FAQs

Medical

What can I do as a consumer to save money on my healthcare expenses?

After a claim is processed what do I owe?

Do my dependents have to visit the same dentist that I select?

How can I change my beneficiary for my basic life/ad&d policy?

How do I contact our carrier?

I had a baby; do I have to wait until open enrollment to add him?

If I am having problems with a claim, or can't get a satisfactory answer through our medical/dental/life/disability carrier's customer service department, what can I do?

If I have dental coverage, may I go to any dentist I choose?

What is an "Explanation of Benefits" (EOB)?

If I leave my current employment will I still be covered by my health insurance?

My spouse recently lost his/her job. Can he/she come onto our insurance?

What do the terms "formulary" and "non-formulary" drugs mean?

What is Guarantee Issue (Life Insurance)?

Why is it that when I get a prescription filled, it's a different and/or odd amount each time?

401k

What is a 401(k) plan?

What happens to the money I put into my 401(k) plan?

Do employers or the government guarantee 401(k) accounts?

When am I eligible to participate in my employer’s 401(k) plan?

What is vesting?

How much may I contribute to my 401(k) plan each year?

Can I roll a previous 401(k) account or other retirement savings into the plan I have now?

If I withdraw my funds from my 401(k) plan fund early, will I have to pay a tax penalty?

If I change jobs, can I leave my money invested in my current employer’s 401(k) plan until I retire?

How do I qualify for a hardship withdrawal from my 401(k)?

How much of my total 401(k) account can I borrow?

How much will a loan from my 401(k) plan cost me?

How soon do I have to repay a loan from my 401k) plan?

How should I track the rate of return on my investments?

What is risk tolerance, and why is it important?

How can diversification reduce my risk?

What types of investments tend to have the highest risks?

What are some low-risk investments?

What is asset allocation?

What is an asset allocation fund

What is a mutual fund?

What types of mutual funds are there?

What kinds of fees are associated with mutual funds?

How can I research a mutual fund?

 


Medical

What can I do as a consumer to save money on my healthcare expenses?

a) Take advantage of outside discount savings on prescription medications. For example: $4 generic program at Wal-Mart, and Sweetbay, Free antibiotics at Publix and other programs available to the public that can provide cost savings on medication.
b) Comparison price shopping- Almost all the insurance companies offer online tools and advice on how to obtain cost estimations BEFORE receiving treatment. Knowing the cost of a procedure can help you make an informed decision about where to go for care.
c) Ask questions - many carriers also offer nursing and medical advice that allow you to connect with a community of medical professionals that can help you navigate the healthcare system and find the most affordable ways to manage your healthcare costs. Also, ask your Doctor questions and don’t be afraid to request a second opinion.

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After a claim is processed what do I owe?

After a claim is processed the member should receive what is called an Explanation of Benefits (EOB) from the insurance carrier. This EOB shows the amount allowed, amount paid by the carrier and last but not least the member responsibility. 

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Do my dependents have to visit the same dentist that I select?

No, but keep in mind that there are greater benefits in obtaining services from a preferred provider vs. a non-preferred provider.

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How can I change my beneficiary for my basic life/ad&d policy?

You will need to fill out a change of beneficiary form.

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How do I contact our carrier?

There is a toll free customer service phone number on the back of your ID card.

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I had a baby; do I have to wait until open enrollment to add him/her?

No, the birth of an infant is considered a "qualifying event", which means that you have 30 days to submit your new dependents information so that he or she may be effective from the date of birth.

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If I am having problems with a claim, or can't get a satisfactory answer through our medical/dental/life/disability carrier's customer service department, what can I do?

Contact, The Case Companies 239-482-8002 and ask to speak with Marie Gunias (Benefits Customer Service). She will research the claim/issues on your behalf. (A HIPPA Authorization form may be required)

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If I have dental coverage, may I go to any dentist I choose?

Yes, but keep in mind if you choose to visit a dentist out of the network your benefits will be reduced according to the services performed.

