We must first distinguish between large company plans and small company plans. Employees of large organizations usually have customized plans that were either negotiated by a union or designed by management to fit specific situations. If you work in a smaller company the chances are that you participate in a “shelf” insurance policy that is sold by a general agent. While large company plans may address specific expenses, small company plans are designed and priced by insurance actuaries when first sold. Eventually the shelf product may be “experience-rated”—meaning that employee/family claims determine the cost in future years. The most important action you should take is to match your past expenses against the list of covered expenses in your plan. We suggest you start the process in reverse by looking at the “excluded/non-covered expenses” first. That is the simplest way to learn plan design. Next, look for any plan rules that may require pre-approval, pre-certification, second opinions, or use of specific hospitals and physicians. Having done those 2 steps you should now know what is an eligible expense and how you can (without penalty) incur those expenses and be reimbursed by your plan. Remember: medical plan benefits are part of your overall pay and are not taxable to you; so use them wisely. NEXT TIME: HOW EMPLOYEES AND EMPLOYERS CONTROL MEDICAL PLAN COSTS.
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