Plan Tiers
Plan tiers refer to the different levels of coverage available within a group or individual insurance plan. Each tier offers a varying combination of benefits, coverage limits, and premium costs, allowing members to choose the option that best fits their needs and budget. Tiers are commonly labeled as Basic, Enhanced, or Premium, though terminology can differ by insurer. Higher tiers typically provide more comprehensive coverage and higher annual or lifetime maximums, while lower tiers focus on essential protection at a lower cost.
Plan tiers are often used in extended health, dental, and vision insurance.
Example:
An insurance company might offer three plan tiers: Basic coverage with 70 percent reimbursement for prescription drugs, Enhanced coverage with 80 percent reimbursement, and Premium coverage with 90 percent reimbursement and higher dental maximums. Those applying for insruance can select the tier that matches their family’s healthcare needs.
What to Watch For:
Compare the coverage details, coinsurance percentages, and annual maximums for each tier before choosing. Some tiers may include additional benefits, such as vision care or paramedical services, that are not part of lower-level plans. Once enrolled, changes to plan tiers may be restricted - where upgrading to a higher plan tier may require medical underwriting.
