Navigating health insurance doesn't have to be overwhelming. Whether you're choosing a new plan during open enrollment, starting a new job, or dealing with a coverage issue, understanding how your insurance works can save you money and help you get the care you need. Every health plan has its own rules about which doctors you can see, what treatments are covered, and how much you'll pay out of pocket. Knowing these basics before you need care helps you avoid surprise bills and ensures you're making the most of your benefits. The information below explains the key features you'll encounter with any type of health plan, from understanding different plan types to reading your coverage documents and managing costs.
The Office of the Healthcare Advocate provides free assistance to Connecticut residents with:
Understanding plan options and features Resolving coverage issues Enrollment problems with any type of insurance Appeals and denialsTypes of Health Insurance Plans
Preferred Provider Organization (PPO)
How it works: You can see any provider, but pay less when you use in-network providers. No referrals needed for specialists.
Key features:
- More flexibility to choose providers
- Higher costs than HMOs
- Some coverage for out-of-network care (but you pay more)
- No need for referrals to see specialists
Best for: People who want flexibility and are willing to pay more for choice
High Deductible Health Plan (HDHP)
How it works: Lower monthly premiums in exchange for higher deductibles—you pay more out-of-pocket before insurance kicks in.
Key features:
- Lower monthly premiums
- High deductibles (minimum $1,650 for individuals, $3,300 for families in 2025)
- May be HSA-eligible, allowing tax-advantaged savings for medical expenses
Best for: Healthy people who want to save on premiums and can afford the higher deductible
Health Maintenance Organization (HMO)
How it works: You choose a primary care physician (PCP) from the plan's network who coordinates all your care and provides referrals to specialists.
Key features:
- Lower monthly premiums and out-of-pocket costs
- Must stay within the provider network for coverage
- Need referrals from your PCP for specialist care
- No coverage for out-of-network care (except emergencies)
Best for: People who want lower costs and don't mind coordinating care through a PCP
Point-of-Service (POS)
How it works: Combines HMO and PPO features. You choose a PCP but can get referrals to out-of-network providers.
Key features:
- Primary care physician coordinates your care
- Can see out-of-network providers with referrals
- Self-referrals to out-of-network providers cost significantly more
- Costs fall between HMO and PPO plans
Best for: People who want some flexibility while keeping costs moderate
Key Terms:
Premium: Monthly cost for coverage
Deductible: Amount you pay before insurance starts covering costs
Copay: Fixed amount you pay for specific services
Coinsurance: Percentage of costs you pay after meeting your deductible
Out-of-pocket maximum: Most you'll pay in a year for covered services
Understand Your Plan Documents and Features
Your Summary Plan Document (SPD) (sometimes also called an Evidence of Coverage or Certificate of Coverage document) is the essential guide to your coverage, explaining what services are covered, your costs (deductibles, copays, coinsurance), network providers, and how to get care. For family plans, check if individual deductibles apply or if there's a separate family deductible requirement. When considering a plan, review the prescription drug formulary and provider network to ensure your current physicians and treatments and medications are covered.
Prescription Drug Formulary
Your plan's formulary lists which medications are covered and how much you'll pay.
Typical tier structure:
Tier 1: Generic drugs (lowest cost)
Tier 2: Preferred brand-name drugs
Tier 3: Non-preferred brand-name drugs
Tier 4: Specialty drugs (highest cost)
Before choosing a plan:
- Check if your current medications are covered
- Understand your costs for each tier
- Note that some plans have separate prescription deductibles
- Remember formularies can change annually
Provider Networks
Most plans offer the best coverage when you use in-network providers.
To avoid surprises:
- Verify providers are in-network before scheduling appointments
- Check with both your insurance company and the provider's office
- Keep records of when and who confirmed network status
- Remember that networks can change during the year
Network verification checklist:
- Is my doctor in-network?
- Is my preferred hospital in-network?
- Are my specialists in-network?
- If I need a referral, are there in-network options available?
How Private Health Plans Are Regulated
Fully Insured Plans: These plans are subject to the laws and regulations of the state where they are written. When Connecticut mandates that health insurance plans must cover a particular treatment or procedure, fully insured plans written in Connecticut must comply with these state mandates.
Self-Funded Plans: Some employer-sponsored health benefit plans are "self-funded." With a self-funded plan, the employer pays for covered claims directly out of its own capital rather than paying premiums to an insurance company. The employer may contract with an insurance company or other administrator (sometimes called a "third-party administrator") to administer the benefits for employees and their dependents. Self-funded plans are exempt from state law and are typically regulated under the federal Retirement Income Security Act (ERISA). Even though self-funded plans are exempt from state law and regulation, OHA can assist you with issues related to either fully insured or self-funded plans.
Access Health Insurance Marketplace
Connecticut has established Access Health CT (AHCT) as its official health insurance marketplace under the Affordable Care Act. Individuals and small businesses can use AHCT to enroll in health coverage during open enrollment periods and during special enrollment periods triggered by qualifying life events.
Key Features of the Marketplace
Multiple plan options from private insurance companies
All plans cover essential health benefits as defined by the Affordable Care Act
Financial assistance available based on income:
- Premium Tax Credits reduce monthly premiums for households with incomes 100% of the Federal Poverty Level
- Cost-Sharing Reductions lower deductibles, copayments, and coinsurance for those with incomes below 250% FPL
- No denial of coverage for pre-existing conditions
- Standardized plan categories (Bronze, Silver, Gold, Platinum) to facilitate comparison
Only plans sold through Access Health CT are eligible for financial assistance in the form of Advance Premium Tax Credits. If your household is below the Federal Poverty Level, you may be eligible for this assistance, which can significantly lower your monthly premium for health insurance.
When you apply through Access Health CT, the system automatically checks your eligibility for Medicaid/HUSKY programs as well. This streamlined process helps ensure you find the most affordable coverage option for your situation.
OHA can provide assistance with issues related to eligibility and enrollment through Access Health CT. If you encounter problems with your application or have questions about your options, our advocates can help guide you through the process.
Need Help?
Contact us for personalized help navigating your health insurance questions and challenges.