Is health insurance something you appreciate having but also a source of confusion? With all sorts of terminology such as in-network, deductible, coinsurance, premium, etc., the world of insurance can definitely be overwhelming. As a Lockheed Martin employee, it is important to know how much you will pay for health insurance under LM HealthWorks since there are several types of costs involved. Premiums are deducted from your paycheck but what about when a medical expense actually occurs? Let’s break it down to determine how much you would have to pay.
Assumptions
- Example employee is eligible and enrolled in LM HealthWorks
- In network
- Family coverage elected
- $3,000 total out-of-pocket maximum ($1,500 per person)
- $1,500 total annual deductible ($500 per person)
- Lockheed Martin employee needs to have a diagnostic X-ray
- Example employee is the first member of the family to incur medical costs for the enrolled year
| Employee | Aetna | |
| Cost of X-ray | $5,000 | |
| – Deductible | $500 | N/A |
| = Portion Applied to Coinsurance Requirement | $4,500 | |
| x Coinsurance Percentage | 15% | 85% |
| = Coinsurance Amount | $675 | $3,825 |
| Total Owed (deductible + coinsurance amount) | $1,175 | $3,825 |
In this example, the employee would pay only about 24% of the total expense and insurance covers the rest. While $1,175 isn’t exactly spare change, it sure beats having to pay the full $5,000 for the X-ray! Another important point to note is that the individual out-of-pocket maximum for the Lockheed Martin health plan of $1,500 includes the deductible, therefore, the deductible plus the coinsurance amount will never be greater than this amount for the employee on an individual level. The family maximum out-of-pocket would be a grand total of $3,000, so in our example, a separate family member could utilize the remaining $1,500 out-of-pocket maximum to bring the annual maximum to $3,000. Keep in mind that out-of-network medical expenses have higher costs and that prescription drugs and preventive care expenses don’t count toward the out-of-pocket maximum. In the example above, the total owed is less than the out-of-pocket maximum, therefore the employee pays this full amount and the insurance foots the rest. To see even more details about the LM HealthWorks plan, visit their website. Here at Strittmatter Wealth, one of our Lockheed Martin Retirement Specialists would be more than happy to walk you through your employee benefits and tie them into your retirement plan.
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