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With consumers playing an increasing role in personalizing their health care benefits package, it is important to be aware of additional options employers may offer. Other than the basic health benefits package, there are now other forms of medical coverage to consider. When making key career decisions, remember to seriously consider benefits packages and what they include. Additional options may include:
Dental Plans: In 2007, only half of employers offering health benefits offered or contributed to dental benefits, so if your employer offers a dental plan, consider yourself lucky. It's a great benefit, as non-routine dental procedures can be quite expensive. And just think — dental coverage removes at least one excuse for not visiting the dentist regularly.
Disability: Make sure your insurance plan will provide for you and your family in the event of a disabling illness or injury. The plan should also have programs that help you return to a productive and fulfilling life.
Discount Programs: Some health plans include discount programs to help you pay for nontraditional services or products that could improve your health. Your plan may offer reduced rates for gym memberships and alternative therapies that aren't typically covered, such as acupuncture and nutritional counselors. Some plans offer discount programs for other services such as dental, vision, disability and long term care insurance. It is also a good idea to find out if certain health care products may also be offered at a discount, such as vitamins and nutritional supplements.
Chronic Condition Coverage: If you have a chronic condition, it is very important to determine if your employer offers the coverage you need. Review the health plan to see if there is anything missing that you need in order to manage your condition. Find out if doctor's visits are covered, both those that are routine checkups and those that are more frequent. It is also important to determine if your plan offers chronic condition coverage, and make sure to ask what the annual maximum is. Some insurance plans offer specific programs for people with chronic conditions to help manage their illness. This may be a deciding factor in choosing the best health benefits for you.
Employee (Personal) Assistance Programs (EAPs): Many companies offer EAPs, in order to provide mental health services. Employees can speak confidentially with a consultant over the telephone to determine the type of assistance needed. Once this assessment is made, the employee can schedule in-person sessions with a counselor listed on his/her insurance plan. If the employee finds a counselor who is not listed on the plan, the first several visits are covered, but then the employee is responsible for full payment for subsequent visits. These services can be a first step for coping with difficult personal issues such as work/life balance, family problems, substance abuse, depression or financial difficulties.
Flexible Spending Accounts (FSA)/Section 125 plans: FSAs, which are governed by Section 125 of the Internal Revenue Code, allow for you to save — on a pre-tax basis — for premiums, unexpected medical costs, benefits not covered by your employer-provided insurance package or expenses associated with the care of dependents. FSAs are subject to a "use it or lose it" provision; meaning funds must be used in the year they are accrued. Throughout the U.S., approximately 20 percent of small firms (3-199 workers) and 70 percent of large firms (200 or more workers) offer Flexible Spending Accounts.
It can be difficult to estimate how much money you need to invest in your FSA. Here are some steps to help you determine how to plan ahead:
During Open Enrollment each year, decide if you want to participate in an FSA and if you do, make a list of monthly and annual expenses that you typically have during the year. These expenses include, but aren't limited to, things like:
- Chiropractic Treatment
- Contact Lenses/Saline Solution
- Co-payments
- Deductibles
- Eyeglasses
- Hearing Aids
- Hearing Exams
- LASIK Surgery
- Laboratory Fees
- Prescribed Medicines
- Psychiatric Treatment
- Routine Physicals
Ask your employer for a worksheet to help you itemize your expenses. If they don't have one, ask your FSA administrator or make your own list.
Add up the total monthly expenses and multiply the amount by 12 (for 12 months) to determine your plan year cost.
Add up the total annual expenses.
Then add the monthly and annual expenses together and divide this number by the number of pay periods. If you don't know the number of pay periods, ask your HR director how many you have.
This amount is what you should put in your FSA. But, remember to be conservative in your estimation since you won't be able to get the money back!
Keep in mind any changes in family status such as marriage, death of a spouse or birth of child.
Health Reimbursement Arrangements (HRAs): HRAs are an employer-funded health benefits account set aside for qualified medical expenses. This type of fund is usually combined with a deductible-based health plan. Unused balances roll over from year to year while you remain employed by the company. Taking advantage of an HRA is a good way to save money for health care expenses.
Health Savings Accounts (HSAs): One way to achieve this control is to participate in an HSA, which is a tax-advantaged savings account for those who have a high-deductible health plan. You can make tax-deductible contributions, and your employer can make contributions that will be excludable from income and wages. Earnings grow tax-free and withdrawals for qualified medical expenses are tax-free as well. Unused HSA funds can be rolled over from year to year, are portable and can be used into retirement. According to a Plan for Your HealthSM survey, the majority of women who have recently changed jobs (59 percent) express an interest in having more control of their health care decisions.
Life Insurance: Having life insurance is an important way to protect your family in case anything should happen to you. When life insurance is provided through a group, such as your employer, it is usually more affordable.
Long Term Care: With improvements in technology and health care, Americans live longer today than ever before — but they are not always healthy in their later years. Long term care will give you financial assistance in the event that you need custodial care in your later years. The younger you are when you buy long term care insurance, the cheaper it is, so look into it as soon as possible.
Prescription Drug Plans: This option can be a very important benefit if you have children or chronic conditions that need regular treatment or medicine. Plans often cover a certain list of approved medications (a formulary) for a co-payment, while others reimburse you for a percentage of your costs after you've paid full price at your own pharmacy. It's very important to know what your choices are for prescription drug coverage before you have an emergency.
Vision Coverage: This coverage can include annual eye exams and a percentage of your frame and prescription lens or contact lens costs every 24 months.