What is an embedded deductible?

• A. Each insured person has their own deductible; once an individual's deductible is met, that person is eligible for benefits even if the family deductible hasn't been met.
• B. There is a single family deductible only.
• C. The deductible applies to all family members only after a year.
• D. No deductible for dependents.

Answer: (A)

Embedded deductible means each person on a family health plan has their own deductible, and once that person meets their own deductible, their eligible expenses are paid by the plan even if the family’s total deductible hasn’t been met yet. This setup protects individuals who need care by starting benefits for that person once their own deductible is satisfied, without waiting for the entire family to reach a single, shared deductible.

For example, if the plan has an individual deductible of 1,000 and a family deductible of 3,000, one member who incurs 1,000 in covered costs has met their own deductible and would start receiving benefits on subsequent expenses for themselves, even though the family total is still below 3,000. The other family members would still need to meet their own deductibles before their costs are covered, unless they also reach their own deductible. This distinguishes embedded deductibles from plans that rely on a single family deductible for everyone.