Costs to understand

  • Deductible - The dollar amount you’re responsible for paying before the insurance plan starts to pay.
  • Coinsurance - Your share of the cost of a service (usually a percentage), after you’ve met or paid the plan’s deductible.
  • Copayment - A fixed dollar amount for things such as a doctor visit or prescription drug that you must pay at the time you receive the service.
  • Out-of-Pocket Maximum - The limit or the most you’ll pay out of your own pocket for services during your insurance plan period (usually one year).
  • Pre-Tax/Post-Tax Deductions - The basis for how certain insurance premiums will be deducted from your wages, which affects your take-home pay.

More of what you need to know: There’s more to be aware of besides insurance premiums.
 

  • With medical and dental plans, look at a plan’s copayments, deductible, and coinsurance.
    • If you visit your doctor or pharmacy often, consider the copayment you’ll pay for each office visit and prescription. Copayments for less routine care like emergency room (ER) visits will be much larger.
    • Plans with a high deductible usually have lower monthly premium payments. However, you’ll need funds to cover your or any family members’ deductible (often thousands of dollars), as well as your share of coinsurance after you meet the plan’s deductible.
  • Funding a Health Savings Account (as part of a high deductible health plan) and taking advantage of supplemental health insurance can help make paying these expenses easier. Supplemental health benefits, like accident, cancer, critical illness, and hospital indemnity insurance can help cover unexpected expenses because the benefit amount you would receive can be used any way you choose.
  • You may choose to pay for certain employee benefits through payroll deduction on a pre-tax or post-tax basis. While the premium amount is the same, money deducted on a pre-tax basis isn’t subject to income tax, so you’ll see more take-home pay compared to when money is deducted on a post-tax basis. However, for disability insurance, if your employer pays the insurance premium, or the premium is paid on a pre-tax basis, the disability benefit may be subject to tax, reducing the benefit amount you receive.

Features to know

  • Guaranteed Issue - If you apply for insurance, you’re not required to answer health questions to qualify for coverage up to a certain amount.
  • Elimination Period - Also known as the waiting period, it’s the period of time before you’re eligible to receive benefits.

More of what you need to know: Make sure you understand coverage eligibility and limitations.
 

  • When you apply for some employee benefits like life, medical, and disability insurance, the insurance company may review your health and medical history to determine your eligibility for coverage. If you get coverage through work, guaranteed issue usually applies up to a certain amount. Additional amounts of coverage may require:
    • Simplified underwriting, which requires you to answer health questions, or
    • Full medical underwriting, which may require in-depth health questionnaires and physical exams, including lab work.
  • During the elimination period for disability insurance, you would not receive benefits, so be sure to create an emergency fund to pay for your mortgage and everyday expenses until your disability benefits start. Once in effect, disability benefits usually reimburse around 40%–60% of your salary.

Options to consider

  • In-Network - These are the doctors, dentists, and health care facilities who have contracted to be part of the insurance company’s network and have agreed to provide care at certain discounted rates.
  • Buy-Up - In addition to offering employees a base insurance plan, some employers may also offer plans that allow employees to obtain greater coverage — or “buy up” to a higher level of insurance on a voluntary basis.
  • Portability - If you leave your employer, you can keep your coverage and pay the insurance company directly.

More of what you need to know: Explore ways to maximize your benefits.
 

  • Look for buy-up opportunities for coverage like disability or life insurance to get extra protection to meet your specific needs.
  • Consider who’s in your medical, vision, or dental plan’s network and use an in-network doctor, dentist, or health care facility to save money.
  • Know which of your company’s benefits are portable and what the cost will be to you if you choose to continue coverage.

 

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Disclaimer

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Guardian, its subsidiaries, agents, and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation.

2018-70816