Medical insurance covers medical and surgical expenses. The insured usually pays out of pocket and is later reimbursed by the insurance company. At other times, the insurance company will handle all of the costs.
Dental insurance generally covers regular checkups and teeth cleanings twice a year. In some cases, a co-pay may be required per appointment. Dental coverage can also include cavity fillings, x-rays, crowns, root canals, and other work. Dental insurance will not cover braces, dentures, or dental implants.
Vision insurance plans cover annual eye exams, frames, lenses, contacts, and discounts on LASIK and PRK. Vision insurance generally provides a discount for all of these services.
A group life insurance policy is where a single contract covers an entire group. Purchasing this policy for a group is cheaper for the individual members. This coverage typically lasts as long as the employee is still employed by the company. The policy can also end if the employer decides to terminate the company policy for everyone. The death benefit for a group policy is usually one to two times your annual salary.
Short-Term Disability insurance pays a portion of your salary if you become temporarily disabled. This excludes on-the-job injuries as they are covered by Workers Comp plans. Typically, short-term disability covers you for about 60% of your salary and last between three to six months. A group short-term policy is considered a guaranteed issue. You do not have to take a medical exam to buy coverage.
Long-Term Disability picks up where short-term disability leaves off. LTD pays about 50 to 60% of your salary, but varies by policy. If you are only able to work in a job that pays significantly less, such as 20% of what you used to make, you will likely get full benefits based on your previous income. Most long term policies last from a couple of years to ideally the rest of your life.
HEALTH SAVINGS ACCOUNT
To be eligible for an HSA, you need to have a high deductible health plan. This is an account that you contribute money to and draw from for medical expenses. This money can be used for out of pocket expenses but not insurance premiums. The money contributed to this account is tax free and also lowers your taxable income.
FLEXIBLE SPENDING ACCOUNTS
Flexible Spending Accounts are accounts that you put money into that you would use to pay for certain out of pocket healthcare expenses. This account can not be used for insurance premiums but can be used on deductibles, co-payments, and prescriptions. You can also use this account for medical equipment. This money is not taxed. A dependent or spouse can also contribute to an FSA. This account does not roll over from year to year.
Cobra is usually applied when an employee loses insurance coverage through loss of employment or a reduction of hours. This allows the employee and their dependents to maintain insurance coverage for up to 18 months, with some exceptions allowing coverage to go over that length. This coverage would be at the individual’s expense.
SECTION 125 (POP)
This plan is a “Premium-Only Plan”. This plan would allow an employee to pay their premiums with tax-free dollars. An employer would deduct the employee’s portion of their company insurance premium directly from their paycheck before taxes are deducted. This would increase an employee’s take home pay.
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