Couple Insurance Planning
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Couples with two sets of insurance: how to choose whose plan to use?

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You’re a couple with two jobs, and if you’re truly fortunate, two different company benefits plans from which to choose. However, it’s likely that each company offers a different range of choices and features. So how do you pick which benefits to use?

The number one piece of advice is to gather the information on your insurance plans for a side-by-side comparison. Then, examine your joint benefits as a totality. Look at each package as its own separate financial offering, and whenever possible, pick the best of both offerings.

 

When comparing insurance plans, consider each piece of protection separately. 

  • 1

    Medical insurance. First, check to make sure your spouse and immediate family members can be covered under your plan. Then, compare out-of-pocket costs in each medical plan, like your deductibles (the amount you must pay out-of-pocket each year before your insurance provider begins to cover costs) and co-pays (the portion of medical costs that you pay for office visits, procedures, prescriptions, etc. even after your annual deductible has been met). The question as to which plan fits your needs better will hinge on a number of questions that need to be answered before deciding. Look into the difference in costs if you prefer to use doctors who aren’t part of your network, and check to see if prescriptions are covered in each insurance plan. Find out if referrals are needed by a primary care doctor before seeing a specialist. Make sure to consider your current health situation before choosing the best plan. If one or both of you plans to see the doctor a lot in the coming year (for instance, for a pregnancy), review the services that the different plans cover to choose the best option for your circumstances. Check to see if either of your employers offer supplemental health insurance, like critical illness or accident insurance, which can offset the cost of your deductible and cover things your medical insurance may not.

  • 2

    Health Accounts: One or both of you may have an account set up by your employer to help pay for healthcare expenses in a tax advantaged way. Look into what options are offered to both of you, and compare the advantages when insurance planning. If one of you is offered a Flexible Spending Account (FSA), determine whether or not there’s an annual “cap” or maximum amount you’re allowed to put in, and what types of deductibles, co-pays, and services can be paid from the fund. Compare the FSA with a Health Savings Account (HSA) if it’s offered by either employer. An HSA may be funded in part by your employer, and can be used similarly to an FSA. Compare the key differences – an HSA carries over your balance year to year, where an FSA may expire at the end of each year. Also take a look at the limits that can be added into the account. If you foresee expensive health events in the near future, consider adding more money to the account with the higher limit. 

  • 3

    Dental and Vision Plans. First, see if you can add your spouse and any dependents to both plans. If so, compare the costs and benefits of each plan. It may end up being more efficient for you to both keep individual dental insurance plans if you each have one, rather than go into one plan as a married couple. Plans usually have a maximum limit each year that you’re allowed to claim, after which you’ll have to pick up the costs out-of- pocket, or through your FSA/HSA account. When comparing dental and vision plans, review the services they cover. With vision insurance, for example, some plans allow for new lenses and frames every 12 months, but some plans allow only lenses every 12 months and frames every 24 months, or both every 24 months. If either of these plans come with extra value, like a college tuition benefit that will add money to a savings account for your child’s education, make sure to factor that into your decision.

  • 4

    Employer provided Disability Insurance (DI). This valuable benefit pays you money if you’re too sick or injured to work. While you will not be able to add your spouse to your plan, it’s important to make sure that you’re both covered independently so that if either one of you needs to use the insurance, the family will have enough income replaced. Find out whether your coverage at work includes short-term disability, which is likely to cover 40-60% of your income for a certain amount of time. Decide if the coverage each of you will get is enough to meet your true expenses, and if not, consider looking into supplemental DI policies, which are plans to increase your coverage, even if you have to pay the difference from your own pockets. Some employers will also offer Employee Assistance Programs to help you get back to work after an injury or accident, which is a valuable added benefit to look into when insurance planning.

  • 5

    Employer provided life insurance. When reviewing life insurance policies, figure out how well--and for how long--the insurance benefits available to you would cover your family’s real expenses if you were to pass away. Couples should weigh each policy, both as a couple and as two individuals. If there’s a permanent life insurance option offered through work that you can take with you after you leave your job, this could be advantageous in establishing a long-term savings plan for the entire family. 

  • 6

    Retirement plans. Virtually all retirement plans tend to work on the principle of setting aside gradual increments from each paycheck over time. These accumulate interest payments and grow into a significant asset.  If either--or both – of you are fortunate enough to have “employer matching,” whereby your employer adds a matching sum of money to your own contributions, make sure to take advantage of the benefit by contributing at least as much as the match. Also look at possible “vesting” requirements. If one person’s plan will lead to an important contribution from the employer after reaching a benchmark such as five years, consider adding more money to this account to take full advantage of the benefit. It’s also a good idea to make sure you’re both named as beneficiaries of your accounts. 

The benefits you get at work are an important part of your overall financial, physical, and emotional well-being. Review all your benefits carefully, including components such as 401(k) plans, health insurance, transportation subsidies, vesting, and other incentives such as stock options, etc.

Ask for details from your respective HR departments, and go over the policies yourselves.  Ideally when insurance planning, consider consulting a professional that can help you figure out the real costs and practicality of the services and protection offered – both short and long term. 

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1Christine Lamontagne, “Should I Choose A High Or Low Deductible Health Insurance Plan?” Forbes.com, Dec. 9, 2014  
 

 2Bobbie Sage, “Coordination of Benefits,” About.com, July 28, 2016.