As the new year quickly approaches, it brings with it a fresh start at many things. One important thing to pay attention to is your insurance deductible. Insurance plans work in one of two ways:
- Contract year plan. This means your plan begins and ends on a date you initiated coverage, and can be anywhere throughout the year. For example, it could begin October 1st and end September 30th of the following year.
- Calendar year plan. These plans always begin on January 1st and end on December 31st.
Why does this matter? It matters because as January 1st approaches, if you’re on a calendar year insurance plan, your deductible will reset (go back to zero) and you will have to pay out of pocket for each session to reach your deductible until insurance will begin kicking in coverage for sessions (including reducing your out of pocket expense down to the copay or coinsurance).
The best way for you to find out what kind of plan you have is to call your insurance company (see the phone number on the back of your card), ask them when your insurance plan renews (contract or calendar year), and how much your deductible is – both for in-network and out-of-network providers (if you don’t already know). It’s good information to know for budget purposes. You may have to reach your deductible early, but then it’s good for the remaining length of your plan, often including medical visits!