Pros & Cons of common medical plan types

Use this table to get a sense for common plan types to help assess which may be best for you and your employees. Then, see below for how these plans cover real-life scenarios.

High Deductible Health Plan (HDHP)

Traditional plan (Copay + Deductible plan)

Copay only plan

This plan is best for a business with… …many single and/or healthy employees with low healthcare use. …employees who want flexibility to receive care from in- or out-of-network doctors or hospitals. …employees with regular healthcare needs, because there’s no deductible to meet before insurance kicks in when in-network providers are used.
This type of plan… …offers a lower monthly premium in exchange for a higher deductible. …helps pay doctor bills, lab tests and prescriptions from the first day. …lets members know the upfront costs for medical services, from specialist office visits to having a baby.
Be aware The lower upfront cost means employees pay for medical services until they meet the (high) deductible and insurance kicks in.
  • for 2018, these plans must have a minimum deductible of $1300/single and $2600/family. 1
Generally, the insurer pays 80% of the cost for medical services and the member is responsible for the rest, plus the copay.
  • Copayments continue, even after the deductible is met.
A deductible typically applies when out-of-network doctors and facilities provide medical services.
Ways to drive down cost Pair with a Health Savings Account (HSA) so employees can contribute pre-tax dollars to help pay for healthcare expenses now, and in the future.
  • Funds are employee-owned for life
  • Funds earn tax-free interest, and build from year to year
Employees can pay less for care by choosing in-network providers. Reduce premium costs by opting for a “narrow network” which has a smaller group of medical providers, and often relies on a primary care physician to direct care.
  • Out of area coverage can be limited, so this is best for a workforce who works at a single location.

See how different plan types cover three real-life scenarios

Learn how these common plans types – copay only, traditional, and HDHP — cover three real-life scenarios.

1. Having a baby

The average cost to welcome a child to the world is $13,540.

  • $3,900 with a traditional plan: The member is typically responsible for 20% of her medical costs up to the deductible ($2700)—and a percentage of the costs after that, including hospital charges for herself ($200 coinsurance) and the baby ($200 coinsurance), obstetric care ($200 coinsurance), and lab tests ($800 coinsurance). All of which totals $3,900 for a two-day stay.
  • $2,500 with a copay plan: With a copay plan there is no deductible, so the member will pay one charge for her entire hospital stay—about $2,500.

Net-net: The member fares better with a copay plan, in addition to knowing labor and delivery costs up front.

2. Making a sick visit to a primary care doctor

The average cost to visit a primary care doctor when your child has strep throat or an ear infection is $200.

  • $200 with a high deductible health plan (HDHP): The member the pay full out-of-pocket price ($200), unless he’s already met his deductible for the year. In 2018 HDHPs must have a minimum family deductible of $2600.1
  • $45 with a copay plan: With a straight copay plan the member would pay an average of $45 for an office visit copay.
  • $40 with a traditional plan: With a traditional plan the member would owe about 20% of the doctor's services, or $40.

Net-net: The member pays about the same with a co-pay or traditional plan, both of which cost less than the HDHP amount.

3. Visiting an emergency room

In an emergency you're probably not comparing costs, but a trip to the ER averages $6,600.

  • $2,760 with a traditional plan: You'll pay about $2,760 for services after you pay your deductible, plus coinsurance for the emergency room doctor, X-rays and lab tests, among other things.
  • $1,200 with a co-pay plan: You'll owe about $1,200 for everything, including straight copays for the ambulance, ER and any advanced imaging.

Net-net: You'd fare better with a co-pay plan, even with unexpected medical issues.

Disclaimer: These examples are for illustrative purposes only. Services based on average costs and average copays (what you pay) if you use in-network providers. Actual costs for medical services will vary by plan and geography.

Get Pricing for group benefits

Find competitively priced plans to fit any budget

Mon - Fri 8:30 a.m. – 6 p.m. EST

1-844-325-2813 (TTY: 711)

Available in select markets
We’ll help you get the most from your employee benefits

Products and services

Explore the different types of group benefits we offer for employees.

Explore group insurance options

Learn about employee health benefits

Take a few minutes to read some helpful information as you consider offering insurance benefits to your employees.

Explore the basics

Wellness solutions

Engage your employees for a healthier, more productive workplace.

Get details