If you’re like most HR departments around the country, you’re on the tail end of taking a bit of a breather in Q1, seemingly having just completed yet another fall open enrollment.
Our benefit hotline specialists fielded thousands of calls in Q4 of last year. We thought it might be helpful if we recapped some of the more popular questions and answers, some of which change from year-to-year while others are perennial favorites.
As you might expect, this year we fielded a considerable number of questions about High Deductible Health Plans (HDHPs) and Health Savings Accounts (HSAs). We also took a considerable number of calls on Medicare, Limited Purpose FSAs and other hot topics.
Distributing these FAQs to your workforce or repurposing them in next year’s open enrollment communications and employee benefits guides should go a long way to helping reduce call volume into your HR department.
Listed below are the first 15 on our list. You can access 55 more by clicking here to receive our downloadable guide.
15 Important Questions From This Past Year's Open Enrollment Season
Q1: What’s the difference between a PPO and an HDHP?
A1: This is a common question. PPO refers to the network structure of a plan, whereas HDHP refers to its pay structure. An HDHP can be a PPO (or an HMO, POS or EPO). A high deductible health plan simply works differently than more traditional plans in that there are no copays — you pay everything out-of-pocket until you reach your deductible. After that, the plans coinsurance kicks-in, and the insurer picks up a percentage of the bills until you reach your out-of-pocket maximum.
Q2: What is telemedicine?
A2: Telemedicine is a service included in some insurance plans that allows policyholders to speak to doctors on the phone (without a copay) instead of making an appointment with a primary care physician. A surprising amount of illnesses can be diagnosed over the phone (even moreso by video call) and then medicine can be called into your local pharmacy, if necessary.
Q3: How much can I contribute to my HSA?
A3: In 2018, the maximum contribution amount (calculated by adding together both optional employer and employee contributions) is $3,450 for individual coverage and $6,850 for family coverage (this family amount was just recently reduced to this amount by the IRS from $6,900 originally). These amounts are set and adjusted annually by the IRS. If you are age 55 or older, you can make an additional $1,000 in catch-up contributions. Remember that not all health plans with a high deductible are HSA-qualified, so before you enroll in a plan, make sure this tax benefit is included.
Q4: What’s an embedded deductible?
A4: The term ‘embedded deductible’ means that an individual doesn’t have to meet the family deductible in order for coinsurance to kick in. Once a person covered under a family plan reaches the individual deductible, all covered expenses for that individual will be paid at the coinsurance amount even when the family deductible has not been satisfied. Once another person or a combination of persons meet the remaining portion, the family deductible would be considered satisfied.
Q5: What’s an embedded out-of-pocket maximum?
A5: An embedded out-of-pocket maximum works in the same way an embedded deductible works. Once a person covered under a family plan reaches the individual out-of-pocket maximum, all covered expenses for that individual will be paid at 100% even when the family out-of-pocket maximum has not been satisfied. Once another person or a combination of persons meet the remaining portion, the family out-of-pocket maximum would be considered satisfied.
Q6: What is a Limited Purpose FSA (LPFSA)?
A6: A Limited Purpose FSA (LPFSA) is a tax-advantaged flexible spending account that can be used to reimburse participants for eligible dental and vision expenses incurred by employees or their covered spouses and qualified tax dependents. Unlike a standard Healthcare FSA, a LPFSA cannot be used to reimburse medical expenses. A LPFSA is available only to employees who are enrolled in a High Deductible Health Plan (HDHP) and can be used in conjunction with a Health Savings Account (HSA). Note that by law, employees cannot enroll in a standard Healthcare FSA if they are enrolled in a Qualified HDHP.
Q7: What happens to the money in my HSA after I turn age 65?
A7: You can continue to use your account tax-free for out-of-pocket health expenses. When you enroll in Medicare, you can use your account to pay Medicare premiums, deductibles, copays, and coinsurance under any part of Medicare. If you have retiree health benefits through your former employer, you can also use your account to pay for your share of retiree medical insurance premiums. The one expense you cannot use your account for is to purchase a Medicare supplemental insurance or “Medigap” policy. Once you turn age 65, you can also use your account to pay for things other than medical expenses. If used for other expenses, the amount withdrawn will be taxable as income but will not be subject to any other penalties. Individuals under age 65 who use their accounts for non-medical expenses must pay income tax and a 20% penalty on the amount withdrawn.
