uNDERSTANDING YOUR iNSURANCE pOLICY

Disclaimer: This page is designed to help parents understand their insurance coverage and financial obligations with respect to ABA services. This information is general and meant to serve as a resource, but you should ALWAYS verify your specific benefits with your insurance provider. While we at Impact ABA Services will always do our best to assist in interpreting your insurance coverage, ultimately, understanding the terms of your plan, the limits of your coverage, and your financial obligations, are your responsibility.


Key Policy Terms and Concepts for Interpreting Your Insurance Plan

In-Network: In-Network providers have a standing contract with your insurance company. This contract typically outlines the obligations of the provider as well as the obligations of the insurance company. It also spells out the negotiated rates for the services provided. Insurance companies also vet (credential) providers prior to allowing them to serve as an in-network provider. 

  • The process of initially contracting and credentialing with an insurance provider can take 6 months to 2 years with an additional 3-6 months for each individual provider to be credentialed, once added to a group contract.

  • There are any number of reasons why a provider might not be In-Network with an insurance company. These reasons include, but are not limited to:

    • The insurance company is not accepting new providers into their network (this is often the case)

    • The provider could not agree to some terms of the contract proposed by the insurance company and the insurance company was unable to compromise

    • The provider chose to leave the network due to difficulty with processes, payments, support, etc.

    • The insurance provider chose to terminate the contract with the provider

  • You absolutely want to make sure that your ABA provider is In-Network with your insurance carrier, if at all possible, as being Out-of-Network, can very quickly become cost prohibitive.


Out-of-Network: Out-of-Network providers do NOT have a contract with your insurance company. Some policies have Out-of-Network benefits and some do not. Typically, Out-of-Network benefits are much more expensive to access (higher deductible) and cost significantly more than In-Network benefits to utilize (higher out of pocket maximum).

  • As Out-of-Network providers have no contract with your insurance company, they do not have a negotiated/discounted service rate agreement either.

  • Prior Authorization is still usually required to access ABA benefits.

  • Even if your insurance policy says that it will pay a certain percentage after your Out-of-Network deductible, it is not a guarantee that they will pay that percentage of the billed amount. They may only pay a percentage of a lower amount that they deem “customary” and leave you on the hook for more than your anticipated percentage of what was billed.


Primary Insurance: This is the insurance policy that a provider MUST BILL FIRST. If you have multiple insurance policies, you do not get to pick which one is primary. Here is how you determine primary insurance for your child.

  • If your child has ONLY Medicaid, Medicaid is the primary.

  • If your child has Medicaid and any other insurance policy, Medicaid becomes secondary.

  • Medicaid is always the payer of last resort, so if your child has multiple commercial insurance policies, then Medicaid will become tertiary (billed last).

  • If your child has multiple commercial policies:

    • If a child has multiple commercial policies because they are on both parents’ plans:

      • If the parents are married, primary insurance is determined by “the birthday rule”

        • This means that whichever parent’s birthday comes first in the calendar year, determines which policy is the child’s primary. (Example: Parent 1: January 16, 1984, Parent 2: March 26, 1980 - Parent 1’s policy is primary, even if Parent 2 has the better policy)

      • If parents are unmarried but share custody

        • Primary insurance will be determined based on which parent is the primary custodial parent unless responsibilities for insurance are otherwise stipulated in a court mandated/approved divorce decree or written custody arrangement

    • If a child has a commercial insurance policy in their own name (they are the Subscriber, rather than a beneficiary on the parent’s plan), then this policy will always be primary. Similarly, if parents each have an employer sponsored plan, the parents will have different primary insurance (the one where they are the named subscriber, will always be primary).

  • Note: most parents think that more insurance is always better. It is important to understand that this is not the case. It can sometimes be better to have a single policy with good terms and a robust provider network over 2 mediocre plans or a situation where an inferior plan is the primary insurance policy. It is important to understand the terms of all policies and how they interrelate. Please note as well that if your child has Medicaid coverage, it will always be supplanted by commercial policies and that means finding providers that are In-Network with ALL Payers (Primary, Secondary, and Medicaid) in order to avoid out-of-pocket costs.


Secondary Insurance: Secondary insurance will not apply if you only have one insurance policy. If you have 2, the one that is not the primary (see rules above) is the secondary. If you have 1 commercial policy and Medicaid, Medicaid will always be secondary.


Tertiary Insurance: This will only apply if there are more than 2 insurance policies in play. Most often, this will be Medicaid, if a child has 2 commercial policies plus Medicaid. If, by some chance, a child has more than 2 commercial policies, this gets trickier.


Deductible: An annual amount that you have to pay toward medical expenses before coverage kicks in for ALL of your medical benefits

  • Depending on your insurance plan, some benefits (especially routine/preventative/non-emergency care) may kick in before the deductible is met

  • ABA may or may not require the calendar year deductible (CYD) to be met before insurance pays. 

    • This is something that you need to specifically check. Just because you only have a copay at your regular doctor, does not mean that the same rules apply to ABA. Basic information about this should be available in your Schedule of Benefits that you are provided when you enroll. If you do not have access to your Schedule of Benefits and Plan Policy Documents, you should reach out to your HR department or the insurance company for a copy.


Out of Pocket Maximum: This is the most you can be expected, in any given year, to pay toward your healthcare expenses before your insurance pays for everything else at 100%.

  • Some plans may have a different Out of Pocket Maximum for In-Network and Out-of-Network benefits, or for an individual vs. a family on the same plan.

  • If you do not have secondary insurance coverage (in other words, if you only have 1 insurance), then this is the amount of money that you should always budget for across the calendar year for an intensive ABA therapy program.

  • Intensive/Clinic-Based ABA will almost always meet the Out of Pocket Maximum across a calendar year and sometimes within the first couple of months of the plan year.


Copay: This is a set amount that you are expected to pay, at the time of service, for particular services (until your out of pocket maximum has been reached). Sometimes (for covered services depending on your plan type) the copay is all you will be expected to pay for a service, sometimes copays do not kick in until the deductible has been met. 

  • Copays may or may not apply to your deductible, so it is worth clarifying this with your insurance company.


Coinsurance: Same principle as a copay only, instead of a fixed dollar amount, you pay a percentage of the overall charge for the services. 


Premium: This is what you pay for your health plan every month. Missing a premium payment can result in termination of your policy. There is typically a grace period before the lapse is reported to providers. This means that, if you allow your policy to lapse, without informing a provider immediately, you could become financially responsible for any charges accrued that cannot be billed to insurance. Additionally, responsibility would be at the billed rate, rather than the negotiated rate, if you are uninsured at the time that charges are accrued.


Prior Authorization: If an insurance policy requires Prior Authorization, that means that a specific process needs to be followed by the provider to get permission, in advance of providing the service, from the insurance company. 

  • ABA usually requires periodic prior authorization for services.


Overview of Plan Types

  • HMOs

    • HMO stands for Health Maintenance Organization. HMOs are typically discussed in contrast to PPOs (Preferred Provider Organization) Plan. 

    • HMOs are typically lower cost, but more restrictive than PPO plans.

    • Common Restrictions: 

      • No out-of-network benefits (any out of network expenses would be 100% your responsibility)

      • Referrals may be required for specialists

      • Potentially fewer providers considered in-network (really important to check online)

  • PPOs

    • Preferred Provider Organization

    • Less restrictive than HMO, but higher premiums.

    • Out-of-Network benefits (may have higher out of network deductibles and out of pocket maxes, but there is coverage and a cap)

    • (Usually) No referrals required for specialists

    • Potentially larger participating provider network