Picture this: You’ve got a new message in your inbox. It reads: “Open Enrollment is Fast Approaching! Are you ready?”
How do you react? Are you excited to make sure your benefits package is up to date? Or are you like 48% of people who would rather do something unpleasant like walk on hot coals instead of completing their annual enrollments? (Yes, that’s an actual stat.)
Your lifestyle sees changes that should cause you to revisit your benefits at least once a year. Getting a raise could mean making an adjustment to your retirement plan. Growing your family means you might need to consider disability insurance. No matter what changes happen, it pays to make sure you’re in the best financial situation heading into the new year.
People who know this still shy away from updating their benefits annually. It may not stress them out, but they also might not understand what they’re reading. That’s why we’re here to give you a quick primer to help you better prepare for the enrollment ahead. Here are five terms you should understand going into your next open enrollment:
1. Voluntary Benefits
Benefits you have the option to enroll in.
Voluntary benefits can give you peace of mind for almost any situation.
It’s required for almost everybody in the United States of America to enroll in a medical insurance policy. If you don’t secure one through your employer you have the option to get one independently or you will be penalized with a fee. Unlike medical insurance, you have the option to enroll in the likes of disability insurance, identity theft protection, or pet insurance. Voluntary benefits are policies you have the choice to enroll in.
2. Pre-existing Condition
A condition or health issue that you had before your coverage start date.
Your employee benefits are there to protect you if the worst were to happen. Not if it already did happen. Illnesses and diseases like lupus and cancer are examples of pre-existing conditions you’d have to disclose with the insurance carrier as you’re signing up for coverage. It pays to plan ahead for your employee benefits. For example, if you’re planning on expanding your family, you would likely need to enroll in disability insurance before you get pregnant.
3. Monthly Premium
The amount you pay for your insurance each month.
Netflix wouldn’t let you watch The Office for the fifth time if you didn’t pay for their service, right? Same goes for your insurance. Think of the premium as your membership payment; If you keep paying the monthly charge, you’ll get to take advantage of the savings that come along with something like dental or vision insurance.
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The amount you need to pay before your expenses are covered for you.
The deductible is the amount of money you need to pay out of pocket each year before your insurance starts to cover your medical costs. For example, if you are looking to enroll in a low deductible medical policy and the limit is $2,000, you would have to pay for the first $2,000 out of pocket. Everything after that is usually covered by your carrier.
5. Health Savings Account (HSA)
A tax-free piggy bank that you can only break into for qualified medical expenses.
A health savings account (HSA) is a tax-advantaged medical savings account available to taxpayers in the United States who are enrolled in a high-deductible health plan (HDHP). The funds contributed to an account are not subject to federal income tax at the time of deposit. Most HSA’s come with a debit card that makes the payment and accounting easy. Most medical, dental, and vision expenses are qualified expenses you can pay for with your HSA account.
Are there other open enrollment terms that are confusing you? Tweet us @mgmbenefits or leave a comment below to get some help from us!
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