Employee Benefits Questions to Ask During Open Enrollment

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Want to get ahead during open enrollment? We will review the questions you need to ask to make sure you get the benefits coverage you need.

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It's good to review your benefits annually to make sure they are still working for you. Here are a few questions many ask during open enrollment.

What is the difference between a Preferred Provider Organization (PPO) and a Health Maintenance Organization (HMO)?

When it comes to insurance, it’s nice to have choices. PPOs and HMOs are both types of  insurance plans. In general, the differences between PPOs and HMOs have to do with:

  • Plan size network
  • Ability to see specialists
  • Plan costs
  • Out-of-network service coverage

PPO plans give you greater flexibility when picking a doctor or hospital. PPOs have a network of doctors, but there are fewer restrictions if you want to see a non-network provider. Many PPO insurance plans will pay for you to see a non-network provider but keep in mind, it may be a lower rate.

HMO plans give you access to doctors and hospitals within the network. Providers who have agreed to lower their rates for plan members and meet certain quality standards make up a network. Under an HMO, you don’t have much choice in seeing a provider outside the network, unless you want to pick up the entire tab. In addition, HMO plans typically have more restrictions on things such as the number of visits, tests, and treatments you can utilize.

What is an Embedded Deductible?

You’re likely familiar with deductibles. A deductible is the amount of money you have to pay out-of-pocket before the insurance company pays any bills on your behalf.

You may not be as familiar with an Embedded Deductible. This term simply means that a person, covered under a family plan, doesn’t have to wait for the family deductible to be met before the coinsurance kicks in for that individual. For example, if John is covered under the family plan and meets his annual deductible before the entire family deductible is met, the co-insurance will begin paying for John.

In addition, when another individual or combination of individuals meets the remaining portion of the family deductible, it would be considered satisfied.

What is an Embedded Out-of-Pocket maximum?

You’re probably also familiar with the term out-of-pocket maximum, but may be wondering what an embedded out-of-pocket-maximum is. Similar to an embedded deductible, once a covered person under a family plan reaches the individual out-of-pocket maximum that individuals remaining expenses will be paid at 100 percent, even if the family out-of-pocket has not been satisfied.

Also, once an individual or combination of individuals meets the remaining portion of the family out-of-pocket maximum, it would be considered satisfied.

How much money can I contribute to a Health Savings Account in 2019?

According to the IRS, the Health Savings Account contribution limits for 2019 are as follows:

  • Self only HSA contribution limit – $3,500
  • Family contribution limit – $7,000

What happens to the money in my HSA after I turn 55 and 65?

When you turn 55, you can continue using your account tax-free to pay for out-of-pocket health expenses.

When you enroll in Medicare, you can utilize your HSA to pay for Medicare premiums, deductibles, coinsurance and copays under any Medicare plan. Be advised, you cannot use your account to purchase Medicare supplemental insurance.

If you have retirement health benefits, you can use your HSA to pay for the premiums.

Once you turn 65, you can use your account for items other than medical expenses. Keep in mind, if you use the money for non-medical expenses, the money used will be taxed as income, but not subject to any other penalties.

If your under 65 and use your account for non-medical expenses, you’ll have to pay income tax as well as a 20% penalty on the amount you withdraw.

Hope this helps as you prepare to make the most of open enrollment this year.

Disclaimer: the content presented in this article are for informational purposes only, and is not, and must not be considered tax, investment, legal, accounting or financial planning advice, nor a recommendation as to a specific course of action. Investors should consult all available information, including fund prospectuses, and consult with appropriate tax, investment, accounting, legal, and accounting professionals, as appropriate, before making any investment or utilizing any financial planning strategy.