How to Get the Most Out of Your Employer Medical Plan
A job with good benefits is high on most employee’s list of needs, but actually taking advantage of them is another thing altogether. While it’s easy to opt for health insurance when open enrollment comes around, there may be other employer-offered benefits you could be maximizing.
Choosing the right coverage is essential to your health and finances, but work-life balance and mental well-being can be equally as important. Understand more about the different types of benefits to learn how to select what’s best for you and what you should take advantage of to make the most out of your employer-offered medical benefits.
Understanding Your Employer Medical Benefits
Employment benefit packages often include health insurance as a job perk. These ensure employees have medical care they may need, such as routine appointments, treating illnesses and protection from unexpected healthcare costs. How it is offered, however, depends on the employer.
For instance, employers can offer organizational- or consumer-oriented benefits. If it’s organizational-oriented, you can opt in or out of their group health insurance policy. Conversely, consumer-oriented benefits mean you get to choose what health insurance plan you want and your employer will reimburse you. Taking advantage of these benefits is essential as the average cost of health insurance outside your employee benefits stands at $477 per month for a 40-year-old.
Employer Health Insurance vs. Individual Medical Insurance
Sometimes, employers may not offer enough in the way of health insurance — which is why employees can also opt for individual medical insurance or personal health plans. An additional personal plan can help supplement employer benefits, depending on your needs.
To better understand your options, review the difference between employer health insurance and individual medical insurance.
Employer Health Insurance
Under typical employer-sponsored health insurance, the provider and plans are chosen by your employer. Premiums are split between your employer and yourself or paid for by your employer fully. If the payment is split, your share of payments is automatically deducted from your paycheck and can lower your taxable income.
Benefits and Drawbacks
- It saves time researching providers and different plans.
- It lets you subsidize or share costs as employers contribute to premiums, potentially saving you hundreds.
- It lowers your taxable income as split premiums are taken from pre-tax pay.
- It may not be sufficient coverage for your needs and require you to look at supplement insurance.
- Since it’s employer-sponsored, it will end if you leave your jobs.
- It may not offer your preferred doctors and hospitals.
Individual Medical Insurance
Also called a personal health plan, an individual health policy is one that you can buy for you or your family outside of what your employer may offer. Depending on your needs, you can work with an insurance agent to compare plans.
Personal health plans can also be subsidized from the government if you are eligible for Affordable Care Act-compliant plans. If your income is between 100% and 400% of the federal poverty level, you may be granted premium tax credits.
Benefits and Drawbacks
- It allows you to choose your insurance company and plan.
- It lets you keep your plan even without your job.
- It can also be subsidized if you are eligible.
- It costs more if you aren’t eligible for government subsidies.
- It costs more as you age.
- It does not lower your taxable income as premiums are not tax-deductible.
What Plan Should You Choose?
The best health insurance plan is one that covers all your needs at a price you can afford. However, not all health insurance plans are cheap — even if you are sharing the costs with your employer or the government. Affordable health insurance often comes with lower coverage, which isn’t always the best option. Compare the options below to help you determine what may be the best plan for you and your needs.
- ConsiderationEmployer Health InsuranceIndividual Medical Insurance
Who chooses the provider?
Employers choose the provider
health insurance plans.
You get to choose your
Who chooses the plan?
Employers select employee plan
You get to choose the plan
that suits your needs.
Is the cost shared?
Yes. Employers share half or the
No. Unless you are eligible for a
Are premiums tax-deductible?
Yes. If your employee splits
the cost, your share will be
No. You cannot reduce taxable
income based on the premiums
Are pre-existing conditions
Learn What Your Employer Health Benefits Offer You
There are various types of medical benefits available beyond health insurance employers can offer. This includes a health savings account (HSA), flexible saving account (FSA), preventative health care and more. Learning about the different benefit types your employer offers can help you find what suits you best.
Types of Health Benefits
Employers can offer a variety of health benefits, but you may miss these during your new hire onboarding. If you aren’t aware of what’s on the table, it’s important to reach out and ask your human resources (HR) department what health benefits they offer so that you can better protect your health and finances.
1. Health Savings Account (HSA)
Employers can offer an HSA option. It acts like a savings account where you can contribute untaxed dollars to pay for deductibles, copayments and other expenses. However, you cannot use funds from your HSA to pay for premiums. In order to qualify for an HSA, you must be under 65-years-old and have a high-deductible health insurance plan.
Grants you total control over how much to contribute and how it is spent.
