Making the most of your workplace benefits can save you serious money

view of eye chart through glasses

Reviewing your employer’s benefits be confusing, and probably isn’t at the top of anyone’s list of things they want to do. But if you’re not careful you could be making some common mistakes that can literally cost you thousands. Here are the three most common mistakes we see people make. Avoid them and you’ll save money, and headaches, during your next enrollment period.

1. Misinterpreting the premium and deductible.

Like a subscription fee, the premium is the amount you pay to the health insurance company to keep your policy active.

A deductible is the annual out-of-pocket cost you pay before your health insurance coverage takes effect. Your premium payments don’t count toward the deductible.

Here’s an example: Your policy has $5,000 deductible, and you need a CT scan. Other than your annual exam, you haven’t had any other medical care for the year. The CT scan costs $2,000. How much is the insurance company going to contribute toward that $2,000? Nothing. It’s all on you.

Understanding your premium and deductible is crucial because in order to keep premiums low, some insurance companies are raising deductibles.

So even if you have a low premium, remember if your deductible is $10,000, your insurance company will not pay anything until you pay $10,000 out-of-pocket in medical costs, other than for some preventive services mandated by law.

You will want to have an emergency fund to make sure you can cover an unexpected event before your health insurance kicks in.

2. Electing benefits with a one size fits all mindset.

Everyone’s needs and medical conditions are different. The policy that works for your co-worker or friend may not work for you. You also have to look at the benefits of the individuals you are getting insurance for if you are electing for a partner or dependents. Things to look out for:

  • Does every person need every benefit? For example, maybe one one person needs vision coverage.
  • Are you getting too much insurance? Are you electing for a higher plan than you really need?
  • Do you routinely take prescription drugs for a medical condition? Failing to sign up for a policy that includes coverage for your medications can become very expensive. Review the policy to make sure that its prescription benefit includes your medications.

3. Not maximizing free or discounted services.

You may qualify for a premium discount after joining a wellness program offered by your employer or health insurance plan. Other discounts also might be available, such as price breaks for people who quit smoking. Many employers also offer services like an Employee Assistance Program that can provide services like free therapy sessions that would otherwise be very expensive to try out.

These aren’t the only things that can go wrong during benefits enrollment. We’re here to help if you’re not sure which options are right for you, or whether you’re making the most of the benefits you’re already enrolled in.