Better Benefits
Answers to Common Employee Benefit Offering Questions
Answers to Common Employee Benefit Offering Questions
Being prepared with clear responses during and after the open enrollment period helps to boost understanding and engagement.
Even the most robust communication strategy will generate questions about benefit offerings. As you prepare to support your people through benefit selections, here are some questions you may receive – and some answers to equip your people with knowledge and empower them to make informed decisions.
Although these answers are designed to support most scenarios, your specific responses may need to vary depending on your offerings and plan structure. Please note that all responses below are written as if we are speaking directly to the employee.
Health Coverage
What is the difference between a PPO and an HDHP?
We offer different medical plan types so you can make the choice that best meets your needs. Medical plans are often categorized in two ways: network access and referral requirements, and HSA or HRA access.
Network Access & Referral Requirements
| Plan type & definition | Doctor/provider choice | Primary care physician (PCP) | Seeing a specialist |
|---|---|---|---|
| HMO: Health Maintenance Organization | In-network only except for true emergencies
You may be required to use insurance-owned facilities (i.e. Kaiser) |
Must select your specific primary care physician or one might be selected for you | Insurance requires a referral from your primary care physician |
| EPO: Exclusive Provider Organization | In-network only except for true emergencies | A primary care physician selection is generally not required | Insurance usually does not require a referral from your primary care physician, but the specialist might |
| POS : Point-of-Service | In- and out-of-network care | A primary care physician selection may be required | Insurance often requires a referral from your primary care physician |
| PPO: Preferred provider organization | In- and out-of-network care | A primary care physician relationship is encouraged, but not recorded by the insurance company | Insurance often does not require a referral from your primary care physician, but the specialist might |
Note that dental plans may also be classifid as HMOs (or DHMOs) and PPOs.
HSA or HRA Access
All plan types above can come with either an HSA (Health Savings Account) or HRA (Health Reimbursement Arrangement).
| Type & definition | What to know |
|---|---|
| HRA: Health Reimbursement Arrangement |
|
| HDHP with HSA: High Deductible Health Plan with Health Savings Account | HSAs come with a qualified HDHP (sometimes called CDHP). These plans:
|
What’s a deductible, coinsurance, copay, and out-of-pocket maximum?
A deductible, coinsurance, copay, and out-of-pocket maximum help you understand your costs for care when you use your plan.
Deductible: The amount you’re responsible for paying in care expenses before your plan starts paying deductible-eligible expenses. Know what the deductible applies to. Look for items with ‘DED then you pay…’ language in your benefit guide. If you have a HDHP medical plan with HSA, all non-preventive care is subject to the deductible.
Coinsurance: After you’ve met your deductible, you’re sometimes responsible for a percentage of the medical or dental care or prescription medication received. This percentage is coinsurance.
Copay: A flat fee you pay each time you receive a copay-eligible medical, dental, or vision service or prescription medication.
Out-of-pocket maximum: The most you’ll pay for covered in-network medical care and prescription drugs in a year. This includes your deductible, coinsurance, and copays, but does not include your premium (cost for coverage).
What’s a premium? How is it different from a deductible, coinsurance, copay, or out-of-pocket maximum?
A premium is the amount you pay for coverage. You’ll pay this amount – usually out of each paycheck – regardless of whether you use the plan.
How do I know the right plan choice for me?
Most people consider care options and cost structure as they make plan choices, though only you can decide which plan option is best for you. To begin, ask yourself:
Care Options
- How much plan flexibility do you need? Are you willing to pay a higher premium (cost for coverage) to allow greater flexibility with doctors and specialists?
- Are your preferred doctors, hospitals, and providers in the plan network?
- Are you – or any of your family members – expecting surgery or any other significant care needs next year (like pregnancy, etc.)?
Cost structure:
- How much total liability are you comfortable with/can you afford?
Total maximum liability is your annual cost for coverage plus your out-of-pocket maximum. This is your ‘worst-case scenario’ for covered in-network medical care, and the amount you should budget towards. - Will you need to see any out-of-network providers?
Out-of-network care often results in balance billing – your provider may bill you the difference between what they charge and the amount your insurance pays. For medical care, balance billing is in addition to and does not count towards your out-of-pocket maximum. - What pre-tax account(s) are available with the medical plan, and how can you make the most of it/them?
