Term Definitions
Many people are unfamiliar with terms used in their benefits packages. The list below provides definitions for some commonly used terms.
An allowable charge is the maximum amount the Plan permits for covered services. It is based upon "Usual, Customary, and Reasonable" rates as determined by the Claims Processing Contractor (CPC), a company that the State Health Plan pays to process claims and provide related administrative services. The "usual" amount is based upon the average fee that a doctor charges his or her own patients. "Customary" refers to the average fee those doctors of similar specialties, years of practice and expertise charge patients. "Reasonable" is based upon a review of medical records. The Plan takes the lower of the usual or customary amounts when determining an allowable charge. Currently, Blue Cross Blue Shield of North Carolina is the State Health Plan's Claims Processing Contractor.
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What is "coinsurance"?
Coinsurance is the amount the member must share in contributing towards the cost of covered medical expenses. Coinsurance is limited to $2,000 each Plan year; up to $6,000 for Employee/Child(ren) or Employee/Family contracts. This is in addition to any copayments, deductibles, and services not covered by the Plan.
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What is a "copayment"?
A copayment or "copay" is the specified portion of a charge for which the member is responsible, such as a prescription drug, office visit, or professional services copayment. For the Plan year July 1- June 30, the office visit and professional services copayment is $25.00. The indemnity plan co-payment is made even after a deductible has been met and does not apply toward the deductible. Prescription drug copays are set as follows: $10.00 for generic drugs; $30.00 for brand-name drugs where no generic is available; $40.00 for brand-name drugs for which a generic is available; and $50.00 for a drug not on the preferred drug list. All generic drugs are on the preferred list. The maximum total drug copayment per Plan year is $2,500 per person.
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What is a "deductible"?
The deductible is the amount of allowable charges that members must pay each Plan year before benefits are payable. Once the indemnity plan year deductible is met, the Plan pays 80% of allowable charges while the member pays the balance. The deductible is $450 per Plan year, July 1 through June 30.
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Note: The information contained in these Frequently Asked Questions does not include all the benefits or everything you need to know about the State Health Plan. Please check your Benefit Booklet for further details. For more information click on the appropriate Benefits Book for your health plan: NC SmartChoice Basic PPO, NC SmartChoice Standard PPO, NC SmartChoice Plus PPO and the Indemnity Plan. We encourage you to call if you have questions about any of your health plan benefits. For the contact information, consult our Contact Us page.
- What is an "allowable charge"?
- What is "coinsurance"?
- What is a "co-payment"?
- What is a "deductible"?
An allowable charge is the maximum amount the Plan permits for covered services. It is based upon "Usual, Customary, and Reasonable" rates as determined by the Claims Processing Contractor (CPC), a company that the State Health Plan pays to process claims and provide related administrative services. The "usual" amount is based upon the average fee that a doctor charges his or her own patients. "Customary" refers to the average fee those doctors of similar specialties, years of practice and expertise charge patients. "Reasonable" is based upon a review of medical records. The Plan takes the lower of the usual or customary amounts when determining an allowable charge. Currently, Blue Cross Blue Shield of North Carolina is the State Health Plan's Claims Processing Contractor.
[Back to Top]
What is "coinsurance"?
Coinsurance is the amount the member must share in contributing towards the cost of covered medical expenses. Coinsurance is limited to $2,000 each Plan year; up to $6,000 for Employee/Child(ren) or Employee/Family contracts. This is in addition to any copayments, deductibles, and services not covered by the Plan.
[Back to Top]
What is a "copayment"?
A copayment or "copay" is the specified portion of a charge for which the member is responsible, such as a prescription drug, office visit, or professional services copayment. For the Plan year July 1- June 30, the office visit and professional services copayment is $25.00. The indemnity plan co-payment is made even after a deductible has been met and does not apply toward the deductible. Prescription drug copays are set as follows: $10.00 for generic drugs; $30.00 for brand-name drugs where no generic is available; $40.00 for brand-name drugs for which a generic is available; and $50.00 for a drug not on the preferred drug list. All generic drugs are on the preferred list. The maximum total drug copayment per Plan year is $2,500 per person.
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What is a "deductible"?
The deductible is the amount of allowable charges that members must pay each Plan year before benefits are payable. Once the indemnity plan year deductible is met, the Plan pays 80% of allowable charges while the member pays the balance. The deductible is $450 per Plan year, July 1 through June 30.
[Back to Top]
Note: The information contained in these Frequently Asked Questions does not include all the benefits or everything you need to know about the State Health Plan. Please check your Benefit Booklet for further details. For more information click on the appropriate Benefits Book for your health plan: NC SmartChoice Basic PPO, NC SmartChoice Standard PPO, NC SmartChoice Plus PPO and the Indemnity Plan. We encourage you to call if you have questions about any of your health plan benefits. For the contact information, consult our Contact Us page.