It can be challenging to figure out how much money to add to it.
It continues with you even if you change jobs.
It charges you tax for any withdrawals on non-medical expenses.
It lowers taxable income as contributions are made pre-tax.
It does not help you with insurance premiums.
It rolls over any unused money at the end of the year to the next one.
It is not available for everyone.
Who Are They Best For?
HSAs are ideal for those who are generally healthy and want to save for future health care expenses, such as their deductible. It also benefits low-income individuals save just for their deductible, especially since they could have high-deductible plans.
If you plan on having an HSA, make it a point to save for your deductible and try to contribute the annual maximum. This way, if a medical emergency happens, you will be prepared for the out-of-pocket expenses even if you have health insurance.
2. Flexible Spending Account (FSA)
An FSA is similar to an HSA — you get to make pre-tax contributions to a savings-type account to use for medical expenses — but it is far less flexible.
Unlike HSAs, your unused funds will not be rolled over into the following year, but some employers may grant a grace period of 2.5 months or allow you to roll over up to $570. This means that if you leave your employer, your contributed funds may be forfeited. On the other hand, employers can also make contributions to your FSA.
It lowers your taxable income through pre-tax contributions.
Funds can’t roll over into the next year.
It lets you save toward medical expenses.
It’s owned by your employer.
It can increase significantly as employers can also match or make contributions.
It’s forfeited if you leave or are terminated by your employer.
Who Are They Best For?
An FSA is best for those who are in good health and only want to save the minimum for their deductible, copayments or coinsurance. It’s also for employees who don’t have a high-deductible health insurance plan and cannot get an HSA, but still want a responsible entity holding on to their money for emergencies.
Avoid contributing more than you should to your FSA. Remember, your funds can’t roll over into the next year if your employer does not offer a grace period or extension. To ensure you only contribute enough, review your past usage or history of needing your health insurance to project your costs.
3. Preventative Health Care
Employers may offer preventative care, also known as wellness benefits or routine care. This looks at their long-term health and aims to help prevent illnesses from developing or worsening. Preventative health care benefits involve annual check-ups, immunization, flu shots, boosters, tests, screenings and more.
Typically, your health plan should already include certain preventive health services for free — whether it’s from your employer or your own individual health plan.
It is free if you have an employer-sponsored or individual health plan.
It may be costly if you do not have a health plan.
It may detect certain medical problems.
It can reduce the cost of needing health care throughout the year.
Who Are They Best For?
Preventative care is beneficial for everyone — regardless of their age or health status. Being able to maintain and improve overall health and well-being through preventative care can ensure employees are in optimum health, productive and maintaining overall well-being.
Your employer may offer preventive benefits that include screenings for communicable diseases, sexually transmitted diseases (STDs) and cardiovascular issues. Additionally, you can be examined for mental health and substance abuse issues. Take advantage of these as needed.
4. Disability Insurance
If you’re unable to work due to a disability or illness, you may want to look into disability insurance. There are two types of disability insurance: short- and long-term plans and the coverage can help replace some of your wages. Typically, short-term disability plans last six to 12 months and benefits are given on a per-disability basis. A long-term plan, on the other hand, provides monthly benefits after a waiting period or if other benefits are no longer available.
According to the Bureau of Labor Statistics, around 30% of employers offered short-term disability insurance and 35% offered long-term disability insurance in 2020. However, accessibility varies by wage group.
It provides an income if you are unable to work due to an illness or disability.
It can be costly if it’s not paid for by your employer.
It lets you focus on recovery without having to worry about work.
There may be a waiting period before benefits start.
It helps you avoid debt while you’re unable to work.
It has a slow claims process.
Who Are They Best For?
Generally, disability benefits can suit any employee. After all, you never know when disaster may strike. It’s especially important for those who work in high-risk fields, such as construction, healthcare, agriculture and more.
If you work in a high-risk industry, consider supplementing your employer-sponsored disability insurance with individual disability insurance. This is something you can purchase outside your workplace and applies even if you change employers.
5. Family and Medical Leave
Under the Family and Medical Leave Act (FMLA), if you work for a company with 50 or more employees, your employer is legally-bound to offer you up to 12 weeks of unpaid, job-protected leave per year for family or medical reasons. For instance, you can take unpaid leave for the birth and care of your child, to care for an immediate family member or to take a medical leave due to a serious medical condition.
However, to be eligible, you must have worked with your employer for at least 12 months, worked at least 1,250 hours in that period and have at least 50 employees in your company.
