On the spectrum of exciting things to do, selecting benefits lies probably somewhere between filing taxes and getting a filling at the dentist. Whether someone is new to a job, new to the workforce, or facing open enrollment, most employees view this process as a hassle. It’s because they usually don’t have the experience or the interest in evaluating their options. Employees need a lexicon to grasp the differences between co-pay, co-insurance, deductible, HSA, and premium – all terms unique to the US health insurance system. Employees usually don’t even know where to start to select benefits. The nail in the coffin is the cost part. If only we had a nickel for every time we heard this: “You mean I have to pay premiums out of my paycheck AND co-pays when I go to the doctor AND co-insurance if I go out of network?!”
How to go about understanding benefits
Sure, as an employee, you can call a financial advisor. Or ask your coworkers. You may even start the process by calling your parents or a relative. But even those resources can be unreliable and uninformed. And when employees don’t understand their benefits options, they might as well leave money on the table. That’s not good for employees or for the company. So get started by learning a bit more about it.
Here are 8 considerations to help you navigate company benefits options and select the best coverage.
1. Ask management for a benefits summary
Employees need a baseline understanding of the benefits their company offers. See if the company can provide a summary of benefits or benefits overview. If the company doesn’t have this, employees should see if they can contact the company’s benefits broker(s) directly to ask them questions.
2. Find a trusted resource
Consider yourself lucky if your company is large enough to have a dedicated benefits professional. If you don’t have one, try talking to whoever manages the company’s HR function. This could be the owner, an operations person, or even an outside accountant. You’ll be in great shape if you can build a relationship with this person. They are usually the person who pays the insurance company’s bills.
3. Brush up on definitions
The group benefits field is filled with terms and words that aren’t familiar. Did you even know that your company’s benefits are also called “group benefits”? What’s the difference between a coinsurance and a copay? What is a deductible? What’s an out-of-pocket max? What does it mean to see an in-network provider? Using a reliable glossary to get a basic idea of what these concepts mean will be helpful in terms of planning.
4. Plan your costs
While some employees may not be familiar with benefits, every employee is familiar with their personal health and financial situation. Take a look at how much insurance you’ve used in the past. Compare that information to the coverage you’re being offered. If you know that you have certain health needs coming up, make sure to review the fine print of your coverage and ask questions if you don’t understand something.
5. Know the dates and deadlines
In addition to knowing your plan year, it’s also important to understand when you can make changes to your selections and when those changes go into effect. When it comes to company benefits, employees get locked into their selections they make for a certain period of time and then can only make changes during open enrollment or if they have a qualifying event. Effective date of coverage is also important to look out for. Different plans like medical, dental, vision, FSA, HSA, and retirement might have entirely different effective dates.
6. Know life events and changes
Do you have any important events coming up? Maybe it’s a marriage or a birth or maybe someone is turning 26 years old? These types of events have an impact on your ability to make changes to your insurance coverage. Being able to talk to someone about these changes is very important, especially if they impact your insurance.
7. Understand those ancillary plans
If you ask most employees whether they have benefits, they usually say something like “sure I have medical insurance”. Sometimes they will even say “Yes! I have great medical, dental and vision.” But so many companies offer other lines of coverage, like disability, life insurance, EAP and various types of spending accounts. These coverages can be incredibly valuable and can work with other coverage options to lower employee costs and be extremely helpful. If you aren’t aware of these other options you may be leaving money on the table.
8. Anticipate unknowns to select benefits
You may want to think of your benefits options in terms of “what ifs.” For example, ask yourself what would happen if you encountered an unplanned illness or injury. If something like this would hit your pocketbook hard, you may want to consider the Platinum Option instead of the Bronze Option. Or you may want to put a little more money into your FSA plan. Briefly thinking through these scenarios, the likelihood of them occurring, and how much they would cost, can help your employees make good benefits decisions.
As part of our Benefits Administration service under Core HR, the Suitless team works with companies and their employees to make sure benefits programs are understood and optimized. If you have a question about how to select benefits options, or if communication around your benefits needs a revamp, reach out to us at info@getsuitless.com or use our Contact Form.
