You probably don’t give your health insurance much thought until you need it. And then, depending on your plan and the care you need, you see the word copay. Or coinsurance. Or deductible. What do these terms mean?

Common health insurance terms can be confusing. But learning the definitions can help you to better understand your plan and use it to your benefit.

Health insurance premiums are how much you pay each month

The amount you pay for your health plan each month, whether you use any care or not, is called a premium. Whether your wrist is broken or sprained and just needs some ice, your monthly premium stays the same. Depending on your type of plan, your premium might automatically come out of your paycheck through your employer or you might pay it directly to your insurance company.

Deductible means what you pay before your plan pays

The amount you have to pay yourself, each year, before your plan will pitch in for your care is called a deductible. For example, if this amount is $500 a year, your plan won’t pay for any of your care until you’ve paid $500 out of your own pocket for things like doctor visits and X-rays (premiums don’t count). Let’s say you’ve already paid $300 this year for doctor visits, a few tests and a prescription or two. If you have to seek any more care this year, you’ll pay the first $200 of your costs to hit that $500 amount, then your health plan will help you pay for the remainder of your costs. Most plans have coinsurance or copays after you pay your deductible, so you’ll pay only a portion of the costs after that.

An embedded deductible is what you pay for a family member’s care before your plan pays

If you’re on a family plan, you may have two different amounts you have to pay before your plan starts to help: one for individual family members and one for your whole family’s care combined. The amount for an individual family member is called an embedded deductible, and it can help you save money if one family member has higher medical costs. Once you’ve paid that amount for that family member’s care, your plan will help pay for their care for the rest of the year – even if your family combined hasn’t paid enough yet for the plan to start paying for care for every family member.

Copay is defined as a flat fee for a standard service

The flat fee you pay when you use specific services – like having a doctor take a look at your wrist – is called a copayment, or copay for short. You’ll usually pay the set amount, say $40, at the clinic when you get care. Your copay for different types of care may appear on your insurance card. Compare these costs when you’re deciding whether to call your doctor’s office for an appointment, swing by an urgent care or convenience clinic on your way home from work, or head straight to the emergency room. Often getting care at your doctor’s office, urgent care or Virtuwell will have lower copays than the emergency room.

In health insurance, coinsurance is your share of your care after your deductible

For some services, you share the cost with your health plan. Instead of a flat fee like a copay, the percentage of the total cost of your care that you pay is called coinsurance. On many plans, you may pay a deductible before you pay your coinsurance percentage of the remaining cost.

Finding a plan with the right coinsurance percentage for you depends on how much coverage you need each year. If you frequently visit the doctor, a plan with a high monthly premium that will likely have lower coinsurance may be right for you; if you rarely visit the doctor, a plan with a low monthly premium but higher coinsurance may work for you.

Many people have plans with an 80/20 coinsurance policy, meaning your health insurance provider pays 80% of the medical expense, and you cover the other 20%. Say the cost of X-raying, diagnosing and putting a cast on a broken wrist adds up to $1,200. If your plan calls for you to cover 20%, you can expect a bill for $240. Your plan takes care of the rest.

Out-of-pocket maximum means the most you’ll pay for your care

The absolute most you’ll pay for your care for the year is called the out-of-pocket maximum. Once you’ve paid enough to hit your individual or family plan’s out-of-pocket maximum, your plan will pay 100% of any other covered care you have for the rest of the year. So, if you faced some big health challenges earlier in the year and your broken wrist is just the icing on the cake, you won’t pay a penny if you’ve already hit this limit. (Reminder: monthly premiums don’t count toward your out-of-pocket maximum.)

The allowed amount in health insurance is the maximum amount your plan pays for a covered service

All health plans have a maximum amount they are willing to pay for each procedure, visit type or other covered health care service. It’s often called the allowed amount in medical billing but might also be referred to as an eligible expense, payment allowance or negotiated rate. If your health care provider charges more for a service than your plan’s allowed amount, you may have to pay the difference.

The allowed amount is generally consistent across different insurance companies and often reflects the rates set by the Centers for Medicare and Medicaid Services (CMS) for federally funded health plans based on the fair market value of each health care service.

Health insurance plans negotiate discounts to save you money

Health insurance companies negotiate discounted rates with providers to help their members save money. This is one of the most important benefits of having health insurance. When you buy things in bulk, like paper towels, the cost per roll is less expensive than when you buy them individually. The same idea applies for health care.

These providers are often part of your plan’s network, which can make it easier to find care since they have a pre-arranged contract with your health insurer. You’ll see the discount that your insurance company negotiated for its members reflected on your explanation of benefits after you get care.

The term “plan paid” is the money your plan paid for your care or services

When you see “amount plan paid” on your explanation of benefits, you’re seeing the amount paid by your health plan after the negotiated discount with the provider. This will vary by the type of service, whether it was at an in-network provider, and where you’re at in your deductible or out-of-pocket maximum.

Primary insurance is the insurance that pays first

Primary insurance is the plan that is billed first when you receive medical or dental care. For most services, this would be your health plan through your employer or Medicare.

However, occasionally another type of insurance should pay first. For example, if you end up in the emergency room after a car accident, your auto insurance would pay primary and your health insurance would pay secondary to help with any costs not covered by your auto insurance.

Which means secondary insurance pays second

Secondary insurance is the plan that is billed second when you receive medical or dental care. This could be another health plan (like coverage from a spouse), or voluntary or supplemental coverage that you buy to extend your coverage.

If you have secondary insurance, it is important to respond to any coordination of benefits (COB) requests from your health insurance company. COB processes let your health insurer know if you have another type of insurance that should pay first, such as in the car accident example. It also makes the claim process go more smoothly for your health insurance to help with any additional costs.

Primary and secondary insurance rules mean you may still have out-of-pocket costs

Your primary insurance pays the claim up to your coverage limits, and your secondary insurance may pick up some or all the remaining costs. But you may still be responsible for some of the cost of your care, even with two forms of insurance coverage. For example, you might be responsible for paying deductibles, copays and/or coinsurance fees on both insurance policies depending on your benefits.