It ensures job security even if you have to take time off.
It is not available for everyone.
It lets you balance work and family responsibilities.
It can be a slow process to get approval for your leave.
It requires your benefits to remain active even during time off.
It does not give you any salary for weeks not worked.
Who Are They Best For?
FMLA benefits every eligible employee. Employees are able to manage and balance their work and personal responsibilities in a timely and appropriate manner while securing their job during their leave. Since group health benefits are still maintained, any situation that occurs during the leave period can be covered.
If you are applying for an unpaid leave under the FMLA and you need more time, you can speak with your employer about an extension or look into alternative programs in your state. If you have just given birth and suffer from pre- or postnatal conditions, you might even qualify for short-term disability, which can extend your leave and even grant you benefits.
Types of Lifestyle Benefits
Mental health care and work-life balance are important concepts in the workplace. Employers have begun offering a variety of lifestyle and wellness benefits to support and promote the well-being of their employees. In fact, in 2020, the 2020 SHRM Employee Benefits study found that 52% of employers offered general wellness programs. Recognizing these benefits can help you maximize benefits to improve your work-life balance.
Financial Wellness Programs
Two in three adults say that money is a significant source of stress, which can affect your work performance and productivity. Some companies offer financial wellness programs which typically include information, training or support for an employee’s personal finance concerns. Lessons on budgeting, credit building, debt reduction and student loan repayment are a few topics that such programs can cover. These are given in order to minimize any financial challenges and reduce any money-related stress.
A free financial wellness program, offered by your employer, can educate you about financial topics and help you with your personal finances. Start with programs that focus on your current situation. For example, if you’re trying to eliminate student loan debt, opt for debt reduction programs.
Mental Wellness Programs
An employee’s mental health can affect their work performance. The Centers for Disease Control and Prevention note that depression can reduce cognitive performance 35% of the time, which is why employers may opt to offer mental wellness programs.
Mental wellness programs do not look the same at every company. Some companies offer mental health training for leadership, assistance finding therapists or provide dedicated relaxation rooms in the office where de-stressing is encouraged.
Contact your employer’s HR department to learn about possible mental wellness programs. Take advantage of what’s offered and reach out to your manager if you need additional assistance.
A sabbatical leave is where your company grants you a paid or unpaid “break from work” — typically several weeks off at a time — while safeguarding your work position. This is separate from your other paid time off (PTO) per year.
An employee’s eligibility for a sabbatical depends on the company’s policy. Some employers may require that you work at the company for a certain number of years before granting you this benefit.
If your employer offers a sabbatical leave, take advantage of it. This allows you to fully unwind from work, travel or focus on personal projects. When you come back to the office, you’ll likely be re-energized in your career and position.
Some employers offer lifestyle stipends — money given to employees for certain lifestyle purposes. For example, employers can offer a learning and development stipend to let employees improve their work-related skills. There are also stipends for family, food, travel and even pets. Eligibility for lifestyle stipends depends on your company.
Lifestyle benefits are in place to help employees with their work-life balance. Your HR team can help identify what benefits are available to you. It’s advisable to take full advantage of every stipend you’re eligible for.
3 Employer Health Benefits You May Overlook
These days, health insurance benefits are not enough. To keep employees satisfied, employers need to offer a more comprehensive health benefit plan, which often includes perks that go beyond just health insurance.
However, it can be easy to overlook the smaller benefits that come with your employer’s health package. Below are a few perks you may be missing out on.
Telehealth, also known as telemedicine, is where health care practitioners conduct patient appointments via phone or video conference. Depending on your employer’s chosen health insurance provider, you may get telemedicine or telehealth appointments covered.
Telehealth benefits are convenient, can get you an appointment sooner and may be more affordable. Both physical and mental health appointments are offered by many providers via telemedicine, affording you help when you need it.
2. Free Counseling
It is not uncommon to face work-related stress or personal issues, but having it pile up can affect an employee’s performance over time. To help with this, some employers offer workplace counseling for free. This is a therapy option for employees seeking a safe place to discuss any issues they may be struggling with.
While counseling may not be for everyone, taking advantage of it can help maintain one’s health and well-being. It’s a short-term solution that focuses on problem-solving, which can be great if you’re looking for ways to cope with challenges.
3. Substance Abuse Counseling
Substance abuse can affect your overall well-being, which is why some employers offer substance abuse counseling through their wellness program. This is completely confidential and is offered to encourage you to reach out for help.
