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Inside this Article
What
Kinds of Vision Insurance Plans Are Available?
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Vision insurance
typically comes in the form of either a vision benefits package
or a discount vision plan.
Typically,
a vision benefits package provides enrollees
eye care services in exchange for an annual premium or
membership fee, a yearly deductible (a dollar amount)
for each enrolled member, and a co-pay (a smaller
dollar amount) each time a member accesses a service.
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A discount vision plan provides eye care at
fixed discounted rates after an annual premium or
membership fee and a deductible are paid. Both kinds
of vision insurance can be custom-designed to
meet the different requirements of a wide range of
customers, including school districts, unions, and big
and small companies.
Vision
insurance - generally covers the following basic
services:
- Annual eye
examinations, including dilation
- Eyeglass frames
- Eyeglass lenses
- Contact lenses
- LASIK and PRK
vision correction at discounted rates
Generally, services
acquired from network providers are cheaper than
services from out-of-network providers.
Also, remember that
reputable managed vision insurance companies
should have a quality assurance mechanism.
Vision
insurance - Vision Benefits Within Defined
Contribution Plans
Employees
traditionally have received health insurance and, in
some cases, vision benefits through a system
set up by employers known as defined benefits plans.
In these plans, the employer sponsors a usually
limited selection of group health benefits. The
employer then pays fully or in part for these
benefits.
But in recent years, a
few U.S. employers have begun to offer their employees
defined contribution health benefit plans — also
called consumer-directed or self-directed health plans
— instead of traditional defined benefit health
plans. These plans may be funded through tax-free
dollars that are deposited in lieu of additional
salary into special accounts.
In defined
contribution plans, employees are given a
"menu" of choices for healthcare. Vision
benefits including at least partial payments for
eye exams and vision correction often are listed among
these choices.
Vision insurance -
How Does a Defined Contribution Plan Differ From a
Defined Benefit Plan?
With a defined benefit
plan, your employer sponsors a limited selection of
group health benefits. These include a health
insurance policy and, perhaps, a prescription drug,
dental, and/or vision plan. In exchange for
these health benefits, you pay a premium that is
withheld from your paycheck monthly and treated as a
taxable, payroll deduction.
In contrast, a defined
contribution plan provides you (through your employer)
a certain amount of tax-free dollars to purchase your
own health insurance and pay for other out-of-pocket
medical expenses.
Vision
insurance - Types Of Defined Contribution Plans:
Vision insurance -
Flexible Spending Account (FSA) plan
With an FSA, the
portion of your salary deposited by your employer for
tax-free healthcare spending must be used within
a 12-month period or it reverts back to your employer.
You cannot use an FSA to pay for health insurance
premiums or preventive care such as eye exams.
Vision
insurance - Cafeteria plan
In this type of plan,
your employer takes a portion of your salary and
deposits it into a non-taxable account to be used for
healthcare spending.
You can choose from a
"menu" of health coverage options that can
include vision benefits.
Vision
insurance - Health
Reimbursement Arrangement (HRA) program
An HRA is similar to
an FSA (see above), except that you don't lose the
money if it isn't spent within a certain time period.
Unlike an FSA, you can use money from this fund to pay
for preventive care such as eye exams and health
insurance premiums.
Vision
insurance - Health
Savings Account (HSA)
An HSA may be funded
directly by your employer or through payments in lieu
of extra salary that ordinarily would be paid directly
to you. You must be covered under a high-deductible
health insurance plan to participate. The amount of
money deposited in this account cannot exceed the
annual deductible of your regular health insurance
plan. If these conditions are met, you can use your
HSA to pay for preventive care such as eye exams.
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