What is the difference between a calendar year and a policy year?

While a calendar year is the standard year, a policy year refers to the 12-month period covered by an insurance policy, which may start and end on any date. Certain aspects of insurance, like deductibles and out-of-pocket maximums, reset with each calendar year.

What is a calendar year in health insurance?

In health insurance, a calendar year is used to determine the period for deductible accumulation, premium changes, and benefit renewals. Under the Employee Retirement Income Security Act (ERISA), a plan year is defined as the year designated in the plan document, which may not necessarily coincide with the calendar year.

What is a plan year & a calendar year?

When navigating the world of business and insurance, two commonly used terms are "plan year" and "calendar year." Essentially, a plan year revolves around the start and end dates that an employer designates for their insurance and benefit plans, which might not necessarily align with a calendar year.