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What is an "Explanation of Benefits" (EOB)?

Explanation of Benefits is a statement provided to you by the carrier, which explains what was covered and paid by the insurance carrier and what if any member responsibility remains.

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If I leave my current employment will I still be covered by my health insurance?

Your coverage will end the last day you worked or on the last day of the month following the date of termination, depending on how your group is set up, but you can elect to continue and pay for the coverage yourself for up to 18 months under COBRA. Upon termination you will be mailed this information.

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My spouse recently lost his/her job. Can he/she come onto our insurance?

This situation is called a "qualifying event", which would make him/her eligible to be put on your plan the first of the month following the event.  You will need a change form.

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What do the terms "formulary" and "non-formulary" drugs mean?

A formulary drug is a brand name drug that is preferred over non-formulary drugs because it is available at a lower cost.

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What is Guarantee Issue (Life Insurance)?

The maximum amount of life insurance you can purchase without having to provide Evidence of Insurability (answering medical questions).

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Why is it that when I get a prescription filled, it's a different and/or odd amount each time?

Usually it's because your total prescription cost is lower than the copay. Prescription drug costs change daily. If the cost is lower than the copay calls for, the pharmacy will charge the lower amount.

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401k

What is a 401(k) plan?

A 401(k) plan is a salary deferral retirement plan. Employees agree to put part of their salary into a special savings and investment account. The 401(k) plan offers a variety of mutual funds to money market accounts.

There is an important distinction between a traditional 401(k) and a Roth 401(k).  In a traditional plan, the money invested isn't counted as income when you complete your annual tax return. For example, if you earn $35,000 but put $5,000 into a 401(k) plan, your taxable income for the year would be only $30,000. Earnings are taxed as regular income when withdrawn.  In a Roth plan, after-tax dollars are invested, but earnings are withdrawn tax free.  In both options, earnings accumulate tax free, and a 10% early withdrawal penalty may apply to distributions taken prior to age 59 ½.

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What happens to the money I put into my 401(k) plan?

The money you put into a 401(k) plan is invested according to the choices you've made from a list of choices offered by your employer. These choices typically include stock and bond mutual funds, and money market funds.

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Do employers or the government guarantee 401(k) accounts?

Employers never guarantee 401(k) accounts. They are considered "fiduciaries" of 401(k) plans, which means they are legally responsible for supervising the plan and the money you invest.

This supervisory relationship obligates the employer "to protect your financial interests by choosing and monitoring reputable and competent administrators and investment managers.” Employers must give plan participants at least three distinctly different investment choices, each having a different level of risk. You must also be given the opportunity to move your money among these investments at least quarterly and sufficient information to make sensible, informed investment decisions.  Your employer, however, doesn't offer you protection against any investment losses you may suffer.

Although most traditional pension plans are insured by the federal government, there is no such guarantee for 401(k) accounts. The federal Pension Benefit Guaranty Corp. insures traditional pension plans because the government wants to ensure that the payments a company promises its retirees will indeed be made. However, 401(k)s do not involve a promise of future benefits. The value of your account will rise and fall over the course of the years, and you could theoretically be wiped out if your investments perform badly.

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When am I eligible to participate in my employer’s 401(k) plan?

You may participate as soon as you meet the eligibility requirements your employer established at the time the 401(k) plan was adopted. Eligibility requirements are generally based upon a participant's age and years of service with your employer. Some company plans may allow for entry only two times per year, and you should check with your company's benefits administrator to verify the allowable entry dates for your plan.

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What is vesting?

Vesting is the process by which a plan participant earns the right to keep his or her employer-financed accounts upon termination of employment. Note that the employee contributions are always 100% vested - vesting schedules only apply to employer derived funds. Each plan has a vesting schedule that defines the percentage of the account that the participant keeps. The remainder is forfeited by the participant and reverts back to the plan (not the employer). This "forfeiture" is then "reallocated" to the remaining participants or used to finance future matching contributions for the employer or used to pay plan expenses.
For example, if the vesting schedule on the employer match is "20% per year of service," an employee who quits after three years of service will keep 100% of his or her own contributions (plus investment gains or losses) but only 60% of the employer matching account.

