Employee Benefits Insurance Plan 101: Know What To Choose
If your employer provides insurance in its employee benefits plan, you will have to determine what options you want and what options are not for you. New employees generally receive benefits after being recruited and completing a probationary period.
There are a few health insurance plans to choose from when an employer decides to provide workers with medical coverage. The most common types of health care plans offered are health maintenance organizations (HMOs) and preferred provider organizations (PPOs).
Your insurance coverage premium is deducted from your salary for each pay period. The employer can cover part of the cost depending on the particulars of your job's benefits package.
The Employee Benefits Manager or the HR manager of your company can provide you with specific details on open enrollment and what portion of the benefits the employer pays for.
Below are some of the most popular insurance options provided by employers to their employees:
Depending on the specific program you pick, the general health insurance part of your employee benefits insurance package can vary. It can be covered by various types of health insurance plans, such as a plan for the Health Maintenance Organization (HMO), Fee-for-Service Plan (FFS) and Preferred Provider Organization (PPO).
Try and find to see if you can use health care providers outside the preferred provider program and if there is a cost to do so. If you are using an out-of-network physician, some contracts charge less for medical procedures and office visits.
In each program, find out which basic procedures are protected. Depending on the type of plan you select, the premium can differ. Most programs offer free access for health and preventive care, so check to see if these options are available in the package you want.
You may be able to start with a basic health plan if you are on a budget that includes important basic health care and upgrade to a more comprehensive medical plan as your budgets permit. There will be additional out-of-pocket expenses for a basic plan, but the premium will be smaller as well.
Good dental health is part of general wellness and more and more employees are receiving dental insurance coverage from their employees. Companies can offer their employees several dental plan options.
A fee-for-service policy is one in which the employee pays for dental services and is reimbursed by the insurance company. Many dental fee-for-service plans allow you to consult with your chosen dentist, but the services may be discounted when selecting a dentist on their preferred network of providers.
Indemnity plans pay for specific services (fillings, tooth removal, crowns, etc.) a certain fixed sum regardless of the actual service charge. Orthodontic care is not always provided, so be sure to consider a plan that includes this option when you have a child who needs braces.
Under some packages, preventive care and cleaning can be provided free of charge, so also seek this option.
If you opt to add vision insurance to your benefit plan, you need to figure out what kind of tests are covered, what out-of-pocket expenses are needed, and what kind of prescription glasses and contact lenses are covered.
Most packages will only provide one pair of prescription glasses per year, so if you want a back-up pair of eyeglasses, you may have to pay for the second pair of glasses out of pocket.
Some companies offer discount policies for vision rather than insurance for vision. You must pay for the services in full, but at a discounted price negotiated by the participating companies in the packages.
Many employers pay for their employee's life insurance, so be sure to see if this option is provided by your employer.
If you need further life insurance, you can always acquire an extra life insurance policy in addition to your company's employee insurance plan.
If you have a severe medical condition and are unable to purchase life insurance on the open market, this may be a good alternative to explore as you may be able to acquire life insurance with assured coverage through open enrollment with your employer and once you're hired.
Flexible Spending Account (FSA)
A flexible spending account helps you to save funds for medical expenses such as co-payments, deductibles, and other out-of-pocket costs. You can also use the FSA to pay for your partner or children's medical bills.
One important thing to keep in mind is that most FSA schemes are regulated by a "use it or lose it" rule. By the end of the year, you must use the money deposited in the account.
Once you enroll in insurance and add a spouse or dependent on your insurance plan, you will need to find out from your Benefits Administrator specific information about a spouse or dependent coverage.
When filling out their insurance applications, most people make mistakes and incorrect decisions. Thankfully, you can still make changes down the road. Younger employees may not need almost as many insurance plans as older workers do.
There is also a great opportunity for younger employees to have a large retirement fund. A worker who puts away a couple of thousands a year in his or her mid-20s could have more than a million upon retirement.
The trick to doing the right thing is starting young, taking out as much as you can before you find it's lacking, and keeping an eye on your decisions to make sure you modify them as circumstances change.