This coverage is designed to insure expenses not covered by a basic medical plan. Covered persons are first reimbursed for their medical expenses under the employer's basic plan, usually with no deductible or co-payment applied, to the extent that the basic plan covers the expenses. Expenses not covered by the basic plan can be reimbursed under the supplemental major medical plan, usually after the satisfaction of a corridor type deductible. After the covered expenses exceed the deductible, the major medical plan takes over and typically pays a percentage, such as 80%, of the covered expenses in excess of the deductible amount. There frequently is a limit on the amount of covered expenses that are subject to a coinsurance provision, after which the covered expenses are reimbursed in full.

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