Seven Questions and Answers to Know Before Open Enrollment
Fall is a favorite season for many, but with so much going on, time is scarce during these months. If your American Fidelity open enrollment is coming up, you might not have had the opportunity to share information about available benefits with your employees, let alone offer any additional guidance on those options. To help your employees prepare, we’ve compiled a list of commonly asked questions and answers for you to pass along to them.
1. What’s the difference between a deductible, a premium, and an out-of-pocket maximum?
Deductible: The amount you pay for health care expenses before insurance starts to pay.
Premium: The amount you pay for your health insurance.
Out-of-Pocket Maximum: The most you pay for covered services in a plan year.
2. What are the differences between medical plans?
High Deductible Health Plan (HDHP)
Like the name suggests, this plan has a higher deductible. The monthly premiums are usually lower, but you pay more health care costs out of pocket before the insurance kicks in. HDHPs can sometimes be combined with a health savings account (HSA).
Preferred Provider Organization (PPO)
A PPO is a healthcare arrangement where medical professionals and facilities provide services to subscribed clients at reduced rates, meaning you pay less to use the suggested providers. You may use the services of any provider within their network but may pay more for visiting one out-of-network.
Health Maintenance Organization (HMO)
An HMO is a network or group that provides health insurance coverage to members for an annual or monthly fee. HMOs contract with different medical care providers, which helps keep premiums and deductibles lower. However, there are typically greater restrictions on seeing out-of-network providers, usually requiring a referral from an in-network primary care physician. If keeping your current providers is important to you, find out if they’re included in the HMO network.
3. Should I enroll in dental or vision coverage?
Since many health care plans don’t automatically include dental and vision insurance, you should consider the following:
- Do you or your dependents need glasses or contacts?
- Does anyone in your family need braces or other expensive dental work?
- Do you have money set aside for a dental emergency?
4. What is a reimbursement account, and what kind should I choose?
Reimbursement accounts are comprised of funds set aside from your paycheck to help you pay for qualified medical expenses. There are three types of medical reimbursement accounts:
Healthcare Flexible Spending Account (HCFSA)
An HCFSA is an account that allows you to save for eligible medical expenses for the current plan year. Both you and your employer may contribute funds. Your full election amount will be available on day one of the plan year, but if you don't use the funds by the end of the year, they typically won’t roll over to the following year.
Health Savings Account (HSA)
An HSA lets you save for eligible health care costs for the current plan year, and also for the future. You and your employer may both fund the account, and unused funds roll over into the next plan year. This plan must be paired with a qualified HDHP.
Health Reimbursement Arrangement (HRA)
An HRA is 100% employer-funded. You can use the funds to reimburse eligible medical expenses and to offset certain out-of-pocket costs not covered by major medical plans. Unused funds may roll over into the next plan year, as determined by your employer. You must be participating in your employer’s medical plan to participate in this arrangement.
For more on each account, visit americanfidelity.com/reimburse.
5. Can I use more than one reimbursement account?
Yes, depending on the type of reimbursement account. If you have an HSA, you may be able to pair it with one or both of the following:
Limited Purpose Flexible Spending Account (LPFSA): An LPFSA may reimburse eligible out-of-pocket vision and dental expenses. Core medical expenses would be reimbursed from your HSA.
Dependent Care Account (DCA): A DCA allows you to reimburse yourself with pre-taxed money for expenses associated with dependent care for children under age 13 or adult dependents incapable of self-care.
6. Can I change my benefits during the plan year?
If certain life events occur outside of the annual open enrollment period, you may change your coverage. Generally, you have 30 days from the date of the qualifying event to apply for or adjust coverage. The requested coverage change must relate to the qualifying event.
For a list of qualifying events, visit americanfidelity.com/changes.
7. Why would I need supplemental coverage? Isn’t major medical insurance enough?
Supplemental insurance coverage is important because it may help with expenses your major medical insurance doesn’t cover.
For example, disability insurance is designed to pay a percentage of your salary if you’re sick or injured due to a covered event and unable to work. AF™ Disability Income Insurance benefits are paid directly to you, and can be used for household expenses, car payments, or medical costs like prescriptions or deductibles. This kind of coverage could be very helpful if your disability extends beyond the sick days you’ve saved up.
Maybe you have an active lifestyle or busy family. AF™ Limited Benefit Accident Only Insurance has over 25 benefits to help cover the cost of treatments or injuries from twisted ankles, burns, bee stings, spider bites, or recreational sports activities. It also pays an annual benefit for a routine exam, including immunizations.*
These are just a couple of examples of how supplemental insurance coverage can help you protect your finances and prepare for the unexpected.
Your American Fidelity account manager can help you determine which benefits are the best fit for you and your family.