Coverage / Benefit
Coverage, sometimes referred to as a benefit, is the range of health or dental services, supplies, or treatments that your insurance plan agrees to pay for under its terms and conditions. Each benefit represents a category of care, such as prescription drugs, dental services, vision care, or paramedical treatments.
How It Works
A plan's coverage outlines what is included, the percentage the insurer pays, and any applicable limits such as annual maximums, coinsurance, or deductibles, where the annual maximum is the most any one individual may receive in a year under the contract. In Canada, the benefit is the amount the provider pays to the policy holder, assignee, or beneficiary when a covered loss occurs, and it can also be a payment that reimburses the member for health costs. This private health and dental coverage supplements Canada's public health insurance plans, which under the Canada Health Act must cover medically necessary hospital, physician, and certain surgical-dental services but do not cover everything, so supplementary coverage is designed to top up a provincial or territorial plan for reasonable and customary eligible expenses. When a person is covered under more than one plan, coordination of benefits ensures the combined reimbursements do not exceed 100 percent of the eligible expense, following standardized rules set by the Canadian Life and Health Insurance Association.
Example:
Suppose a Canadian extended health plan covers physiotherapy at 80 percent up to an annual maximum. After meeting any deductible, the member pays for a session, submits the claim, and the insurer reimburses 80 percent of the eligible amount per visit until the yearly cap is reached, after which the member pays the full cost out of pocket. The physiotherapy benefit applies only because it falls within the plan's defined covered benefits, separate from what the provincial health plan covers.
What to Watch For:
Even if a service is medically necessary, it must fall within your plan's defined benefits to qualify for reimbursement. Some benefits, such as orthodontics or medical equipment, may require pre-authorization before claims are approved.