Note that patients who misuse drugs or other substances may need long-term care and employer-offered counseling sessions are only free up to a certain point. How many sessions you get depends on your employer. However, it’s a good place to start when you’re seeking help.
Ways to Maximize Your Employer Medical Benefits
Having access to health assistance or insurance through your employer to cover you in the event of a medical emergency is a great blessing for you now and in the future. It’s essential you take advantage of their potential to avoid leaving anything — like money — on the table.
Find out what your company has to offer
Contact your HR department to determine what benefits the company offers. While you may have a rough idea of the basic perks, you might end up having access to more benefits that can help you save on medical costs.
Compare health plans with your spouse
If you have a spouse, compare your health plans. This way, you can get the most out of what both companies offer.
Evaluate what is best for you
Once you’ve compared everything being offered, think about the plan that fits your situation best. If what your employer offers isn’t enough, you may have to consider getting an individual health insurance plan to supplement it — which can cost more.
Opt for an HSA or FSA
If your employer offers an HSA or FSA, it’s a good idea to sign up for it. Your employer can make matching contributions and it helps reduce your taxable income.
Enroll in disability insurance
If you’re injured and it prevents you from working, disability insurance offered by your employer could help you recover up to 70% of your salary. You will have to rely on your savings if you don't have this insurance, so think about how long you can survive on savings alone.
Take advantage of preventative health benefits
Preventative health benefits may not include your usual annual check-up — some even offer gym memberships, weight loss programs, etc. Make sure to ask for clarification on what your company offers in the way of preventative health benefits to ensure you take full advantage of them.
Evaluate your coverage periodically
Your situation can change, which is why it’s important to take a look at your coverage at least once a year and evaluate whether it’s still enough for your needs.
Expert Insight on Maximizing Employer Medical Benefits
Employer-sponsored health benefits can add far more value to your compensation package, which underscores why it’s so important to take advantage of it. MoneyGeek asked a few industry experts how employees can do just that.
- What health and lifestyle benefits should employees look out for or aim to get?
- How can employees maximize their available health benefits?
Supervising Attorney at The Bankruptcy Law Center
CEO of The Annuity Expert
Founder and CEO at Mortgage Relief
Learn more about health insurance, plans and options in the resources below to help you better understand your employer’s medical benefits.
- American Association of Retired Persons: If you need to calculate the cost of long-term care, this tool by the AARP can help you estimate the cost in your area.
- America's Health Insurance Plans: Learn more about America’s various health insurance plans through AHIP and get the latest news on all-things related to health.
- HealthCare.gov: Cost-sharing reductions: Understand how cost-sharing reductions work and if you qualify in this helpful resource.
- HealthCare.gov: Health coverage: Changing your current health plan can only be done if you have a life event. Use this tool from HealthCare.gov to see if you can still get coverage outside of the enrollment period.
- HealthCare.gov: Income levels & savings: Saving on health insurance is a must for low-income earners. anyone with low income. Find out if you are eligible for marketplace premium discounts, qualify for Medicaid or more based on your income using HealthCare.gov’s tool.
- HealthCare.gov: Marketplace plans: If your employer-sponsored health insurance is not enough and you want to switch to a marketplace plan, check out this guide to figure out what the switch entails and how to do it.
- HealthCare.gov: State options: To find out your state’s health insurance marketplace, use this tool from HealthCare.gov can help.
- Kaiser Family Foundation: Learn about employer-sponsored insurance and the numbers involved. How many employees get it? How much are premiums?
- Medicare: Find a plan: If your employer doesn't offer health insurance, but you’re interested in getting your own, consider Medicare. You can find and compare plans using Medicare’s helpful comparison tool.
- Medicare: Savings program: Understand the costs of different Medicare programs and how you can qualify for each one.
About the Author
- American Psychological Association. "Stress In America 2020." Accessed January 27, 2022.
- Bureau of Labor Statistics. "Employee Benefits in the United States – March 2021." Accessed January 27, 2022.
- Bureau of Labor Statistics. "Short-term and long-term disability insurance for civilian workers in 2020." Accessed January 27, 2022.
- Centers for Disease Control and Prevention. "Mental Health in the Workplace." Accessed January 27, 2022.
- Department of Labor. "Family and Medical Leave (FMLA)." Accessed January 27, 2022.
- HealthCare.gov. "Affordable Care Act (ACA)." Accessed January 26, 2022.
- United States Census Bureau. " Health Insurance Coverage in the United States: 2020." Accessed January 27, 2022.