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How much may I contribute to my 401(k) plan each year?

Here are the factors to consider when determining your maximum contribution limits:

For 2011 you may make contributions up to $16,500 not to exceed the lesser of 100% of your net earned income pay or $49,000.00. The deferral limit is the lesser of 100% of net earned income or $16,500. The $49,000 limit is the Defined Contribution annual contribution limit for the employer contributions.

Plan participants who are or will turn 50 years of age during the calendar year are eligible to make catch-up contributions of $5,500. However, the participant's regular plan contributions must be reached before catch-up contributions are allowed.

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Can I roll a previous 401(k) account or other retirement savings into the plan I have now?

Yes, as long as your employer has not indicated otherwise in your company's plan. Effective January 1, 2002, retirement plan participants and IRA investors were able to move their qualified retirement plan assets between retirement plans in the public, private, education and nonprofit sectors as they move between employment in those sectors. Monies may be moved between (to and from) 401, 403(b) and governmental 457 plans as well as Traditional IRAs. Previous regulations did not permit the commingling of assets unless it was from a like plan.

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If I withdraw my funds from my 401(k) plan fund early, will I have to pay a tax penalty?

The Internal Revenue Service levies a penalty on people who withdraw money from their 401(k) plan before they reach a certain age. As a general rule, you'll be hit with a 10% penalty on any withdrawals you make from a 401(k) plan before you have reached age 59 1/2. You will also have to pay taxes on the money you take out, just as you would if you waited until after you turned 59 1/2. In rare cases, the IRS will waive the 10% penalty on early withdrawals. For example, you can avoid the penalty if you are disabled, or if you need money for medical expenses that are greater than 7.5% of your adjusted gross income.

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If I change jobs, can I leave my money invested in my current employer’s 401(k) plan until I retire?

It depends on the design of the plan, but if you have a 401(k) account with your current employer and eventually change jobs, you may be able to leave your 401(k) with your old employer until you retire. Your ability to do so will be based on the size of your vested account balance. If you have more than $5,000 in the plan and you're under the age of the plan's designated retirement age, you have the legal right to leave it where it is. But if your vested balance is less than $5,000, your employer has the right to pay it to you whether you wish to receive it or not. However, you may choose how to take that distribution. It can be made directly to you, to another employer's 401(k) plan or to a rollover IRA.

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How do I qualify for a hardship withdrawal from my 401(k)?

Hardship policies vary depending on plan design.  If the plan allows, the distribution must be made on account of an immediate and heavy financial need where you lack other available resources. You may elect, if the plan allows, to receive a hardship distribution of all or part of your vested balance under certain circumstances to cover the costs incurred with the following:
•Medical expenses for you, your spouse or your dependents
•Costs related to the purchase of your principal residence
•Payment of tuition, related educational fees, and room and board expenses for the next 12    months of post-secondary education for you, your spouse and your children/dependents
•Payment to prevent a foreclosure or eviction of your primary residence
•Paymens for burial or funeral expenses for your family members
•Expenses for the repair of damage to your principal residence that would qualify for the casualty deduction
Your elective deferrals are suspended for 6 months after the receipt of the hardship distribution. If you are under age 59 1/2, the 10% early withdrawal penalty will apply to the distribution.

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How much of my total 401(k) account can I borrow?

If your employer allows you to borrow from your 401(k) plan, the maximum loan is half of the value of the account. Federal law will limit the amount to the lesser of $50,000 or 50% of the vested balance. Say you have $80,000 in your 401(k) plan. You could borrow up to 50% of the value of the account, which means you could get up to $40,000. However, if your 401(k) plan is worth $100,000 or more, federal law would prohibit you from borrowing more than $50,000 -- even if your account is worth millions. However, some plans impose even lower limits; the plan document may limit the maximum amount for loans and restrict the availability of loans.

