Do you freeze whenever someone asks you about health benefits? If you’re an employer that offers health insurance, you’re not alone.
To make things a little easier, use this Q&A to quickly surface answers for whatever questions come your way.
Q. Should I get an HMO or PPO?
A. The biggest difference between HMOs and PPOs is around flexibility and price. Only by weighing both of these factors will you realize what’s a better fit for you.
With an HMO, you must select a primary care provider from a network of doctors. That provider will refer you to other in-network practitioners for any specialized care you may need. This means that you can’t just go to any doctor on a whim — they have to be preapproved by your primary provider.
In terms of price, HMOs tend to have lower out-of-pocket costs than PPOs. With a PPO, you don’t need a primary care doctor. In fact, you can pop into most doctors’ offices and facilities without a referral, although, you will pay less for services from providers who are in network.
Keep in mind that PPOs usually have higher overall out-of pocket costs than HMOs.
Q. How will my health benefits impact me come tax time?
A. The amount you pay for your premium is subtracted from your total pay before any State, Federal, and Medicare taxes are deducted. This means your taxes are lower, because the amount of income you’re taxed on is reduced.
To see if your premiums are taken out pre-tax, look at the Medicare and FICA lines on your pay stub.
- Is your FICA income more than your withholding income? Then your premiums are taken out before taxes and cannot be claimed as qualified medical expenses on your return.
- Is your FICA and withholding income the same? Then your premium is taken out after taxes and you can claim it as a qualified medical expense.
If you have any other questions about the implications of benefits, remember to talk to a licensed tax professional.
Q. When can I enroll in health benefits?
A. During our plan’s open enrollment period. This phase happens once a year in the month before we’re up for renewal.
If for some reason you miss open enrollment, you have two options: 1) wait for next year, or 2) enroll during a special period after you have a qualifying life event (QLE).
A QLE is when something momentous happens in your life. Think marriages, births, new jobs, and other big occasions. Each of these events entitles you to a special enrollment period, which usually lasts for 30 days after it occurred.
Q. What’s the difference between my deductible and premium?
A. Your deductible is how much you pay for medical care before your insurance kicks in. So if you have a $1,000 deductible, you will have to spend $1,000 of your own money until your insurance starts footing the bill.
Your premium is the monthly membership fee you pay in exchange for health coverage.
Usually, if your plan has a higher deductible, your premium is lower. And if your plan has a lower deductible — you guessed it, your premium will probably be higher.
Additional plan-specific questions to brush up on
Your employees will also quiz you on things that are completely dependent on the plan they have. Since these questions are so specific, they’re best left for either you or your broker to answer.
In some cases, your team can dig up these answers on their own by calling the number on the back of their insurance cards or through their carrier’s online portal.
What you should be able to answer
Knowing the basic offerings of your benefits package will help you field questions like:
- Can I choose my plan? Or do you choose for me?
- Can I take advantage of other benefits, like vision, dental, or a 401(k)?
- Do we have any pre-negotiated wellness discounts?
What your broker should be able to answer
Your health insurance broker knows the ins and outs of your plan. They’re also another go-to person on your HR team that employees can confide in without feeling weird.
For any of the questions below, point folks to your broker:
- Do I have a defined contribution plan?
- How much do I have to contribute to my premium each pay period?
- What’s included in my deductible?
- Will the plan work for my current situation? If I get married? Have a baby?
- What happens if I have to go to the emergency room?*
- How will the plan work if I have a pre-existing condition?
- Is there a monthly premium? How much?*
- How much is my deductible and out-of-pocket maximum?*
- Is my doctor in network?*
Has your team asked anything we missed? Let us know at [email protected]