How to Read Your Health Insurance Explanation of Benefits Statement

People generally know less than they think they do when it comes to understanding their health benefits — which can lead to problems down the road. According to the American Institutes for Research, 3 out of 4 people said they felt confident that they knew how to use their health insurance. But only 1 out of 5 could accurately calculate their out-of-pocket costs. This lack of knowledge can hurt when the explanation of benefits (EOB) shows up in the mail. The EOB is a form that identifies the treatment or services you were provided and what amount your insurance will pay, says Erin Singleton, chief of mission delivery at the Patient Advocate Foundation, a nonprofit that provides professional case management services to people with chronic, life-threatening and debilitating illnesses. The EOB often says “This is not a bill” in large letters, and then has a chart or balance sheet detailing …

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Rethinking Your FSA (Is my FSA still worth it?)

Your Flexible Spending Account (FSA) has undergone some changes over the years. Most notably, over-the-counter medication such as cough, cold and flu medicines and pain relievers cannot be reimbursed through your FSA, unless the items have a doctor’s prescription or another supporting document. While it all may sound confusing and frustrating at times, these health-spending accounts are still among the best ways to pay for medical expenses that are not covered or paid in full by your medical, dental or vision plans—for you or any dependent. This tax-advantaged account can help your dollar go much further. Here’s how: Let’s say you put away $1,000 in your FSA for the calendar year. An average income will be taxed 25% by the federal government. Your FSA investment, however, is not taxed. The means you’ll have $1000 to spend on medical expenses, versus only $750. (That does not include state income tax, which …

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