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How much will a loan from my 401(k) plan cost me?

When you borrow money from a 401(k) plan, the Internal Revenue Service requires that you charge yourself a "market rate" for the loan. The market rate is considered the rate you'd pay if you got the loan from a bank instead. Usually, the market rate is one or two percentage points above the prime rate. So, if the prime rate is 7%, the rate on your 401(k) loan should be 8% or 9%. Loan processing and administrative costs vary by plan. Essentially, the loan becomes a fixed-rate investment in your own 401(k) account. When you retire, you'll get all the money back, but the interest you pay on the loan with after-tax dollars will be taxed a second time when you withdraw it.

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How soon do I have to repay a loan from my 401k) plan?

If your 401(k) plan permits loans, you will have to repay the loan through a series of regular payments. More than likely, your employer will automatically deduct the payments from your regular paycheck -- much as it automatically deducts your 401(k) contributions. The entire amount you borrowed must be repaid within 5 years with the exception of a principal residence loan which allows for a reasonable repayment period. Most plans allow up to 25 years of repayment, but the term of a loan can't extend beyond your normal retirement date, as defined by the plan. If you leave your employer, whether voluntarily or involuntarily, payment of the entire outstanding balance may be required prior to the last scheduled payment date.

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How should I track the rate of return on my investments?

The best measure of performance is called total return. This combines all interest, dividends, and capital gain distributions with changes in the market price of your investments. It is a far better yardstick to use than just the change in price over a period of time. To see how well your investments are doing, start a quarterly performance record.  Many online 401(k) accounts keep a running tally of your mutual fund returns, which allows users to track dividend payments as well as daily price fluctuations.

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What is risk tolerance, and why is it important?

Risk tolerance basically is the amount of psychological pain you're willing to suffer from your investments. For example, if your risk tolerance is high, you might feel fairly comfortable investing in future contracts or other types of securities that can go up and down like a roller-coaster. But if your tolerance for risk is low, you should stick to more conservative investments that aren't subject to wild swings in value.  Other factors determining risk tolerance include age, years to retirement, and other investments.

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How can diversification reduce my risk?

Portfolio risk can be reduced by diversification. The components of total risk are company risk (also called unsystematic risk), which can be reduced through diversification, and market risk (also called systematic risk), which can't. To illustrate, say all of your money was wrapped up in the stock of XYZ Corp., the largest widget maker in the world. XYZ is a fine firm, but this is still a risky proposition. First, XYZ's stock could be adversely affected by weakness in the overall stock market. This is market risk. Second, the stock could suffer if the widget industry falls on hard times. This is industry risk (unique to the industry, not the market as a whole). And third, XYZ stock could tumble for reasons unique to the company -- an unexpected shutdown of its plants, the loss of a key customer, or even the death of one of its key executives. This is company risk. About 70% of the risk you face as an investor is company risk.
If you instead had a little of your money in XYZ Corp.'s stock, a little money in a diversified mutual fund that owns several stocks, a little money in bonds and a little in real estate, the chances of your portfolio plunging suddenly would be greatly reduced.

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What types of investments tend to have the highest risks?

It's difficult to lump different types of investments into broad risk categories, in part because the way you invest in them could increase or decrease your risk. Since risk is based on volatility and uncertainty, buying future contracts themselves would certainly be included in anyone's definition of high-risk investing. Other investments that should be left generally to risk-oriented traders include financial derivatives, junk bonds, speculative stocks and the mutual funds that buy them. Precious metals have traditionally been considered high-risk investments, although the value of gold and silver has traded in a fairly narrow range over the past couple of years.

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What are some low-risk investments?

