not cover any issues related to that condition while you’re travelling. This can apply to young adults too, even if they’re generally healthy. Before booking a trip, it’s important to check your policy’s stability clause and make sure you meet the requirements.
How are employer benefits different from personal plans?
You may be starting your first job where health benefits are available to you. Employer benefits, also called group benefits, are insurance plans offered through your workplace. These plans usually include coverage for things like dental care, vision care, prescription drugs and sometimes even wellness programs.
Employer-sponsored health plans are usually more affordable because your employer pays part of the cost and premiums are taken from your paycheque before taxes, saving you money. However, these plans are designed for a large group, so you don’t get to customize your coverage—it’s based on what your employer negotiates. Personal plans, on the other hand, let you choose benefits that fit your specific needs, like dental or vision care, but they tend to be a bit more expensive since you’re covering the full cost yourself.
There are a few features you may come across if you have employer benefits. For instance:
- Coordination of Benefits (COB): Coordination of benefits comes into play when you’re covered under more than one insurance plan (for instance, you may also be covered under your partner’s or spouse’s plan). It determines which plan pays first and how much each plan will contribute to your medical expenses.
Let’s say you have health insurance through your job and you’re also covered under your partner’s plan. When you go to the dentist, you submit the bill through your own health benefits plan first. Your plan may pay 80% of the cost. Then, you send the remaining 20% to your partner’s insurance, which covers the rest. This way, you don’t have to pay anything out of pocket. - Wellness spending account: This is a taxable account funded by an employer. Employees can use the funds to assist with expenses related to fitness equipment, continuous learning, family care and more.
- Health spending account: This is a non-taxable account that employers put credits into. Employees can use this account to pay for medical and dental expenses that are not covered under their group plan or their spouse’s plan.
If you’d like to know more about how these accounts work, this article goes into more detail.
Health benefits don’t have to be scary
Taking the time to understand your health benefits can make a big difference in how well your coverage works for you. Knowing what’s included, from paramedical services to prescription drug coverage, helps you avoid surprises and ensures you’re using your plan to its full potential.
Whether you’re looking for coverage that fits your current needs or planning for the future, being informed empowers you to make smart decisions about your health and get the most value out of your benefits. After all, investing in your health today sets the foundation for a healthier tomorrow.
Check out our Young Adult health benefit plans
Looking for a health benefit plan that allows you to prioritize your wellbeing today and sets you up for a healthy future? Our Young Adult and Blue Choice® plans are designed to help you maintain and support your health with a focus on prevention.
