Your New Employee's Top Ten Benefits Questions
by Vita, on July 27, 2016
New to the world of benefits? Been a while since you’ve transitioned away from a role in benefits? As an HR contact to your employees, you are bound to receive a bevy of questions from both new hires and longer-tenured employees alike. While the answers to a majority of those questions will be unique to your group, there are some questions that many new hires will universally ask regarding their benefits. Here are 10 common questions we encounter from new hires on a consistent basis:
1. How long do I have to make my benefits decisions?
Carriers require a decision to be submitted within 30 days from the benefits effective date; this could be the date of hire, or the first of any given month depending on the employer’s benefits eligibility strategy. Of course, the sooner your new hire submits their decisions, the sooner they receive their ID card. It typically takes a carrier between 7 to 10 business days to deliver the ID card once the enrollment is processed.
2. Which medical plan should I pick?
This is a very commonplace question amongst new employees, but one that cannot be answered objectively. Rather than determining for them what is “best,” it’s recommended instead to educate employees on the differences between the plan options, and equip them to make the best decision for themselves based on their healthcare needs.
3. Why would I ever want to go on a high-deductible health plan (HDHP)?
The HDHP plan can be appealing for some, due to the generally lower premium associated with the plan. That lower premium generally results in an HDHP requiring the lowest employee contribution. An HDHP is a “consumer-driven” health plan in that the high deductible encourages participants to be more conscious of the cost of their care. The goal is to promote true consumerism in the way we seek healthcare services. Aside from the lower premium contribution for an HDHP, this can be an especially great option for your new hire if the high deductible health plan is HSA-qualified. An HSA-qualified HDHP allows the member to contribute toward a Health Savings Account, which allows them to set aside money on a tax-advantaged basis to use for eligible medical, dental, and vision expenses
4. Why did insurance cover so little for my non-network claim?
If your employee does not understand how non-network services are covered on their medical plan, they may be surprised to find out that coverage is not nearly as comprehensive as it appears on a one page benefits summary. It’s important to note that a carrier does not base their responsibility, or reimbursement to the provider, on the billed charges from non-network providers. Since there are no contracts in place for these providers, and thus no negotiated rate, carriers use other methods to control their financial exposure for non-network claims. This is usually done by setting a limit on what the carrier recognizes as a reasonable charge. This limitation can be based on a published “fee schedule” or may use Medicare as a benchmark for non-network reimbursement. These allowed amounts are significantly lower than what most non-network providers charge, and thus can leave your employee on the hook for much more of the cost than they may have anticipated.
5. Where is my dental and vision ID card?
Dental and vision carriers are more regularly opting not to issue unique member ID cards. Typically, they designate the primary subscriber’s social security number as the unique member ID number. In the fairly rare instances where cards are issued, they may be in transit, or perhaps even lost. However, a card may have not arrived because it was never sent out in the first place! The good news is that you almost never “need” an ID card for dental and vision plans in order to receive care.
6. I don’t wear glasses, what good does the vision benefit do me?
The vision benefit isn’t only useful for those that wear glasses. Those that have had laser vision correction in the past and no longer wear glasses may be able use their frame allowance to purchase non-prescription sunglasses. More importantly, even if you don’t need glasses, an eye exam is always a good idea. By dilating the pupils, optometrists can screen for certain health conditions, including diabetes, high cholesterol, and high blood pressure. A simple way to get a heads up that a visit to your medical doctor might be in order!
7. Why do I need to submit receipts for FSA expenses?
Because there are tax savings associated with FSA (Flexible Spending Account) expenses, the IRS has strict rules in terms of ensuring that any FSA expenses made were for eligible items/services. Your FSA vendor may not require receipts for things that can easily be attributed to your medical plan (Rx copays, office visits, etc)., but will otherwise require a valid receipt or Explanation of Benefits to substantiate the claim. Valid documentation must include the medical provider’s name, patient’s name, description of the product/service, date of service, and the amount charged. A credit card receipt is only acceptable as documentation for over the counter items that are not reimbursed through your health plan.
8. Why is there a pre-existing condition exclusion on the disability plan? I thought the Affordable Care Act disposed of such exclusions.
While it is true that the Affordable Care Act eliminated pre-existing condition exclusions from medical plans, that law does not apply to disability plans. Pre-existing condition exclusions are still the norm in long-term disability plans, and it’s important to know how that provision applies to new employees enrolling in the plan.
9. Why is COBRA coverage so expensive?
COBRA coverage is more expensive than what an active employee is accustomed to paying, because the COBRA qualified beneficiary is required to pay the full premium cost for coverage, along with a nominal administration fee. In limited circumstances, a former employer may subsidize some or all of the COBRA premium, but in most cases the participant is responsible for the entire sum.
10. What is the difference between an HSA and an FSA?
While both are tax-advantaged accounts, there are several key differences between the two:
- FSA accounts are set up by the employer and can be used in conjunction with any type of medical plan. They also are subject to the IRS’s “use it or lose it” provision. Many employers design their plans to allow up to $500 to “roll over” to the next year, or may use an extended “grace period” for claim filing to soften the impact of the use it or lose it rule. The full annual health FSA election can be used immediately.
- By contrast, an HSA account can be established by either the employer or the individual. Funds can only be deposited into an HSA while the participant is enrolled only in an HSA-qualified HDHP plan. While HSA monies are not subject to the “use it or lose it” provision and can be rolled forward indefinitely, these funds are only available as contributions are made. Just like your own checkbook! HSA accounts, and the funds held in those accounts, are owned by the employee, whereas unused FSA elections revert back to the employer if they remain unused after the claims runout period.
Have questions about preparing new hire orientations? Email us at firstname.lastname@example.org!