Understanding Your Health Insurance, Part I

When it comes to health insurance, we’re fortunate to have a variety of choices that enable us to select the plan that is best for our families and us. So, how do you make that choice? The first step is to understand health plans and how to use them.

First, the basics: Some people don’t have access to a group health insurance plan through an employer (if they are unemployed or self-employed, for example). These people can purchase individual health insurance, which would cover them and their families.

CDPHP^® offers group health plans; benefit options, including vision and dental; funding accounts; individual insurance; Healthy New York; government plans; and Medicare plans. Check them out here. Below, we’ll break down what they mean and how you can select what’s most comprehensive and cost-effective for your needs.

You’ll hear a lot about deductibles. A deductible is a way for you to pay a portion of your medical costs each year before your insurance picks up the tab. Usually, if you have a higher deductible, it means you have a lower premium. CDPHP offers varying levels of deductibles based on your plan options. If you are choosing between a lower premium and a lower deductible, ask yourself these questions:

• Do I expect to be financially able to pay this deductible in the upcoming year?
• How is my overall health? Can I estimate my medical expenses?
• Am I comfortable paying my deductible before I begin to use my insurance?

Group health plans
A group health plan is selected by your employer. Often, employers will offer options to employees who can then choose their preferred plan. In other situations, your employer will offer a single plan, and you can determine how to maximize it to meet your needs. Group health plans can include an exclusive provider organization (EPO), preferred provider organization (PPO), health maintenance organization (HMO), high-deductible health plans, Healthy New York, and group Medicare. In part II of our continuing series on understanding your health insurance, we’ll explore each of these options more thoroughly so that you know what they include and how they are similar and different.

Benefit options
Health care is more than just doctor visits. We understand that your dental and vision coverage is an essential part of your insurance plan, too. For large group plans, your employer can select a vision rider. Pediatric vision is included in all small group plans, and adult vision is included for most. CDPHP works with Delta Dental to administer dental benefits.

Funding accounts
A health reimbursement arrangement (HRA) is sanctioned by the IRS as a tax-advantaged employer health benefit plan that reimburses employees for out-of-pocket medical expenses and health insurance premiums. These arrangements are funded by the employer, which sets up the reimbursement limits. In other words, when a reimbursable expense occurs, the employer repays the employee directly and tax-free after the employee has paid the expense.

The employer sets up a flexible spending account (FSA), also known as a “cafeteria plan.” This means that the employee can set aside a portion of his or her wages to pay for specific expenses, which can include medical expenses, dependent care, or other eligible expenses. The money that is deducted from the employee’s paycheck to cover these expenses is not subject to payroll taxes. If the employee doesn’t spend the money in the account by the end of the year, he or she can carry over up to $500 for use the following year.

A health savings account (HSA) is owned by the individual (not by the employer), which differentiates it from an HRA. You can use an HSA to pay for qualified medical expenses without federal tax penalty. Any unspent money can roll over from year to year. Plus, the remaining balance can be transferred to a new job or retirement fund. Qualified medical expenses include doctor visits, prescription drugs, dental care, and some medical supplies.

Our goal is to help you choose the right plan and take full advantage of your benefits. For more information on what CDPHP has to offer, check out the get the most from your coverage section on our website.