Talking About Financial Matters That Affect You and Your Organization

What's Reasonable & Customary Mean?

Posted by Gordon R. Hart

Dec 12th, 2015

What's Reasonable & Customary Mean?

Most if not all group insurance plans contain some mention of reasonable and customary. This is an approach by providers to limit allowable costs for some services within a plan without providing a fixed hard cap. Reasonable and customary refers to the maximum allowable amount that a provider will reimburse on a particular service or item.

Few insurers post their reasonable and customary charges because they can differ by region and year submitted. This means that reasonable and customary reflects the typical fees and or costs associated with a particular service or product, in a specific geographical region.

While most providers charge less that the reasonable and customary limits imposed by the group insurers, having the limits “off-the-record” does help keep providers competitive on fees/charges. Publishing the limits would likely result in providers increasing fees to maximize the plan which would in turn drive up premium rates.

Plan members should obtain estimates on services to ensure they understand what the group insurer will reimburse before they are out-of-pocket on large expenditures. Most group insurers have a swift review system to return a confirmation of eligible expense.

What's Reasonable & Customary Mean?

Corporate Office - London

310-700 Richmond Street
London, ON N6A 5C7

Tel: (519) 675-1177

Toll-Free: (888) 327-5777



200-429 Exmouth Street
Sarnia, ON N7T 5P1

Tel: (519) 337-0807

Toll-Free: (877) 822-1522



305-1949 Upper Water Street

Halifax, NS B3J3N3

Tel: (902) 797-1391

Toll-Free: (833) 832-2230


Saint John

190-17 Canterbury Street

Saint John, NB E2L2C3

Tel: (506) 638-6549

Toll-Free: (833) 832-2230



Windsor, Ontario

11505 Tecumseh Road East

Financial Tel: (519) 258-5510

Employee Benefits Tel: (519) 419-5515



1464 Cornwall Road, Unit 1

Oakville ON L6J 7W5

Tel: (866) 940-3777