What You Pay For, and When

 

You and Alcoa share in the cost of your benefits. Alcoa pays the majority of the costs which adds up to more than $7,000 per employee/year. This is an important part of your total compensation. Your portion of the costs are paid in three ways. Your payroll contribution, annual deductible, and coinsurance. Your out-of-pocket maximum limits the amount you will pay each year.

Payroll Contribution
Each pay, you share the cost of your plan through a payroll deduction. This amount was on your enrollment worksheet when you enrolled for your benefits. These contributions are paid on a pre-tax basis which reduces your taxable income, resulting in less tax being taken from your pay.

 

Annual Deductible
When you use medical care during the year, you pay for all of your medical services until you reach your annual deductible. After you've reached this amount, Alcoa begins to share the cost of your medical care through coinsurance.

 

However, not all services require you to meet a deductible. Take a look at your medical chart to see which ones require you to meet a deductible.


Coinsurance
After you've spent enough on medical services to reach your annual deductible, you and Alcoa share the cost of your medical expenses through coinsurance, which is a percentage of the cost. Alcoa pays the majority of the cost.


Annual Out-of-Pocket Maximum
Some people think of their annual out-of-pocket maximum as the "worst-case scenario"- basically, the most they will ever pay for medical care in one year. Keep in mind, most employees never come close to reaching this maximum.

 

After you have enough out-of-pocket expenses to reach your annual out-of-pocket maximum, Alcoa pays 100% of your eligible medical costs for the remainder of the year. Your out-of-pocket maximum includes the money you've spent toward reaching your annual deductible plus your share of coinsurance costs. Each plan has different out-of-pocket maximums, and the maximums are tracked on an individual basis and a family basis.

What is COBRA?

 

A federal law called the Consolidated Omnibus Reconciliation Act (COBRA) requires companies to give employees and their families the opportunity to continue their health care coverage when there is a “qualifying event” that would cause a loss of coverage under an employer’s plan. These events can include:

  • Employee is laid off or his hours of employment are reduced.
  • Employee becomes entitled to Medicare benefits.
  • Spouse loses employer-sponsored coverage.
  • Employee dies.
  • Employee gets divorced or legally separated.
  • Child turns 26.


COBRA coverage is the same coverage that active employees and their dependents are eligible for. If you and/or a family member elect COBRA coverage, the cost will be 100% of the actual cost for that benefit, plus a 2% administrative fee.

 

Coverage generally may be continued for up to 18 months. If loss of coverage is due to an employee’s death, divorce or legal separation; the employee becoming entitled to Medicare benefits; or a dependent child ceasing to be eligible, coverage may be continued for up to 36 months.