Insurance

How do I Pick My Insurance if I Have a Choice at Work

Choosing a health plan at work can be confusing and often overwhelming. The specifics will vary with each employer, but there are ways employees can evaluate their options to find their best mix of cost and coverage.

Picking Insurance

Cost
Cost for the employee falls into two categories:
1. Up-front premiums.
2. Charges at the time of service.

The premium is the amount taken out of each paycheck for the employee’s share of the insurance company’s charge for the plan. Most employer plans are designed so that premiums are deducted pre-tax, meaning the employee saves on federal income and Social Security taxes and possibly also state income taxes.

Charges at the time of treatment are the out-of-pocket amounts patients must pay to receive medical services. Co-pays, deductibles, and co-insurance can vary a lot depending on the chosen plan and services used. In evaluating this factor, the employee must remember that, under healthcare reform, any service designated by the federal government as preventative should be provided at no charge to the patient.

The cost factor in choosing a plan often comes down to balancing higher premium cost against lower charges for treatment and vice versa. But this relationship between premiums and out-of-pocket does not always hold because of the variable of coverage.

Coverage
Depending on plan design, coverage will vary among plans in multiple aspects:
1. Is a service covered at all?
2. Is there a cap on the service (number of visits, frequency of tests, etc.)?
3. How much flexibility does the patient have in choosing the provider or opting for a procedure?
4. How often are referrals and preauthorizations required?

Don’t assume a service is covered by all plans just because it is covered by one. If an individual plans to use a particular service, she should review all the plans she is considering to make sure coverage is available for that service.

Perhaps the service is covered but the plan puts a limit on the number of visits. The employee should compare any such limits with his anticipated use of the service. If the plan will not cover his full utilization, the employee must determine if, for him, the extra out-of-pocket expense is worth the service or if another plan is the better approach. Depending on the employer, the employee might also have options such as a Flexible Spending Account (FSA), a mechanism for the employee to set aside pre-tax dollars to use for any medical expenses not covered by insurance.

As a general rule, the more flexibility the patient has to choose doctors and services without getting a referral or preauthorization the higher the premium cost. Plans can range from the HMO, which requires all medical services be arranged through a primary care physician, to a traditional indemnity plan, which places almost no restrictions on where the employee can seek care. The employee must look at her own situation to decide how much choice and flexibility she is willing to pay for relative to the other factors.

Should I Use a High Deductible Health Care Plan?

Expenses for medical services can be very costly these days. For a person to go without health insurance is a dangerous financial risk. If a major illness or accident occurs a family can find themselves facing enormous medical bills. Medical expenses quickly add up and the inability to pay them can wipe out someone’s finances entirely. Many hospitals refuse to see patients who are uninsured unless it is a dire emergency.

At this point the patient is usually just stabilized for transport to another hospital that accepts the uninsured. Often people choose to take the risk of going without insurance because they think that they will not be able to afford the insurance premiums. Or they simply choose to take the gamble of going without health insurance because they are normally healthy and seldom need to seek medical care. Most health insurance policies offer many different packages to fit a variety of budgets. Health insurance deductibles affect the amount required for the premium, choosing a higher deductible will result in a lower premium.

This option is better than having no insurance at all. With a higher deductible a person has more out of pocket expenditure initially; however once that deductible is met the insurance will then cover whatever portion of the expenses they are required to pay. The insurance policy will specify the exact amounts of the deductible, what procedures are covered by the insurance, and what portion the insurance will pay. Most people are surprised to find out how quickly they can meet their deductible within a few physician office visits. If a major illness strikes and hospitalization is required that deductible could be met in as little as one day. A bill for the deductible amount is going to always be a better option than having to pay the entire bill for a hospital stay out of pocket.

One benefit to having a deductible is that a person knows exactly what amount they will be responsible for paying. There will not be any big surprises because they know what to expect. For people living paycheck to paycheck surprise bills can really throw off their budget. By knowing the exact amount required to meet the insurance deductible they can plan accordingly. High deductible plans are a great option for those looking to save money on insurance premiums and most people are in a safe position to take advantage of these savings.

People with chronic illnesses such as diabetes might find it more beneficial to go with a lower deductible, however for those who are generally healthy there is no need to pay a high premium for insurance that they may not even use.

