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Know Your Benefits: Health Insurance Terms You Need To Know

Health Insurance Terms You Need To Know

The health care system in the United States can be confusing. In order to get the most out of your health care benefits, you need to understand the terms used by insurance companies, the government, health plans and health care providers. This way, you can make better decisions and ultimately receive better care.

Advance Premium Tax Credit – A new tax credit provided by the Affordable Care Act to help you afford health coverage purchased through the Marketplace. Advance payments of the tax credit can be used right away to lower your monthly premium costs. If you qualify, you may choose how much advance credit to apply to your premiums each month, up to a maximum amount. If your advance payments for the year are less than the credit you’re due, you’ll get the difference as a refundable credit when you file your federal income tax return. If your advance payments are more than the amount of your credit, you must repay the excess with your tax return. Also called premium tax credit.

Affordable Care Act (ACA) – The comprehensive health care reform law enacted in March 2010. The law was enacted in two parts: The Patient Protection and Affordable Care Act was signed into law on March 23, 2010, and was amended by the Health Care and Education Reconciliation Act on March 30, 2010. The name “Affordable Care Act” is used to refer to the final, amended version of the law. Ambulatory Care – Health care services that do not require a hospital stay, such as those provided in a doctor’s office, clinic or day surgery center.

Annual Limit – A cap on the benefits your insurance company will pay in a year while you’re enrolled in a particular health insurance plan. These caps are sometimes placed on particular services, such as prescriptions or hospitalizations. Annual limits may be placed on the dollar amount of covered services or on the number of visits that will be covered for a particular service. After an annual limit is reached, you must pay all associated health care costs for the rest of the year.

Assignment of Benefits – A document you sign that allows your hospital or doctor to collect your health insurance benefits directly from your health carrier. Otherwise, you pay for treatment and the insurance company reimburses you.

Benefits – The amount of money payable by an insurance company to a claimant under the insurance policy.

Brand-name Drugs – Prescription drugs sold by a drug company under a specific name or trademark and protected by a patent. Brand-name drugs may be available by prescription or over the counter.

Broker – An independent insurance agent who works with many insurance companies to find insurance policies for his or her clients.

Cafeteria Plans – Benefit programs that help employees pay for certain expenses, such as life insurance, disability benefits, medical expenses and child care, with pre-tax dollars. Employers select the benefits that will be offered (only certain benefits can be provided), and employees use pre-tax dollars to buy the benefits they want. Employers can also make contributions to subsidize benefits. Cafeteria plans are also known as flexible benefit plans or IRS 125 Plans.

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Adoption Assistance Benefits

No one can put a price on raising a child, yet the cost of adoption can be difficult to overcome. That’s why some employers offer voluntary adoption assistance benefits to help you afford the adoption process.

Adoption assistance benefits might include advice and support with paperwork, time off while bringing a child home, reimbursement for adoption related costs or other types of assistance. Adoption  assistance benefits come in many forms but generally fall into three categories:

  1. Information resources—This assistance may include access to adoption specialists, recommendations for licensed adoption agencies and suggestions for support groups.
  2. Financial assistance—This benefit may include employer-sponsored funds for expenses associated with adoption, such as agency fees, court costs and legal fees.
  3. Parental leave—This assistance may include additional time off from work specifically to care for a newly adopted child.

If you plan to adopt a child and hope to benefit from your company’s adoption assistance program, make sure you understand the specific policies and tax implications before applying for such assistance. Speak to HR to learn more about your available resources.

The Benefits of Pet Insurance

Pet insurance is a voluntary benefit that provides coverage for most pet illnesses and accidents. It primarily focuses on unpredictable medical incidents rather than routine preventive visits.

Consider the following benefits of pet insurance:

  • It covers most unforeseen illnesses and injuries, such as cancer, tumors and surgeries. Keep in mind pet insurance generally doesn’t cover preexisting conditions or routine care or medical visits.
  • This coverage makes pet care more affordable and often easier to agree to a life-saving procedure or an emergency operation if an unforeseen medical complication arises.
  • It reduces pet-owning stressors or concerns.

Contact HR for more information about pet insurance.

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4 Tips For Maximizing Your HSA

Health savings accounts (HSAs) are an excellent tool for managing your out-of-pocket health care expenses. Consider these four strategies to make sure you are getting the most out of your HSA account:

  1. Contribute as much as you can. In 2022, the individual limit is $3,650, while the family limit is $7,300. The limits will increase in 2023 to $3,850 and $7,750, respectively.
  2. Use over-the-counter (OTC) drugs if at all feasible. HSA funds can be used for OTC drugs, so choose a generic drug over a brand-name OTC drug to help create greater cost savings.
  3. Only visit the emergency room in an emergency, and opt for in-network care. Your doctor’s office and the urgent care center are appropriate places to treat non-life-threatening conditions—and they are more cost-effective. Maximize your HSA funds by avoiding out-of-network care that typically results in higher out-of-pocket costs.
  4. Beware of medical billing errors. Medical billing errors can cost patients thousands of dollars, so reviewing charges is essential.

Always check your bill for accuracy and ask for an itemized statement. These choices can help preserve money in your HSA for years to come. Contact HR if you have questions about your HSA account or contribution limits.

Understanding Commuter Benefits

Commuter benefits help cover work transportation-related costs and are provided tax-free. Commuter benefits vary by workplace, but here are some typically covered expenses:

  • Qualified parking is parking provided at or near your workplace. It also includes parking at or near the location you commute to work using mass transit, commuter highway vehicles or carpools. It
    doesn’t include parking at or near your home.
  • Transit passes include passes, tokens, fare cards, vouchers or similar items that allow you to ride free or at a reduced rate on mass transit.
  • Vanpooling is transportation between your residence and place of employment in a commuter highway vehicle that seats at least seven adults (including the driver).

You typically enroll in commuter benefits just like other benefits, so talk to your HR representative to learn more about your available options

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