benefits | Financial Crooks

Recently, I reviewed our work-related dental insurance to determine whether or not we were losing money insuring our children given the high premiums for orthodontic coverage and the low payout for braces. In that case we were (almost) breaking even with our premiums equaling what we will get back. It made me wonder, though, whether we are getting any real benefit from our eye care insurance. Is it worth paying the health insurance premiums for eye tests and eyeglasses or are we losing money?

What Do We Pay for Eye Care Insurance?

We have our health coverage for eye care through my husband’s employment. It’s one of the “shopping cart” of benefits on which he can spend his benefit money.

For our family, the premium is $240.96 per year.

What Do We Get for Vision Care Coverage?

For this we receive:

$50 per 24 months per person for eye exams
$250 per 24 months per person for eye glasses

Are We Winning? Or Are We Paying More for Eye Care Than We Are Receiving?

Well, this is where the math comes in.

Reimbursement for Eye Exams

First, we don’t pay anything for eye exams for our children because we live in Ontario where the provincial health plan covers those costs.

My husband and I do have annual eye exams, though, and the cost is $60 each. So we use the full $50 each—but we are only entitled to that reimbursement once every 24 months each.

So it would be inaccurate to say we are getting back $100 of the $240.96 per year. In fact, we are using $100 of 2 x $240.96 which is $481.92. Or $50 of $240.96.

So if we apply the cost of our eye exams to our premiums, we still need to get back an additional $381.92 every 2 years to break even. (Or $190.96 each year.)

Reimbursement for Eye Glasses

This one is not obviously a win either. I have had the same eye glasses for over 15 years. Each year the Optometrist confirms that I still need that same prescription. I suppose one of these days that may change (or the glasses may break) but for now, I am not saving any money from being insured.

My husband’s prescription has also not changed for more than 5 years. He did get a new pair about 6 years ago but how often does your child destroy your glasses once they are past the toddler age? I would guess that he is not saving any money from being insured, either.

But what about the children? Ah, now we’re talking $$$!

For 8 years (each) neither needed eye glasses. If we’d been paying this benefit premium for all of those 8 years, we’d be financially in the hole over $1500. However, this cost only started when they downgraded my husband’s benefits a couple of years ago. So fortunately, that’s not the case.

Anyway, our children now need eye glasses. In fact, they’re at that terrible age where they need a new prescription every year. While they both have re-used frames a few times, they need new lenses annually.

This is where it improves. Generally, their eye glasses cost from $150 to $275 depending on the frames and the lenses. Being ~~easily manipulated~~ kind parents, we don’t shop based solely on price. We long ago realized that if our children like their glasses, they will wear them and take care of them. (Which is how they sometimes use the same frames for over 2 years when some of their friends have lost, smashed or mangled theirs within days of their purchase.)

Again, we can’t simply say, ok, that means we claim $300 to $550 per year and get back $190.96. The eye glass refund of $250 per person is only once every 24 months.

So if we paid $250 or more for a pair of eye glasses for one person, that would pay out our cost of $190.96 for that year. And we would be ahead by whatever we paid for any other person that year for eye glasses up to $250.

But the next year, we would still have to pay the premium but we wouldn’t be eligible for any eyeglass reimbursement.

So we break even, or come out ahead, if we are reimbursed for eye glasses for at least $381.92 every two years.

But we don’t always. Sometimes, the bill is only $300. That leaves us with an $81.92 loss over a 2-year period.

(Wait, you say, why didn’t you just use up the rest of the $250 entitlement the second year? See further on for the details.)

Summary Comparison of When We Lose Money on Our Vision Care Premiums

Premium paid first year: -$240.96
Reimbursement for adult eye checkups: $100
Reimbursement for eyeglasses at $150 each: $300
Premium paid for the second year: -$240.96
Reimbursements for the second year: no eligibility if we want to maximize our savings before age 19
Total: -$81.92

We lost by paying $81 more over two years than we get reimbursed.

Summary Comparison of When We Gain Money on Our Vision Care Premiums

Premium paid first year: -$240.96
Reimbursement for adult eye checkups: $100
Reimbursement for eyeglasses at $250 each: $500
Premium paid for the second year: -$240.96
Reimbursements for the second year: no legibility
Total: $118.08

We win by $118.

A Word of Caution about Health Insurance Claim Limits per 24 Month Period

How I Lost Money Claiming for Eye Glasses

Be careful about how your insurer decides what a 24-month period is, too.

When we first started using this insurance policy, I made a claim of $200 for one child’s glasses in the first year. The insurer reported there was $50 of coverage left. So the next year, I submitted the eye glass receipt for the new prescription expecting to get $50 reimbursed. It was.

The next year, I waited carefully to ensure it was 24 months since the first $150 claim. When it was, I bought my child a third pair of eye glasses and submitted the receipt, expecting to get back $250. It was refused. I was told there was no coverage until 24 months after the second reimbursement of $50!

This despite the policy booklet which says “Coverage is based on a 24-month period, starting from the date the first expense is incurred.”

I still don’t understand how I was refused. But I did learn not to make a small claim and start the 24-month wait clock again. The way I think of it, that $50 claim probably cost me one full pair of eyeglasses because my child’s coverage will end when my child is 19.

