Frequently Asked Questions (FAQ)

Medical FAQ

What is a preferred provider organization (PPO) plan, and how does it work?

A preferred provider organization (PPO) plan works for you in two ways: through a panel or network of physicians and other service providers (such as hospitals and labs), or through providers you select that are not in the network. Each time you or a covered family member needs care, you choose whether to see an in-network or an out-of-network provider.

Network providers are listed in your plan’s provider directory. When you use an in-network provider, also called “going in-network,” you generally receive a higher level of benefits. Also, fees from in-network providers tend to be lower, because the providers and the network have negotiated to have the providers accept certain fees for certain services.

What is a Health Maintenance Organization plan (HMO) and how does it work?

HMO plans offer a wide range of healthcare services through a network of providers who agree to supply services to members. With an HMO you’ll likely have coverage for a broader range of preventive healthcare services than you would through another type of plan.

What is a HSA Plan?

A health savings account is a tax-advantaged medical savings account available to taxpayers in the United States who are enrolled in a high-deductible health plan. The funds contributed to an account are not subject to federal income tax at the time of deposit.

With a PPO plan, do I name a primary care physician (PCP)?

The PPO plan does not require you to name a primary care physician (PCP) or coordinate your care through a particular doctor. However, you are free to choose a primary doctor, whether or not that doctor participates in the network.

What are the advantages of obtaining my care from in-network providers?

There are several advantages when you go in-network. Generally:

  • You may not need to pay a deductible, or your deductible may be lower than it would be for out-of-network expenses.
  • You don’t need to submit claim forms and wait to be reimbursed by your plan.
  • Your in-network provider obtains any needed pre-authorization for you.
  • You generally receive a higher level of benefits because participating providers (doctors, hospitals and other health care facilities) have agreed to provide their services at lower fees.
  • Some plans provide preventive care services in-network that are not covered out-of-network.

Some plans limit covered services out-of-network but offer these services without a limit on the number of visits when the care is provided in-network.

How does the PPO plan work when I go out-of-network?

Generally, you may use any covered health care provider you choose. However, your cost will generally be higher, and you have certain added responsibilities. For example:

  • Each year, you must pay part of your eligible out-of-network expenses before the PPO plan begins to pay benefits. This amount is called the deductible.
  • After you satisfy the deductible, the plan will reimburse you for a percentage of your eligible expenses and you will pay the balance. The percentage you pay is called your coinsurance percentage.
  • You must get pre-authorization for certain covered expenses such as a hospital stay. If you don’t get the required pre-authorization, the amount of benefits available will be reduced or the expenses will not be covered at all. This means your cost will be higher.
  • You must complete claim forms and file claims with your health care company to receive payment of benefits.
  • The plan will not cover any benefit reductions due to failure to pre-authorize certain treatments.
  • The plan will not cover any charges above the allowable amount.

When do I need to file a claim form?

You typically do not need to file a claim form when you see in-network providers.

When you do need to file a claim form, as you need to do in most cases when you go out-of-network, your doctor may handle your expense in one of two ways. Most doctors require you to pay the bill right away. In this case, get a receipt and file it with a claim form to be reimbursed. If the expense is covered, you will be reimbursed for part of the bill. To file a claim, follow the instructions on the claim form. If you have more than one health insurance plan and have received an Explanation of Benefits (EOB) form from another health care plan, be sure to include a copy with your claim.

Sometimes doctors are willing to wait for payment. In this case, you or your doctor will file the receipt and completed claim form with your health care company. The health care company will pay the doctor for the part of your expense the plan will cover. The doctor will then bill you for the part the plan did not pay.

What happens if I need specialty care that is not available from in-network providers where I live?

You may be referred to an out-of-network provider if you need specialized care that your health care company determines to be medically necessary and that is not available through an in-network provider in your area. As long as you use the provider, you’re referred to by your health care company and follow your plan’s rules, you’ll be covered for that care at in-network benefit levels.

What happens in an emergency?

In a true emergency, get the care you need as quickly as you can. If you are able, contact member services for your health care company at the number on your ID card, even in an emergency. However, even if you are unable to contact member services, get the care you need. Even if you need to go out-of-network, your plan will cover emergency care at in-network benefit levels as long as you follow the plan rules.

Check to see how your plan defines a true emergency. Examples typically include severe bleeding, chest pain, and unconsciousness. Also check to see how soon after the onset of the emergency you must notify your health care company in order to be covered in-network.

What happens if I need care while I’m traveling?

If it’s not an emergency and you need care while traveling, call member services for your health care company at the number on your ID card. Member services can refer you to an in-network provider.

