There are no two ways about it: Employee benefits insurance can get complicated. From healthcare to retirement, taxes, and more, there are myriad benefits available to employees. Which one is right for you?
Fortunately, plenty of resources can help you find the best employee benefits insurance plan for you. Several different types of employee benefits insurance may be able to help your situation. Here is a breakdown of the most common types of employee benefits insurance and what they can offer you as an employee.
Medical insurance is the most basic type of employee benefits insurance, and it protects you against the costs of healthcare and medical bills associated with injuries or illnesses. You can choose from various plans, including HMOs, PPOs, and POS plans.
Dental insurance is similar to medical insurance in that it protects you from high costs associated with dental care. Dental plans allow you to pay for services that may be more expensive than what your dental plan includes through an annual deductible or coinsurance fee. You pay a portion of the total expenses before your plan covers the remainder.
Vision insurance covers expenses related to eye care, such as prescription eyeglasses or contact lenses. Some plans also include vision exams and eye examinations at no cost to you. Vision insurance may be included in an employer’s health plan or offered separately as a standalone benefit.
Flexible Spending Account (FSA)
Through an FSA, you can make pre-tax contributions to an account separate from your paycheck. The money in the account can pay for eligible medical expenses not reimbursed by your insurance plan. At the end of the year, any remaining funds roll over into your next year’s account.
Health Savings Account (HSA)
An HSA is a tax-advantaged savings account that allows you to save money for current and future qualified medical expenses tax-free. The funds in an HSA are owned by you and accrue interest tax-free. You can choose to use these funds at any time for qualified medical expenses without being taxed on them or having to pay penalties even if you have other health coverage available.
Health Reimbursement Account (HRA)
An HRA is a flexible spending option offered by some employers that allow you to set aside money on a pre-tax basis for out-of-pocket medical expenses not covered by your health insurance plan. You can use this money whenever you need it throughout the year without waiting until January 1st, like with an FSA.
Critical Illness Insurance
Critical illness insurance is a type of insurance policy that will provide compensation to you or your family in a sudden illness or injury. This type of coverage is an essential part of any employee benefits package because it helps employees deal with the financial consequences of an unexpected illness or injury.
Hospital insurance pays for medical expenses if you are hospitalized due to an accident or illness. This coverage is usually provided as a supplement to other types of health insurance, such as individual or family plans. It is important to note that hospital insurance does not cover surgery or routine care, such as doctor visits.
Life insurance provides financial protection for the beneficiary when the insured person dies prematurely due to an accident or illness. It can also be used as a pension plan for surviving spouses and children without work histories who may otherwise not qualify for survivor benefits from Social Security.
Accidental Death & Dismemberment Insurance (AD&D)
This type of insurance covers the cost of replacing a deceased employee’s earned income and medical expenses. It also pays for the cost of any permanent disability suffered by an employee due to an accident.
This type of coverage pays a monthly benefit to an employee who becomes disabled due to an injury or illness. Disability insurance can be purchased on either a “permanent” or “temporary” basis, depending on your company’s needs.
Accident insurance is also known as workers’ compensation insurance. It covers medical expenses and lost wages for employees who suffer injuries at work that are not covered by their employer’s health plan or other benefits programs.
401(k) & 403(b) Retirement Plans
A 401(k) plan is an employee benefit that allows employees to save for retirement on a tax-deferred basis. A 403(b) plan is similar to a 401(k), but it’s offered by public schools and specific tax-exempt organizations such as churches and charities.
Employee Assistance Program (EAP)
An EAP provides counseling services to employees and their families related to personal issues that may affect job performance or health. EAPs are often offered at reduced rates through insurance carriers.
Pet insurance can help protect your pet from illness, injury, and accidents, especially if you have an expensive breed like a Great Dane or Yorkshire Terrier. Pet insurance typically covers treatment for hereditary conditions and accidents caused by external factors such as car accidents or ingestion of toxic substances.