We get asked questions about health insurance in NJ all the time.

Health coverage can help pay for some, if not all, of your individual or family medical expenses.

Some employers offer group benefits which include health insurance, but as an individual, you can also purchase your own policy.

Here are some questions we’re often asked (plus answers!) about health insurance in New Jersey.

What’s a premium, deductible and copay?

Three terms you will come across with any insurance plan are premium, deductible and copay.

Here’s a quick overview of all three.

Premium

Your premium is the set rate that you pay for your policy.

Depending on the policy you purchase, you may pay this every year, semester, quarter, or month

In general, the more you pay at once, the less you pay overall, usually making an annual premium the cheapest option.

The main factors that can impact the cost of an insurance premium are the type of coverage, the amount of coverage, your personal situation and competition in the market:

• Type of coverage: opting for comprehensive coverage will increase the cost of the premium.
• Amount of coverage: the greater the amount of coverage, the greater the premium.
• Your personal situation: anything from your insurance history to your job can impact the cost of your premium.
• Competition in the market: if your demographic is a primary target for insurance companies, it is possible that your premium will be lowered to entice you.

Deductible

Your deductible is the amount of money you are responsible for paying before your insurance company will step in.

A high-premium policy will have a lower deductible while a low-premium policy will have a higher deductible.

A policy may have a single deductible or different deductibles for different claims.

For example, your policy may state that you are responsible for the first $5,000 in claims, or a home insurance policy may have one deductible for fire damage and another for earthquake damage.

Deductibles can be listed as dollar amounts, or percentages of the claim or the value of the item being insured.

Copay

A copay is a specific amount you must pay every time you seek items or services that are covered by your policy.

This is most commonly used in health insurance coverage, for prescription medication or doctor’s visits.

As with deductibles, a higher premium usually means a lower copay while a lower premium usually means a higher copay.

Which is better, a low premium or low deductible?

Everyone would like to pay lower health insurance premiums, but it can be a calculated risk where you are hoping to need little health care in order to lower your monthly payments.

How can you tell if the plan you considering is right for you?

Key terms

To navigate the decision, you need to know three key terms (some we already covered above):

• Premium: the fee you pay each month, quarter or year to keep your policy active. This is a set price and does not change depending on whether or not you use the policy.
• Deductible: the amount you pay out of pocket for your medical care; once you meet your deductible, the insurer takes overpaying for the rest of your care.
• Out-of-pocket limit: the limit placed on how much you will be expected to pay for medical care within a year; once you exceed this, your provider takes overpaying for care in full.

Low premium & high deductible

Some people would argue that a high-deductible plan is universally unwise given that something could always happen to limit your ability to cover the deductible.

That said, some are better suited to this plan than others.

You might benefit from such a plan if you:

• Are young and in good health
• Do not take unnecessary risks
• Work a low-risk job
• Are not pregnant and do not plan to become pregnant soon
• Contribute to a health savings account in addition to having your health insurance in NJ

High premium & low deductible

This is a safer, more predictable choice and ensures that a health emergency is affordable.

You may find this plan to be the better option if you:

• Can afford a high premium plan
• Are older
• Are in moderate health
• Work a high-risk job
• Are pregnant or plan to become pregnant

If a riskier, high-deductible plan is all you can afford, remember that it is better to have such a policy than no health insurance at all.

Is there a difference between employer-sponsored vs. private health insurance?

For many people, employer-sponsored health insurance in New Jersey is a key benefit of their employment.

In fact, some Americans put off retirement so they can continue their insurance coverage with their employer.

But is employer-sponsored coverage really the only option for health insurance?

Employer-sponsored health insurance

Employer-sponsored health insurance is made available through an NJ employer who chooses the insurance provider and the plans that their employees can select.

Typically, employers pay a portion of the plan’s monthly premium (often 50%).

This usually makes employer-sponsored health plans less expensive for employees than private plans.

Another benefit of this insurance coverage is that if you meet the requirements of your employer (hours worked, etc.), you are automatically eligible for coverage.

There is no individual underwriting needed, and even if you have pre-existing health issues, you should be able to get the coverage you need.

One major downside to this health insurance is that rates are renegotiated yearly, and can change based on the costs of the entire group over the previous year.

