Embedded deductibles apply in Family Plans. When an embedded deductible applies to your family plan, it means that one person who is a member of the family plan can reach their individual deductible, and all covered expenses for that individual will be paid from the co-insurance point even when the family deductible may not have been satisfied.

For example, pretend you have a plan which features an in-network family deductible of $5,000; if one member of the family satisfies the individual $2,500 deductible, the Carrier will pay 80% (the co-insurance point) of remaining in-network expenses for that individual. Once another person or a combination of persons meet the remaining $2,500, the full (non-embedded) family deductible would be considered satisfied.

How Does an Embedded Deductible Work?

Once an individual reaches the embedded deductible, that individuals claims moving forward will be covered at the co-insurance point, but the rest of the family will not be covered at the co-insurance point until the entire family deductible has been met.

To Summarize:

An embedded deductible is a separate lower deductible that an individual can set for him or herself aside from the family’s total deductible. This means a single family member doesn’t have to meet the full family plan deductible before his or her health insurance payments kick in.

Sources:

healthcareinsider.com