Health Insurance Benefits

Health insurance benefits in the modern climate can be confusing and arcane. Laws are changing every day, and people are genuinely curious about the future of their healthcare. Here's everything you need to know.

Hospitals and doctors charge obscenely high prices for services. Your health insurance company negotiates lower-cost services that benefit both you and them, up front. Insurance companies are experienced with this sort of negotiation, whether you're in network or out of network. Hospitals have incentives to agree on price negotiations. In fact, the initial bill after insurance negotiations can be reduced by between 20 and 50 percent.

Secondly, having insurance allows you to avoid ER charges, which can range up to $24,000 just for a sprained ankle. The average charge for an ER visit was $1,233 in 2008, and it's only climbed since then. Worse, many insurance plans require you to pay your full deductible for ER visits.

Forty percent of these visits are entirely unnecessary, and the ER shouldn't be a point of entry for health issues — ER exists only for true medical emergencies. Healthcare allows you to avoid ER visits by going to a PCP, urgent care center or specialist instead. Health insurance allows your doctor to address most health problems before they become major. It saves you money and time.

Finally, healthcare gives you access to preventative services which can keep you from getting sick in the first place. This applies even if you haven't met an annual deductible, but usually, services have to be in network.

What Is Health Insurance?

Health insurance is the practice of paying a set amount of money per month, called a premium, which grants you benefits that help pay for specific healthcare needs and expenses. These benefits can allow you to get regular checkups with the doctor, as well as obtaining treatment for long-term sickness. Individual healthcare can currently be purchased either through the healthcare marketplace online, or on your own.

These "individual health insurance" plans, which can also cover an entire family, are what keeps our healthcare costs low and affordable for both you and your family members.

Why Should I Have Individual Health Insurance?

Nobody ever knows when they might need medical help. Insurance helps you not only to stay healthy, but to prepare for unexpected situations. Under most health plans, many preventative services like regular doctor's visits are 100 percent covered, or require just a small copay.

Further, you should have healthcare because it's the law. The Affordable Care Act requires all Americans to purchase health insurance and imposes tax penalties for those who don't carry qualified coverage.

Tax Reporting and Your Benefits

Your IRS Form W-2 includes employee and employer contributions to a range of benefits including healthcare in the form of flex spending, medical, dental, and more. The ACA requires employers to list any sponsored dental and medical costs on a W-2 form and the 1095 forms they file.

Other Benefits Reported on IRS Form W-2

Your W-2 form will also list DCAP contributions (box 10), UW Voluntary Investment Program HSA combined tax-exempt contributions (Box 12), and certain retirement plans (Box 13). Retirement plans are not considered pre-tax deductions.

Health Coverage Reporting on IRS 1095 Form

The 1095 from the IRS is a proof of insurance form. This form must be filed with your taxes every year to prove that you carried qualifying health coverage and avoid penalties. Your employer or health insurance provider will send you this form.

Essential Health Benefits

The ACA requires that all health plans, both group and individual, provide for a given core healthcare package of services. These are called Essential Health Benefits. This is intended to help balance comprehensive coverage with service affordability, to cover necessary basic services and keep out-of-pocket expenses down.

EHB Categories

The basic EHB categories include ambulatory services, emergency services, newborn and maternity care, hospitalization, mental health care and substance abuse care, prescription coverage, rehabilitation, lab testing, preventative and general wellness services, chronic disease treatment, and pediatric services to include vision and oral care.

If you need help with health insurance benefits, you can post your legal needs on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Stripe, and Twilio.