Health insurance can be challenging to understand. That’s why many are fortunate to have it as a benefit from employers. However, employees must still make some decisions when it comes to employer-based health insurance.
It’s often not enough to accept one’s employer-provided health insurance at face value. One might overlook some vital insurance information (and some pretty good benefits). Here are some things to consider when picking a health insurance plan at work.
Understand the Plans
There are two types of employer-sponsored health insurance plans: Defined benefit plans and contribution plans.
– Defined benefit plans
They are the traditional form of health insurance: The employer provides a group plan, the employee chooses what’s available, and they’re on their way.
– Defined contribution plans
They are different and will require some research on the employee’s part. Instead of providing a choice of plans, the employer provides the employee with a stipend to spend on private benefits marketplaces to purchase health insurance and other products.
One should also be aware of the types of plans available:
– Health maintenance organizations (HMOs) have rigid referral policies and network requirements.
– Preferred provider organizations (PPOs) do not require referrals and allow one to go outside their network at a higher cost.
– Exclusive provider organizations (EPOs), like HMOs, have a tight network but do not require referrals.
These are the practical aspects of health insurance that should be considered when making decisions. If one is unaware of what is available, they will encounter difficulties when the time to see a doctor comes.
Dental and Vision Insurance
Dental and vision coverage must be included as part of essential benefits for children, but adults may be on their own. The amount of the employee contribution to those plans is something else you should be aware of.
Be Adaptable With FSAs and HRAs
Some employers provide flexible spending accounts (FSAs) and health reimbursement accounts (HRAs) as additional benefits to help make healthcare more affordable.
An FSA allows one to make pre-tax contributions and use them to pay for qualified medical expenses. In contrast, HRAs are funded by the employer. If they offer high-deductible plans, they can save money on monthly premiums.
FSAs and HRAs aren’t directly related to health insurance, but one will most likely encounter them when selecting insurance plans.