The Moral of the Story of Vision Care Insurance

I guess what I learned from exploring our vision care premiums and reimbursements is that we are actually very close to losing money on our eye health plan. I’d strongly suggest anyone who has optional eye care insurance check their own numbers and make sure they are actually saving money by being insured.

And as soon as our children are no longer eligible for eye glasses under my husband’s insurance, I suspect we will drop our coverage.

Why Is the Early Fall a Good Time to Review the Cost and Benefits of Health Insurance?

In our case, each year you have to select what coverage you want for the next year in the autumn. By evaluating whether our health insurance is too expensive to be worth it in September, we are better prepared to make a decision of what to buy in November.

It’s possible your employer uses a different deadline for selecting your health benefits. Check with your HR department if you’re not sure what coverage you may have and when you must make any decisions about it.

Related Reading

Are We Losing Money On Our Dental Plan Because of Orthodontic Coverage for Our Children?

Join In
Do you pay for insurance to cover eye checkups and eye glasses? Is it saving you money? Please share your experiences with a comment.

A few years ago, my husband’s employer was taken over by another company. It didn’t take long for the benefits to get cut: we went from having good dental and medical coverage, and high life and disability insurance to being told we could buy selected benefits using a “shopping cart” funded with a percentage of his annual salary. Sound familiar to anyone else? Anyway, while reading the benefits info again recently, I began to wonder if we are actually losing money on the orthodontic coverage provided for our children.

Dental Plans May Strictly Limit Reimbursement for Orthodontic Work

The problem for the insurance company is that orthodontic work is expensive. It’s also becoming very common: to the point where no one teases kids about their braces any more because they see them on teeth in dozens of mouths. In fact when one of my children’s friends had braces put on, many of her classmates didn’t notice, and even when they did they couldn’t remember if she’d had them on for a year or if they were new.

So to reduce how much dental insurance plans have to pay out, or conversely to keep from having to raise the premiums unacceptably high, many plans limit the coverage for orthodontic work.

Our plan pays nothing for orthodontic work for adults.

For dependant children, it has set a maximum lifetime claim of $1500 per child.

Have you checked the price for a regular course of treatment for orthodontic work? Let’s just say $1500 isn’t going to get you through the first appointment much less the following two years.

How Our Dental Plan and Premiums Work

Our dental plan has another interesting twist:

If you want ANY dental coverage for your child, you have to insure all of your children and you must pay the orthodontic premium for each child.

That sounds reasonable at first glance: they don’t want you only paying premiums for your child with enamel problems and teeth coming in everywhere but where they are needed, and not paying premiums for your three other children who have perfect teeth and never need even a filling or a polishing.

It’s when you look into the details of that “orthodontic premium for each child” that you wince.

And they charge an orthodontic premium for each year of your child’s life until they are 19.

How Much Premium Will I Pay for Orthodontics?

Under our plan, for our family, the orthodontic premium is currently $140.40 per year.

So someone with two children enrolled from birth till when the premiums stop being applied when each child turns 19, should expect to pay $2667.60 or more in premiums.

That doesn’t even assume that the premiums increase. For us, it’s increased, of course, even in the four years we’ve had this insurer from $111.36 to $140.40 per year. That’s about a 26% which is well above the rate of inflation these past 4 years.

Will We Lose Money Paying Our Orthodontic Premiums for Our Dental Plan

If we had been enrolled in this plan for years, then yes, we would definitely have lost money. We would have paid over $2667.60 in premiums to get a maximum reimbursement of $1500 for our one child who needs orthodontics.

In our case, though, we were only forced into this plan when our children were older. Will we still lose money?

Yep. Assuming no further premium increases, and based on the actual premiums we’ve paid to date, we will pay $1508.64 in premiums to get back the $1500 for which our one child is eligible.

Sigh.

Benefits? Who called this beneficial? For us to have to give money to the insurance company?

I can just imagine how any employee feels who has several children who never need orthodontics!

Admittedly, there should be a benefit to someone who has several children who need orthodontic work done.

Why Would We Get Dental Coverage for Our Children If We’re Going to Lose Money on the Orthodontic Premium?

First, in our plan you can’t opt out of coverage for your children unless you can prove they have coverage under another plan. (I’m not sure whether you could fight this in a court or not.)

Second, the dental insurance also provides coverage for all of the other more routine dental work a child needs: cleanings, fillings, x-rays, examinations etc.

I believe we are saving money by having coverage for those procedures although I would have to start adding up our bills to be sure as our children have been blessed with very healthy teeth.

Well, at least we’re saving money–unless we could not convince our dentist to drop his billing rate…. Some dentists will charge less for the same procedure if you have no insurance. They don’t have to, of course, but they may.

Keep an Eye on Your Benefits and Make Sure They’re Benefitting YOU and Not the Insurer

This review has taught me that it’s important to keep an eye on our benefits. For example, if I was a younger parent I might very well be lobbying our HR department to make changes to this Orthodontic insurance premium. Like dropping it altogether!

I think I’d better check our Eye Health coverage next. Something makes me wonder if we’re breaking even on that coverage or not. And at least that coverage can be waived if we’re losing money!