Illuminating the Truth: Employee Benefits & Insurance Myths vs. Facts

There’s a lot of insurance information out there, and sometimes it’s hard to separate fact from fiction. But as Jonathan Frakes, the host of the television show Beyond Belief: Fact or Fiction? always said, you must have a discerning eye to separate what is true from what is false.

Test your insurance knowledge!

How well do you know your employee benefits insurance options? We’ll give statements about different kinds of insurance you’ll find in an employee benefits program, and it is your job to decide whether it’s a myth or fact.

Question 1

Once my employees are on a health insurance plan, it immediately pays 100% of their medical and prescription costs.

Myth or fact?

Myth. It depends on what kind of health plan you have for your employees. A full-coverage health plan will pay 100% of the costs, but other plans will have costs such as premiums, deductibles, copayments, and coinsurance. You will need to look at the specifics of your plan to see what it covers for your employees.

Question 2

If I’m interested in group health insurance for my small business, cost-effective plans are available.

Myth or fact?

Fact. You can purchase cost-effective group health insurance if you have a small business. One option is the Small Business Health Options Program (SHOP), which is one option among many. Choose the best group health option for you and your employees.

Question 3

Unlike self-funded plans, a fully insured health plan does not have consistent costs, and you have to purchase stop-loss coverage to minimize the risks.

Myth or fact?

Myth. A fully insured plan has fixed premiums and costs. All claims are managed by an insurance company that takes on the costs associated with employee medical claims. On the other hand, self-funded plans can have cost fluctuations due to employee claims and can be riskier, but stop-loss coverage helps mitigate those financial risks.

Question 4

Level-funded plans are the same as fully insured health plans.

Myth or fact?

Myth. Level-funded plans are not the same as fully insured plans. They’re a hybrid of fully insured and self-funded health plans, where risk is shared by the employer and the insurance carrier and protected by stop-loss insurance.  

Question 5

Disability insurance helps protect employees from both worst-case scenarios and other causes of disability insurance claims, such as pregnancy, cancer, mental health issues, musculoskeletal disorders, digestive disorders, and fractures/strains/sprains.

Myth or fact?

Fact. Disability insurance protects employees from unforeseen injuries that may arise.

Question 6

Life insurance is a risk management tool that helps secure your employees’ financial future.

Myth or fact?

Fact. Life insurance helps your employees’ loved ones with expenses after their death. Some policies allow early access to pay expenses that come with disabilities and aging. But this depends on the policy you have for your employees.

Question 7

If my employees want pet insurance, a single plan will cover all their pets.

Myth or fact?

Myth. Well, a partial myth. It depends on the plan. Some plans cover all pets; in others, employees must buy a separate plan for each pet. It depends on the kind of pet insurance you obtain for your employees.

Insurance doesn’t need to be a mystery

Luckily for you, you don’t have to play Sherlock Holmes when it comes to insurance. No matter what kind of insurance you provide your employees, spend the time to learn the nuances of your plan and to contact a professional advisor for any help or assistance.


Content provided by Q4intelligence

Photo by mangostar