In a true emergency, get the care you need as quickly as you can. If you are able, contact member services even in an emergency, and your health care company can help you decide where to go for care. However, even if you are unable to contact member services, get the care you need. Even if you need to go out-of-network, your plan will cover emergency care at in-network benefit levels as long as you follow the plan rules.

Check to see how your plan defines a true emergency. Examples typically include severe bleeding, chest pain, and unconsciousness. Also check to see how soon after the onset of the emergency you must notify your health care company in order to be covered in-network.

What is a deductible?

A deductible may only apply, or may be higher, when you obtain care out-of-network. A deductible is the part of eligible expenses you must pay before the plan begins to pay a percentage of your eligible expenses.

Are there expenses that don’t count toward my deductible?

Yes. Some of your expenses will not count toward your deductible. For example, any penalty you may pay because you failed to pre-authorize treatment through your health care company will not count. For out-of-network care, amounts your care provider charges above the plan’s allowable amount for a given service also will not count toward your deductible.

What is coinsurance?

Coinsurance may only apply to out-of-network care. After you satisfy the deductible, the plan will reimburse you for a percentage of your eligible expenses for out-of-network care and you will pay the balance. The percentage you pay is called your coinsurance percentage.

What is a copayment?

A copayment generally applies to in-network care. When you stay in-network, you pay only a fixed amount at the time you receive services. That amount is called your copayment.

HMO Plan

What is a Health Maintenance Organization plan (HMO) and how does it work?

HMO plans offer a wide range of healthcare services through a network of providers who agree to supply services to members. With an HMO you’ll likely have coverage for a broader range of preventive healthcare services than you would through another type of plan.

Prescription FAQ

What is a formulary? 

A formulary is a list of safe and cost-effective drugs, chosen by a committee of physicians and pharmacists. Formularies have been used in hospitals and health plans for many years to help ensure quality drug use.

Should I ask my physician to switch my current medications to formulary medications? 

Many of the medications will already be on the formulary. However, if you have one that is not, ask your physician to choose a similar formulary product for your use.

Should I use generics?

There are many medications on the market that do not come in generic form. For those drugs that do, your pharmacist should suggest safe and effective generic alternatives.

Life and AD&D FAQ

When are life insurance benefits paid?

Life insurance benefits are paid to your beneficiary if you die while coverage is in effect. Some plans do not provide benefits if you die from certain causes, such as war or injury while you are committing a felony.

When are accidental death and dismemberment (AD&D) insurance benefits paid?

Accidental death and dismemberment (AD&D) benefits are paid to if you die as the direct result of a covered accident that occurs while coverage is in effect. AD&D insurance benefits are paid to if you suffer certain severe injuries as the direct result of a covered accident that occurs while coverage is in effect. Such benefits are often expressed as a percentage of the total death benefit payable. If you suffer several covered injuries as a direct result of the same accident, the plan will typically pay 100% of the total death benefit payable, but no more. Some plans do not provide benefits if you die from certain types of accidents.

What is supplementary or voluntary life insurance?

Supplementary or voluntary life insurance is the amount of optional life insurance coverage your employer offers you. You elect whether or not to enroll for supplementary life insurance coverage.

When are supplementary life insurance benefits paid?

Supplementary life insurance benefits are paid to your beneficiary if you die while coverage is in effect. Some plans do not provide benefits if you die from certain causes, such as war or injury while you are committing a felony.

What is supplementary or voluntary AD&D insurance?

Supplementary or voluntary AD&D insurance is the amount of optional AD&D insurance coverage your employer offers you. You elect whether or not to enroll for supplementary AD&D insurance coverage.

When are supplementary AD&D insurance benefits paid?

Supplementary AD&D insurance benefits are paid to your beneficiary if you die as the direct result of a covered accident that occurs while coverage is in effect. Supplementary AD&D insurance benefits are paid to if you suffer certain severe injuries as the direct result of a covered accident that occurs while coverage is in effect. Such benefits are often expressed as a percentage of the total death benefit payable. If you suffer several covered injuries as a direct result of the same accident, the plan will typically pay 100% of the total death benefit payable, but no more. Some plans do not provide benefits if you die from certain types of accidents.

What is dependent life insurance?

Dependent life insurance is life insurance coverage on the lives of your eligible dependents, such as your spouse and dependent children.

When are dependent life insurance benefits paid?

Dependent life insurance benefits are paid to you if the covered dependent dies while coverage is in effect. Some plans do not provide benefits if the dependent dies from certain causes, such as war or injury, while the dependent is committing a felony.

Does enrolling for life and AD&D insurance require me to provide evidence of insurability?

Whether or not you must provide evidence of insurability depends on your plan. Your plan may require evidence of insurability for any of the following:

  • Insurance over certain dollar amounts
  • Enrollment at any time after insurance was first offered
  • Increases in insurance amounts
  • Dependent insurance.

