About the Deductible Carryover Provision
Not every, but some, individual and group health insurance plans contain a deductible carryover provision, which permits you to carry-over any part of your deductible you have not met into the next calendar year, based on health care expenses gathered between October and December. Most health insurance plans operate on a calendar year, therefore if your coverage starts at the end of the year, and you immediately start using your plan, claims from November and December will count towards your deductible for the following year. This is also referred to as fourth-quarter deductible carryover
Example of Carryover
The amount of claims incurred in October, November and December will act as a credit to your annual deductible beginning in January of the following year. For example, an individual is enrolled in a plan with a $2,500 deductible, and they have received $1,000 worth of health care services that have been applied to the deductible as of March. In November, they used another $500 of care, which counts toward the deductible. The $500 amount ends up carrying over to the next year’s deductible, regardless of the fact that they did not meet the deductible.
When the new year begins, this individual will have $2,000 remaining until their deductible is met in full. This only applies, in some cases, to the first three months of the plan year. After the first three months is over, the deductible will be set to zero. Carryover credits will still be used even if you have met your deductible before October, which if you have met your annual amount before then would work to your benefit for the next year.
Deductible Carryover-Friendly Individual Health Plans
Although it is typically more common among employer-sponsored health plans, the deductible carryover credit is available through individual health plans as well. A benefit of having such a plan is not to watch your out-of-pocket costs disappear at the end of the year, when many health insurance companies consider the year over and no longer count such expenses toward your deductible. The following companies have been found to use this three-month deductible carryover benefit, or simply find another way to structure the deductible year to make more sense.
Unfortunately for those living anywhere besides South Florida, you will not get to experience the AvMed three month deductible carryover provision. If you do live in the coverage zone for AvMed, you are in luck because although their rates can be a bit steep in some cases, this is a lovely option for policy holders who want to make sure their out-of-pocket costs count towards their deductible no matter what time of year it may be. All AvMed plans come with this feature, so regardless of which one you choose, your services from October through December will act as a credit toward the next year’s deductible.
Though there is no deductible carryover with CoventryOne plans, they have simplified the process by creating a policy year deductible as opposed to a calendar year deductible. By considering only the length of time since your plan was purchased, this allows for no confusion when it comes to deductible carryover. This means that all out-of-pocket payments will be applied to your deductible, working your way to meeting it sooner and receiving more coverage for less money.