Understanding your employee benefits can feel like learning a new language. With so many terms, acronyms, and policies, it’s easy to feel overwhelmed. But don’t worry, we’ve got you covered! Here’s a breakdown of the most common benefits-related terms to help you make informed decisions about your coverage.
Health Insurance Terms
- Premium – The amount you pay for your health insurance every pay period or month, usually deducted from your paycheck.
- Deductible – The amount you must pay out of pocket for healthcare services before your insurance starts covering costs.
- Copayment (Copay) – A fixed amount you pay for a covered healthcare service, like a doctor’s visit or prescription.
- Coinsurance – The percentage of costs you share with your insurance provider after meeting your deductible. For example, if your coinsurance is 20%, you pay 20% of the bill, and your insurance covers the remaining 80%.
- Out-of-Pocket Maximum – The most you’ll have to pay in a year for covered services before your insurance covers 100% of eligible costs.
- HMO vs. PPO – HMO (Health Maintenance Organization) plans require you to use a specific network of doctors and get referrals for specialists, while PPO (Preferred Provider Organization) plans offer more flexibility but often come with higher costs.
- Network – The facilities, providers, and suppliers your health insurer or plan has contracted with to provide health care services
Flexible Spending & Health Savings Accounts
- FSA (Flexible Spending Account) – A pre-tax account for healthcare expenses. Funds must typically be used within the plan year.
- HSA (Health Savings Account) – A tax-advantaged savings account for those with high-deductible health plans (HDHPs). Unlike FSAs, HSAs roll over year to year.
- Dependent Care FSA – A pre-tax account that helps cover childcare or dependent care expenses.
- Transit/Parking FSA – An employer sponsored benefit that allows you to pay for qualified workplace mass transit (Transit FSA) and parking expenses (parking FSA) using money that is not taxed. This benefit has a monthly limit
Final Thoughts
Understanding these terms can help you make the most of your benefits. If you’re unsure about a benefit, don’t hesitate to ask your HR department for clarification. The more informed you are, the better decisions you can make for your health and future!
Questions? Contact us at info@GoCGO.com.
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