How do I name or change my beneficiary?

For many people, the largest inheritance they leave is the life insurance through their employers. Its important to name a beneficiary(ies) to receive this insurance if you die, and to keep this designation up to date. If you name multiple beneficiaries, be sure to indicate the percentage or fraction of benefits payable to each, or indicate that the benefit is to be paid equally among survivors. To name your beneficiaries, most plans require you to complete and sign a beneficiary form, or to name your beneficiaries on your enrollment form. You may wish to consult an attorney before you name your beneficiaries, especially if you are naming dependent children or a trust. Its a good idea to name a primary beneficiary(ies) to receive benefits if you die, as well as a secondary beneficiary(ies) to receive benefits if your primary beneficiaries are not alive to receive your benefits. You can generally change your designation at any time.

Disability FAQ – LTD Plan

What is a long-term disability (LTD) plan?

A long-term disability (LTD) plan is designed to work with other sources of disability income to replace part of your income if you become disabled as defined by the plan. LTD plan benefits generally begin after an elimination period, and end at the earliest of: When you are no longer disabled as defined by the plan, or you leave your employer for any reason other than a covered disability when you reach the limit for receiving LTD benefits, which for many plans is an age limit, or your death.

How does the LTD plan work with other sources of disability income?

The LTD plan is designed to replace a percentage of your eligible pay up to a dollar maximum. Other sources of disability income, including benefits you are eligible to receive from Social Security Disability Insurance Benefits and Social Security Old Age Insurance Benefits, typically count toward that percentage.

What is an elimination period?

An elimination period (also known as a waiting period) is the length of time that must pass after you become disabled as defined by the plan and before LTD benefits begin. Sometimes LTD benefits begin after benefits under a short-term disability (STD) plan end.

Are there special rules for an LTD claim?

Your employer probably has rules, including reporting the disability to your supervisor on your first day of absence, obtaining proof of disability following plan rules (often using a physician designated by your employer or the insurance company), a time limit on applying for benefits, and following the recommended treatment or therapy. You will need to provide proof of continued disability from time to time. If your employer has disability management and return-to-work programs, you may also need to participate in those programs.

Does the LTD plan cover disabilities from any cause?

Your plan probably excludes disabilities resulting from certain causes, such as your committing of a felony, military service, war and self-inflicted injuries. It may also exclude job-related injuries, which may be covered under another program.

Flexible Spending Account FAQ

Dependent Care FSA – What is a dependent care flexible spending account (FSA) and how does it work?

A dependent care flexible spending account (FSA) allows you to set aside pre-tax dollars from your pay to cover eligible child/adult care expenses that allow you to work.

By the way, your company may call an FSA by another name, such as a reimbursement account.

What are pre-tax contributions?

Contributions you make to an FSA are made on a pre-tax basis. This means your contributions are taken from your paycheck before federal, FICA, and most state and local taxes are withheld. You also get an immediate advantage from contributing pre-tax dollars: right in your paycheck. Each pre-tax dollar you contribute lowers your current taxable income, so you end up reducing the current federal income tax and FICA tax that you pay. In most cases, you’ll also pay lower state and local income taxes.

Although pre-tax contributions reduce your current income for tax purposes, they don’t lower it for determining your company benefits that are based on pay.

Do I need to enroll to participate in an FSA?

Yes, you must enroll if you want to participate in an FSA. To continue participating after your initial enrollment, most plans require you to re-enroll each year during open enrollment. Your elections do not automatically continue from one year to the next.

How do I contribute to an FSA?

You fund your FSA(s) with pre-tax dollars that are deducted from your pay in equal installments throughout the year. Your plan will define minimum and maximum contribution amounts.

How do I estimate my dependent care FSA contributions?

To estimate your future expenses, first review similar expenses you’ve had over the last couple of years. Also consider any changes to your child/adult care needs that you expect may occur during the year.

It’s important to carefully estimate your expenses before you decide how much you want to contribute to the dependent care FSA each year. Be conservative in your estimate since you forfeit (lose) any balance that isn’t used by the claims filing deadline. On the other hand, if your expenses dramatically exceed the amount you contribute to the FSA, you miss out on some tax savings.

What are eligible expenses for the dependent care FSA?

To be an eligible expense for the dependent care FSA, it must be:

  • For care of children under age 13, or for care for your lawful spouse or other eligible dependent who is incapable of self-care
  • For day care, babysitting and housekeeping related to this care
  • For payments to relatives who care for an eligible dependent and who are not claimed as a dependent on your federal income tax return (including your child if the child is at least age 19 and not claimed as a dependent)
  • For before- and after-school care programs, if the expenses are itemized separately from the tuition expenses
  • To allow you to work and, if you are married, to allow your spouse to work or attend school full-time

In addition, these rules apply to the dependent care FSA:

  • Reimbursed expenses lower the amount you can claim on the Federal Dependent Care Tax Credit
  • Contributions may be limited depending on the employment status and income of you and your lawful spouse.

