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Employer health care benefits

Understanding some of the details in your health insurance policy can help you avoid unpleasant surprises when it comes to paying for medical bills. It can also be very helpful to research and understand the different health benefits, accounts, and insurance options your employer might offer that can help you pay for your medical care and treatments. Let’s explore some of these health care options. 

Health insurance: Summary of Benefits and Coverage

Insurance companies and job-based health plans must provide you with a Summary of Benefits and Coverage. This lists the services covered and how the financial responsibility is split between you and the insurance company, in an easy-to-understand summary format. You can usually find this on your employer’s benefits website or insurance company website. You should also be able to call your insurance provider and ask for a copy of the document for your plan. 
In general, things to look for include: 
  • Does your policy have a deductible? 
  • Do you need a referral to see a specialist? 
  • Is prior authorization required? 
  • In case of emergency, how would you be charged for out-of-network providers or hospitals? 
  • What’s the appeals process? In case a claim is denied, knowing your next steps could help reduce the stress of the potential bill. 
  • Check your maximum out-of-pocket limit and maximum out-of-network limit to find out your potential maximum liability. 
Your insurance company may offer case management services to help facilitate care. You may wish to call and ask if your situation qualifies. Case Managers work for insurance companies and often contact clients who have recently been hospitalized. Since they work for the insurance company, their priority is keeping costs contained, but they can also help you navigate the health care system and make sure you’re able to get proper care. 


If you’re eligible for a health savings account (HSA) or a health care flexible spending account (HCFSA), you could pay for qualified medical expenses and get a tax break.1 
Health savings accounts (HSAs) 
Anyone can open an HSA, but you must have an HSA-eligible health plan and meet other criteria to contribute to an HSA without penalty. If you do, saving at least enough each year to meet your deductible could be a good thing to consider. 
HSA contributions are tax-deductible. You can also be reimbursed for qualified medical expenses tax-free, and any investment growth is tax-free.1 Over-contributing can lead to unexpected tax penalties. 
Every year, the Internal Revenue Service (IRS) sets the maximum amount for annual HSA contributions. The HSA contribution limit for 2023 is $3,850 for self-only coverage and $7,750 for family coverage.2 Those 55 and older can contribute an additional $1,000 as a catch-up contribution.3
There's no time limit on when you can take money out of your HSA. If you don’t need it for health care expenses now, you can save and invest it for health care in future years, or in retirement, when it's likely to come in handy. The rule is that the HSA must have been opened before the expenses were incurred. Be sure to save your receipts (or get an annual summary from your insurance carrier) to show that expenses were qualified and when they happened. 
Health care flexible spending accounts (HCFSA) 
An HCFSA helps you pay for health care costs you expect to incur during the year. Unlike HSAs, an HCFSA is only available through your employer, and this kind of plan usually follows the use-it-or-lose-it rule: You can contribute up to a set amount annually, but any money left in the account at the end of the year could be lost. Your employer may allow a grace period of up to 2½ months for spending down your HCFSA at the beginning of the following year, or they may allow you to carry over up to $500 of unused amounts to the following plan year. 
Despite the drawback, using an HCFSA to pay for some health care costs could help you save. Money goes into the account pre-tax, and withdrawals are tax-free when used to pay for qualified medical expenses. 

Disability insurance

Taking time off generally means no paycheck, unless you’re off work due to disability. If you have short-term disability insurance through your employer, your HR representative or your supervisor can help you request a leave of absence and file for benefits. 
You can buy 2 types of disability insurance coverage, which pay a percentage of your income: 
  • Short-term disability coverage usually lasts about 6 months. 
  • Long-term disability coverage kicks in after the short-term policy runs out at the 6-month mark. 
Some employers offer the opportunity to buy one or both types of disability insurance in a group policy as a benefit. Some employers also offer company-paid short or long-term disability as part of their benefits package, as well. You can also buy disability insurance on your own, outside of your employer. 
Also, you might be eligible for Disability Insurance Benefits or Supplemental Security Income through Social Security. However, getting an initial decision on your disability claim from Social Security can take up to 3 to 5 months.4 

Long-term care insurance

Long-term care insurance may help pay for part of your care if you’re eligible. If you have long-term care insurance, you usually become eligible for benefits when you can no longer perform or need help with 2 out of 6 Activities of Daily Living (ADLs). Examples of ADLs include eating, bathing, dressing, toileting or continence, and transferring or getting in and out of bed.5
Most policies have a waiting period, also known as an elimination or deductible period. This means you’ll pay for your care out-of-pocket at first, until your waiting period is complete, and then you can start long-term care benefits under your policy. 

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1. With respect to federal taxation only. Contributions, investment earnings, and distributions may or may not be subject to state taxation. 2. Revenue Procedure 2022-24, IRS, 2023, 3. “Retirement Topics - Catch-Up Contributions,” IRS, October 26, 2022, 4. “What you should know before you apply for Social Security Disability benefits,”, Social Security Administration, 5. Peter F. Edemekong, Deb L. Bomgaars, Sukesh Sukumaran, and Caroline Schoo, “Activities of Daily Living,” National Library of Medicine, November 19, 2022,

This information is general in nature and provided for educational purposes only.

Fidelity does not provide legal or tax advice. The information herein is general in nature and should not be considered legal or tax advice. Consult an attorney or tax professional regarding your specific situation.