Open enrollment and the months leading up to it are often the busiest time of the year for benefits professionals. Along with finalizing benefit details, they’re busy gathering resources and supports that will help employees understand and choose the right benefits for them.
Once open enrollment is over, it’s time to take stock of what worked well and what additional resources employees might need. Every year, we help thousands of employees choose their benefits, engaging in personal conversations with them about what is confusing and what information they want to see. This year, we thought we’d share some of the more common open enrollment questions we received, as well as links to relevant resources. Hopefully, these give benefit professionals a head start for gathering resources this year!
Common questions employees have about health benefits
1. What is the difference between my deductible and out-of-pocket limit? How much more can I expect to pay a year beyond my deductible?
A deductible is the amount you will pay, besides the monthly premium, before your insurance company will begin contributing to your medical services. Once you reach your deductible, you will then begin paying only a percentage of your health care costs (this is called the coinsurance) until you hit your out-of-pocket limit. The out-of-pocket limit is the most you will have to pay in a year for covered, in-network services.
Importantly, copays (the amount you pay for certain prescriptions or doctor visits) do not count toward your deductible but do apply to your out-of-pocket limit.
Some insurance plans have embedded deductibles and embedded out-of-pocket limits. Get the full break down on these terms in this resource: Health Insurance Basics: Deductibles, Copays, Coinsurance, and Out-of-Pocket Limit.
2. What’s the difference between an HSA, FSA, and HRA?
These are all different types of tax-advantaged accounts that you can use to pay for some types of health care.
Health Savings Account (HSA) – is a savings account to which you and your employer (if they choose) can contribute pre-tax dollars if you are enrolled in an eligible High Deductible Health Plan (HDHP), which usually have lower premiums than a traditional plan. HSAs are portable, which means you can take it with you if/when you leave your company, and you can roll over funds from year-to-year.
Health Reimbursement Account (HRA) – is an employer-funded account used to reimburse employees for out-of-pocket medical expenses and personal health insurance premiums.
Flexible Spending Account (FSA) – is a type of savings account set up by an employer for the employee, that allows the employee to contribute a portion of pre-tax earnings to pay for qualified medical expenses, generally with a lower limit than HSAs.
Check out these resources for more details:
- Guide to Health Savings Accounts and Flexible Spending Accounts
- Chart comparing HSAs, FSAs, and HRAs
- HSAs: Benefits and Drawbacks
- How to Use an HSA
3. What are the services I don’t have to pay for? How should those factor into my plan choice decision?
Most health plans cover a number of preventive services, like vaccines and annual physicals, at zero cost. This means you don’t need to factor in the costs of those services when comparing plans.
Many prescription drugs are also covered, either through the Affordable Care Act (ACA) or through high deductible health plans to encourage their members to stay healthy and keep their costs down.
It’s important to understand what services are covered, so that you get the care you need. But a lot of people don’t understand their preventive benefits (less than 10 percent of people use their recommended preventive benefits!).
Check out these helpful resources for the details on what’s covered:
- MyHealthMath’s Preventive Health Care 101 Handout has everything employees need to learn about these no-cost, life saving benefits.
- Preventive Drug Benefits—a resource from MyHealthMath.
- HealthCare.gov lists all preventive services for adults, women, and children
4. What should I know about in and out-of-network coverage?
How much you pay for health care will depend on whether your services are in- or out-of-network. Your health insurance network is composed of the health care providers, facilities, and pharmacies that your health plan gives you access to. These in-network providers and facilities provide discounted rates for covered services under your health plan.
Out-of-network providers and facilities do not have a contract with your health insurance provider to provide discounted rates. This can result in higher costs for care. The costs for out-of-network coverage vary by the type of health plan you choose. Some health plans, such as an HMO, do not cover out-of-network providers unless in an emergency.
When choosing a health insurance plan, it’s important to consider whether the providers you will likely see are in-network. Insurance companies typically post in-network providers for their different plans on their website.
5. What are the main differences between common plans and why do I often hear that high deductible health plans are a better value?
Common health plans include:
Health Maintenance Organization (HMO): these plans typically limit coverage to a specific local network (with the exception of emergency room visits) and require an assigned primary care provider (PCP) to refer you to any specialist care. Typically, HMOs are less expensive in terms of premiums and deductibles.
Preferred Provider Organization (PPO): With PPOs, you pay less if you use providers in the plan’s network, but you also typically have out-of-network coverage as well. While more flexible than an HMO, a PPO typically comes with higher premiums.
Point of Service (POS): Like an HMO, POS plans require you to get a referral from your PCP to see a specialist. However, unlike an HMO, they do offer some out-of-network coverage, though typically with a higher copay.
Exclusive Provider Organization (EPO): With an EPO, you typically do not need a PCP to refer you to a specialist, so long as the service is in network. However, there is no out-of-network coverage (except in an emergency).
High deductible health plans (HDHPs) have higher deductibles than traditional health plans as well as much lower premiums. Any of the above plan types can qualify as an HDHP. Your specific health needs will determine whether an HDHP is the right fit. Some of the main benefits of these plans include:
- Health savings accounts (HSA): HDHPs come with the option of opening an HSA, a tax-advantaged savings account that lets you pay for qualified medical expenses. Money in HSAs rolls over year-over-year and stay with you when you change jobs, which means your HSA never goes to waste.
- Lower monthly premium costs: When you overpay on premiums, you never see that money again. But with a high deductible plan, you can pay less in premiums and then contribute that money to an HSA where it grows tax free.
- Employers HSA contributions: Often, employers contribute money to employees’ HSAs, which helps further reduce employees’ cost burden.
Resource: Use this guide to health insurance plans to understand the different coverage options.
Looking for more support to help employees understand their plan options? Employers who partner with MyHealthMath receive custom communications plans that help employees understand their specific benefits. Learn more about decision support here.