Some financial planners suggest that if your family’s adjusted gross income is more than $24,000, you’ll probably save more in taxes by using the dependent care FSA. If your family’s adjusted gross income is $24,000 or less, you may be better off using the federal tax credit. Child/adult care tax worksheets are available from the IRS to help you determine which method is best for you. Also, you may want to consult a tax advisor about your own situation.

Are there expenses that are not eligible for reimbursement under the dependent care FSA?

Yes. Expenses that are not eligible for reimbursement under the dependent care FSA include:

  • Supplies such as food, clothing or diapers
  • Tuition for education of an eligible dependent (including kindergarten)
  • Expenses for transportation to and from the care provider, or to pick up a baby-sitter
  • Expenses for which you use the Federal Dependent Care Tax Credit
  • Expenses for eligible dependents for whom you claim the Supplemental Young Child Credit
  • Expenses for overnight summer camps
  • Health care expenses (reimbursable only through a health care FSA)

When may I change my FSA contributions?

You may change your FSA contributions each year during open enrollment. Your plan may also allow you to change your contributions during the year if your situation changes.

How do I file a dependent care FSA claim?

To file a dependent care FSA claim:

  • Obtain a claim form.
  • Attach an itemized bill or receipt from the care provider showing the:
    • Name(s) of the eligible dependent(s) who received the service,
    • Type of service provided,
    • Date the expense was incurred,
    • Name of the person or organization providing the service and the Social Security number, federal tax identification number or the nonprofit equivalent (special rules apply if you can’t obtain these numbers),
    • Amount of the expense, and
    • Provider’s signature
  • Submit the completed form and documentation as instructed on the form.

When am I reimbursed for dependent care FSA expenses?</h3

When you file a claim, you are reimbursed for the amount of eligible expenses up to the current account balance remaining in your account (contributions to date minus any previous reimbursements).

Here’s an example. Jose elects to set aside $480 each calendar year ($40 a month) for his dependent care FSA. In January, he files a claim for $30 and is reimbursed for the $30. In March he files a claim for $200 and is reimbursed for $50 ($80 contributions for January and February minus $30 claim already reimbursed. The $150 difference ($200 claim minus $50 reimbursed) remains an eligible expense and will be reimbursed as Jose makes more monthly contributions to his account.

What if I have an expense late in the year, and don’t get the bill until the following year? How do I file the claim?

An FSA claim is eligible for reimbursement in the year in which it is “incurred.” An eligible expense is considered “incurred” on the date the service or treatment is provided, not on the day you pay for it. If the service or treatment will extend beyond the end of the year, only expenses incurred during the plan year for which you are contributing to your account will be eligible for reimbursement in that plan year. If you have FSA accounts in both years, you will file part of the claim against one year’s account and part against the next year’s account.

What happens to contributions left in my FSA at the end of the year because I didn’t file claims against them?

Because of the favorable tax treatment provided by the FSA, government regulations require that the money you contribute to your FSA only be used for eligible expenses incurred during that same year. However, you may submit claims for a given year up to your plan’s claims filing deadline (such as March 31) in the following year. Any money left in your account(s) after the claims filing deadline is forfeited. You cannot use one year’s contributions for the next year’s expenses.

Here’s an example. Joseph enrolls for an FSA and elects to set aside $500 a year. By the claims filing deadline of the following year, he has only filed claims for $450. He forfeits the $50 difference. Joseph does not, however, lose the tax savings on that $50.

What happens to my dependent care FSA account if I stop working for my employer before the end of the year?

You may submit claims to your FSA account for eligible expenses incurred before your participation ended up until the claims filing deadline in the following year. You cannot continue to make dependent care FSA contributions after you leave the payroll.

What happens to my FSA if I die during the year?

Your contributions to your FSA stop. However, until the claims filing deadline, your survivors can continue to file eligible expenses you incurred before your death.

My company offers both a health care FSA and a dependent care FSA and I participate in both. Can I shift money between my FSA accounts?

No. IRS regulations require the accounts to operate separately. You cannot use your health care FSA for eligible dependent care expenses, or the reverse.

Health Care FSA – What is a health care flexible spending account (FSA), and how does it work?

A health care flexible spending account (FSA) allows you to set aside pre-tax dollars from your pay to cover eligible healthcare expenses (medical, dental, vision and hearing) for you and your eligible dependents.

Your company may call an FSA by another name, such as a reimbursement account.

Quick Links