Q8: How do I make sure my preventive care visit is 100% covered?
A8: If your health insurance plan is ACA-compliant, it should be covered completely. All preventative care visits must be covered by insurance, free of charge, regardless of whether you’ve met your deductible.
Before you see the doctor, check to make sure the type of visit you’re going in for is covered under preventive care according to the ACA. Adults and children ages 3 and up are allowed to get a free physical every year. Children under the age of one are allowed to see the doctor six times and children between the ages of one and 3 will see the doctor five times.
Q9: How do deductibles and out-of-pocket maximums work?
A9: Your deductible is the amount you must contribute prior to your insurance kicking in. In the case of high deductible health plans, everything comes out of your pocket until you hit this number, at which point co-insurance kicks in until you reach your out-of-pocket maximum.
In the case of more traditional health plans, other services may be covered beforehand (with a copay), such as primary care or specialist visits. The out-of-pocket maximum is the highest amount you can be expected to pay in out-of-pocket expenses in a given year, including your deductible and coinsurance.
Q10: What is a Qualifying Life Event (QLE)?
A10: Qualifying Life Events allow you to make changes to your insurance plan within a set period of time (usually 30 or 31 days), regardless of if they occur during the open enrollment window or not. Common QLEs include, but are not limited to the following:
- Marriage, divorce, or legal separation
- Birth or adoption of a child
- Death of a spouse or child
- Change in spouse’s employment or insurance status
- Other events may qualify (contact your HR or benefits department for questions)
Q11: What if I miss the open enrollment period for beneﬁts?
A11: If you miss the open enrollment period, you will not be able to enroll or make changes until the next annual open enrollment period — unless you experience a qualifying life event that permits you to make beneﬁts changes under IRS rules.
Q12: My spouse lost his job 7 days ago, can I add him to my health care coverage? (He lost his medical coverage by losing his job.)
A12: Yes, this is considered a qualifying life event, but you should do this as soon as possible. Depending on the employer, this needs to be done within 30 (or 31) days of the QLE.
Q13: Who is an eligible dependent?
A13: This varies by employer, but typically an eligible dependent is your spouse and your dependent child(ren) up to age 26. Some employers will also allow domestic partners to be considered eligible dependents.
Q14: Is there anything I can do if I have a doctor I like, but they’re out-of-network?
A14: You can talk to your doctor and ask them if they’d be willing to join the network with your insurance provider. If not, you’re still able to see that doctor, but you’ll either have to pay cash for their services or pay a higher percentage in out-of-pocket costs (depending on your health plan).
Q15: Can I have other health coverage?
A15: Yes, you can be covered by another group health plan and still receive beneﬁts under most medical plans. This is called “dual coverage” and coordination of beneﬁts (COB) will apply. Here’s how it works:
- If you’re enrolled in an employer-sponsored health plan, that coverage is primary for you and you must ﬁle your claims under this plan ﬁrst. If some of your out-of-pocket costs are not covered, then you can ﬁle a claim under your secondary insurance.
- If your spouse is covered under your plan and under his or her employer’s plan, then your plan is secondary to theirs. They must ﬁle claims under their employer’s plan ﬁrst and then ﬁle under your plan.
- Your children are covered ﬁrst under the plan of the parent whose birthday is earliest in the year. The other plan would be secondary. If you’re unmarried, separated or divorced, COB may be determined by a court decree or custodial responsibility. Contact your beneﬁts department for more information.
- Only expenses normally eligible under the plans will be considered for COB. Amounts in excess of what’s covered under a plan will not be considered.
Let us do some of the leg work for your next employee benefits guide. We've put together (see below) a far more robust list of frequently asked questions, including what to do when a spouse of an employee becomes eligible for Medicare, additional details on dependent eligibility, in-network versus out-of-network providers, more information about HSAs, and a complete glossary of common health insurance terms.
Do you need help with your employee benefits guide? Leave us a comment below or contact us. We’re happy to steer you in the right direction!