Another benefit to having a high deductible is being a healthier person. Knowing that they have a high deductible often encourages people to take better care of themselves to avoid getting sick in the first place. This is a win-win situation, they are saving money on their health insurance premiums while getting healthier in the process.

Do Young Adults Need Life Insurance?

Life insurance is not always a topic in which families take a moment to sit down and talk about. It is almost a taboo subject; a horrifying prospect for parents, and young adults tend to think death only happens to the old. Life insurance can greatly aid families in this time of grief. Those that have the added stress of financial complications struggle more through this difficult time, something that can be avoided. Families can feel secure that they can provide the best service for their passed loved ones without financial burden.

young adults life insurance

Young adults also tend to think they can wait until they find a job, in which the employer will provide them with life insurance as an added benefit; however, while those types of life insurance policies are helpful they usually do not give quite enough coverage. A little research will quickly show life insurance companies can easily assist young adults in finding the right policy to fit their needs and lifestyle.

There are many other advantages to a young adult acquiring life insurance besides the financial assistance and peace of mind for family members and loved ones. Applying for life insurance is easier when you are young and in good health, options for different policies are broader and chances of being accepted into them greater. Also keep in mind the younger the applicant the cheaper the policy can be with a greater pay out.

A benefit of a policy that has a larger pay out is the ability to help with the future of college loans for children, payments for mortgages and paying off any debt that may have been accrued. A life insurance policy is an essential in assisting families and having security that they will continue to be taken care of after one is gone.

Another added benefit of a young adult obtaining a life insurance policy is contribution to a retirement fund. Some life policies offer a broad range of products including a nest egg for retiring, buying a home or paying off a large debt. One way a policy like this works is, the insured individual pays a monthly amount that is then invested by the company. The money earned on the investments are allowed to be used by the insured in anyway they so choose, it is a great to have money aside for a retirement fund.

In reality no one wishes to ever use their life insurance policy early; however by remembering it is truly for the long term benefit of family, the decision becomes clear. A young adult can acquire a better policy, have more security for their family and even have security for themselves in retirement and creating a nest egg. Realize by speaking with a young adult about life insurance it is not only about the uncomfortable topic of death but, a smart choice for an individual to ensure peace of mind for themselves and loved ones.

Do Young Adults Need Disability Insurance?

Many things go through the minds of young adults, but seldom do they think of being grievously ill or being prepared for the worst. Usually it is later life when these things are considered and dealt with accordingly. The chances of becoming disabled are considered remote, and therefore not something of which to be concerned.
disability insurance

This leaves many young adults unprepared for such an instance. Unfortunately it is in these years when most people are actually at a higher risk of a disabling injury. Everyone of working age needs to plan ahead of time to see that their bills would be paid if they were to become disabled.

Accidents and illness could potentially cause long lasting or even permanent disability. In the event of temporary disability, a policy would provide a portion of income that would help get bills paid until the illness has passed. The loss of employment resulting in no income for just a few months can have devastating financial consequences for the young adult and their family.

A big benefit in getting disability insurance while young is the reduced cost over getting it later in life. It may also be possible to get a policy during this time that cannot be cancelled by the company. It makes sound financial sense as it stays in force as long as the premiums are met in a timely manner. A policy such as this provides lifelong protection.

It’s no secret that a change in health comes with age. Medical history will play a big role in whether or not a person will qualify for disability insurance. Any kind of medical history will make an increase in the amount paid in premiums. This is where a policy purchase while in the health of youth makes so much sense.

Employers are the first place anyone should begin for any type of insurance. It could be readily available as an option in the company group insurance. Employees are responsible for inquiring about potential benefits they may qualify for as a current company employee. A quick trip to the human resources department will reveal what type of plans are available that can be automatically be deducted from earnings.

Most people are seemingly at their best during the young adult years. It is easy to overlook certain things at this age, particularly when it comes to topics of injury or death. However, it is the precise time to get prepared for all of the things that can catch us off guard. Disability insurance is not just for the elderly or frail. It is for all adults, young or old. These are the individuals that are smart enough to know they need it to take care of themselves should an unfortunate event occur.