Pre-Tax Accounts
What’s a Health Savings Account (HSA)?
A Health Savings Account (HSA) comes with a qualified High Deductible Health Plan (HDHP). As long as you meet IRS eligibility requirements, you can contribute pre-tax funds to the account to pay for current and future health care expenses. (Employer: do you contribute to the HSA? Highlight that here!)
An HSA is unique in that the balance never expires. The amount in your HSA always belongs to you regardless of the source of the funds, your current medical plan enrollment, or retiree/Medicare status. In most cases, you’re also able to invest a portion of your balance to earn tax-free interest.
You can always use non-invested funds in your HSA to pay for qualifying health care (medical, dental, vision, and prescription) expenses tax-free. Once you retire, you can use the balance to pay for everyday expenses as well – normal taxes will apply for these withdrawals.
The materials and the information provided are not designed or intended to be applicable to any person’s individual circumstances. These statements do not constitute an offer or solicitation in any jurisdiction. All included information and data are limited only to the inputs and other financial assumptions indicated.
What’s a Flexible Spending Account (FSA)?
A health care flexible spending account allows you to pay for qualifying health care expenses with tax-free funds that you generally contribute from each paycheck. There are two kinds of FSAs:
- Full health care FSA: pay for qualifying medical, dental, vision, and prescription expenses (not available if you’re contributing to an HSA)
- Limited purpose FSA: HSA-compatible; pay for qualifying dental and vision expenses only
FSA balances typically expire at the end of the year, though you may be able to roll over a portion of unused funds to the following year. Generally, a health care FSA can be paired with any medical or no medical plan – but you cannot have a full health care FSA and contribute to an HSA at the same time.
What’s a Health Reimbursement Arrangement (HRA)?
A health reimbursement arrangement is a special allowance of money set aside by your employer to help you pay for qualifying health care (medical, dental, vision, and prescription) expenses when you elect the HRA medical plan. The HRA comes with the medical plan and it cannot be separated. You may be able to roll unused funds into the following year – often with a total maximum balance.
Enrollment
When can I choose my benefits?
In general, there are three opportunities to select or change your benefits:
- As a new hire/when you’re first eligible: you’ll have a period of time once you’re first eligible for benefits to select your coverage for the remainder of the plan year.
- If you have a life event: changes to your life (marriage, divorce, birth, etc.) allow you to make changes to your coverage in the middle of the plan year.
- At open enrollment: your annual opportunity to review and select benefits for the following year.
What’s a life event? What does it let me do?
A life event – sometimes called a qualifying life event or qualified status change – is a significant change in your life that allows you to make changes to your benefits outside of open enrollment.
Life events are often defined as:
- Birth or adoption of a child
- Marriage or divorce (some states recognize legal separation)
- Death of a covered dependent
- Change in your or your spouse’s job or insurance coverage status
- Change in Medicaid eligibility
You usually have 30 days to change your coverage after the life event happens (60 days for changes involving Medicaid eligibility), and your coverage choice will be in effect until the end of the plan year.
Who can I cover on my benefits?
In most cases, you can cover your spouse and dependent children until age 26. Domestic partners are sometimes eligible for coverage; check with your employer.
Can I have more than one health plan?
In most cases – yes. However, consider the cost you’ll pay and the benefit you’ll receive. When you have more than one health plan, they communicate with one another through a process called coordination of benefits. Generally, this means you’ll receive the benefit of the richer of the plans for the service or claims – it does not mean you’ll get 100% coverage.
A few other things to consider:
- If you have a High Deductible Health Plan (HDHP) and are contributing to an HSA, make sure any other coverage you have is also a qualified HDHP (learn more about HSA eligibility).
- If you also have Medicare coverage and are still actively walking into work, your employee coverage will usually pay first, and Medicare will usually pay second based on the coordination of benefits described above. If you have questions about this, please contact 1-800-MEDICARE (1-800-633-4227).
For more information about having more than one health plan, please contact your insurance company.
Looking for additional information about benefits, finances, and wellness to share with your employees? Check out the OneDigital Breakroom Hub.
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