American Express

Despite these complexities, it is crucial to understand your health insurance  options and maximize your benefits at the least possible cost. A good health insurance  plan can be the best employee benefit you receive because its coverage  would be extremely expensive to replicate on your own. For this reason, many  employees fear losing their job or are reluctant to switch companies if health  benefits at the new company are not equal. Adequate health insurance is critical  because you can easily be devastated financially if you or a family member needs  major surgery or long-term medical care.

The optimal traditional fee-for-service indemnity policy is divided into two plans. The basic plan reimburses you for doctors’ bills, drugs, outpatient surgical procedures, and other medical expenses up to a certain annual dollar limit. The second plan, called major medical, covers extended hospital visits and other major medical procedures. Both the basic and major medical plans, if offered by an employer, usually cover the employee, his or her spouse, and any children age 23 or younger if the children attend school. The basic plan, which may be offered directly by your employer or by an outside insurance company, usually applies deductibles of $100 to $1,000 or more before your bills are reimbursed. Some companies impose a fixed annual deductible of $100 or $200 for all employees; others tie the deductible to your salary level. After you pay the deductible out of your pocket, all further bills are usually reimbursed for 80 percent of your cost, up to a specified annual limit. Once you have spent more than that limit, you are reimbursed 100 percent.