This means that even when you do not use your health insurance a lot, if other employees do, your costs can go up.

Private health insurance

Private health insurance is a plan that you purchase on your own, without employer contributions or a group policy.

It can cover you as an individual or your immediate family.

Because of the recent legislative focus on health insurance laws in NJ, there is a lot up in the air regarding private coverage.

While the Affordable Care Act sought to prevent insurance companies from denying coverage or up-charging for it when applicants have pre-existing conditions, it is not clear how long these protections will be in place.

Overall, this health insurance is used by those who are not eligible for employer-sponsored health insurance.

However, some people eligible for employer-sponsored health insurance opt for private policies either to supplement their primary policy or to gain access to specific features or care providers that are not covered by the policy available through their job.

As private health insurance is not contingent on your employment status, it can cover you as you change jobs, move into self-employment or retire.

Which plan is best?

When choosing a plan that’s right for you, consider any pre-existing conditions, desired flexibility, the care providers you want to have covered and the stability of your job.

Could your hours be reduced to the point that you are no longer eligible for employer-sponsored coverage?

Are you unable to go to your preferred doctor or clinic?

Should I have two health insurance plans?

Coordination of benefits is a term used to describe the process of making claims when you have two insurance policies.

In this process, you set one plan as your primary and the other as your secondary.

Should you need to make a claim, the primary insurance pays out first and then the second policy kicks in where it leaves off, covering the costs that the primary plan failed to cover.

Is it a good or bad idea?

If you have access to two different plans, through your spouse or multiple workplaces, consider the possibility of dual coverage.

If your primary plan offers sufficient coverage, then you may not need dual coverage, but a second plan can prop up a mediocre plan or tough medical situation.

Consider how having two policies impacts your budget.

Is the extra coverage worth the extra costs?

In some cases, there are little to no extra costs associated with the extra coverage.

For example, in a marriage, both spouses may have health insurance plans in NJ through their workplace and can cover each other.

This provides more complete coverage at a minimal cost.

It’s not “double” insurance

You cannot make the same claim to both insurance providers.

For example, if your primary plan covers a broken bone in full, you cannot then also bill your secondary coverage company for the full or even a partial amount.

The secondary insurance can only cover what the primary coverage does not.

Will having a secondary plan allow the primary provider to pay less?

The primary plan must cover everything outlined in your contract with the company.

It cannot pay less because the other plan will kick in and cover it.

In fact, the primary coverage company need not know the secondary plan exists.

Do I need long-term care or disability insurance?

Insurance can protect you against worst-case scenarios, and those become more likely as you age, even if you are in good health.

Many people over the age of 50 look into long-term care and disability insurance.

This post may help you determine if you need one or both of these policies.

Long-term care insurance

Long-term care coverage is designed to help those who no longer able to care for themselves.

To qualify, you must be unable to perform at least two of these six daily activities: bathing, dressing, transferring (moving to and from a bed or a chair), toileting, continence and eating.

This policy can be used at any age.

What this coverage includes may vary, but should at least include coverage for long-term care facilities.

Disability insurance

Disability insurance is based on your income.

It pays a percentage of your income, usually around 60 percent, when you are unable to work.

Coverage applies until the age of 65.

You can use it to supplement social security disability payments or on its own.

In most cases, you can take out this policy at any age, but few policies will extend beyond the age of 65.

What’s best for you?

Consider your savings and your age.

Do you have enough money put away that if you could not work, you could survive until you receive government benefits?

If so, you may want to only purchase long-term care coverage.

If not, you should purchase both.

Because disability coverage usually ends at the age of 65, if you do not have at least a decade before you reach that milestone, it may not make sense to take out a disability policy.

If you have a decade or more, it may be one of the most important policies to have.

Your current health and family medical history may also indicate that you are more likely to need intensive care when you are older, making a long-term care policy a good investment in your future.

Health insurance in summary

The goal is to purchase a health insurance policy decades before you are likely to need it, preventing pre-existing conditions from rendering you ineligible.

To get the right policy for you, you need to consider how each item works with each other and what works best for you.

To get the best plan for your needs, it’s usually a good idea to speak to an experienced insurance broker.