Virtually risk-free investments include U.S. Treasury bonds, bills and notes, which are backed by the full faith and credit of the U.S. government, and deposits at banks where accounts are insured for up to $100,000 by the Federal Deposit Insurance Corp (FDIC). But these investments protect only against the risk you won't get your money back. There's also inflation risk to consider. For example, if you buy a five-year, 5% certificate of deposit covered by FDIC insurance, and inflation soars to 10%, your principal will be losing 5% of its purchasing power each year. Also, Treasury bonds are risk-free only from a default basis. Treasury bond prices still move inversely to changes in interest rates. So there's really no such thing as a risk-free investment.

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What is asset allocation?

Asset allocation is the process of deciding how much of your investment portfolio should go into stocks, bonds or other asset classes (as opposed to picking individual stocks or bonds). Your decision in this respect is perhaps the single biggest factor that will determine your long-term investment outcome, so make it carefully. The basis of your decision is how much risk you are willing to take and your investor life cycle phase. More risk could mean, over the long term, a higher return.
A key factor that determines how well your investment portfolio performs is the way in which you allocate your assets. For example, if every penny you own is invested in high-risk, you have the potential to earn huge profits-or lose everything that you have invested. Conversely, if you have your money allocated among several different kinds of investments-stocks, bonds, money market funds and the like - your return might be lower but your chances of losing everything are less. Younger people can generally afford to take more risks than older people, in part because younger people simply have more working years ahead of them to earn money and bounce back from an investment that turns sour. Older people have to be more conservative, because their highest-earning days are behind them and recouping from a bad investment would be more difficult. An asset allocation strategy can help you to accomplish two important goals. First, it can help you to ride out the ups and downs of the market by diversifying your investment.  Second, it lets you adjust your exposure to risk, based on your desired levels of safety and return on investment.

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What is an asset allocation fund?

An asset allocation fund is designed to provide you with the diversification needed to weather many market or economic environments. They typically invest in a variety of assets -- domestic stocks, foreign stocks, bonds, money market instruments -- that you'd normally buy in separate funds. Many 401(k) plans now offer several asset allocation funds, each with a different investment mix and risks ranging from the very conservative to the very risky.

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What is a mutual fund?

A mutual fund is an investment company created under the Investment Company Act of 1940 that pools the resources of investors to buy a variety of securities, depending on the fund's stated objectives and management style. The investments typically are chosen by a professional manager. Mutual funds offer diversification and convenience even to small investors, and the thousands of mutual funds available today cater to every conceivable investment need and taste.

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What types of mutual funds are there?

There are a wide variety of mutual funds on the market. These are just some of the categories listed by the fund-trackers at Morningstar.

STOCK FUNDS

Aggressive Growth Funds: These funds seek to maximize growth in capital with little priority given to current income, such as dividends. Both the portfolio itself, such as smaller, new companies, and the investment techniques, may entail extra risk. They are typically considered one of the highest-risk categories of funds.

Growth Funds: Invest in the common stock of well-established companies. These funds seek capital growth with just a small emphasis on current income.

Growth and Income Funds: Invest in companies that can increase in value but also have an established record of paying dividends. Equal emphasis is placed on current income and future growth. These are generally considered moderate-risk funds.

Global Funds: Invest mostly in the stocks of companies that are traded globally, including the United States. Both global and international funds seek capital growth in the value of their investments.

International Funds: Invest in the stocks of companies that are strictly located overseas. Both global and international funds seek capital growth in the value of their investments.

Income-Equity Funds: Invest in companies with high dividend-paying stocks. The primary use of these funds is to generate a high level of income.

BOND FUNDS

Balanced Funds: A mixture of stocks and bonds, these funds look to preserve the value of principal, but also earn some current income and achieve some long-term growth.

Global Bond Funds: Invest in debt securities in companies and countries worldwide, including the United States.

Corporate Bond Funds: Invest primarily in the debt of American corporations and seeks a high level of income.

Municipal Bond Funds: Invest in bonds issued by state and municipal governments. This income, unlike regular bond interest income, is exempt from federal taxation.

U.S. Government Income Funds: Invest in a number of government securities including U.S. Treasury bonds and seeks current income through interest payments.

MONEY MARKET FUNDS

Taxable Money Market Funds: Invest in short-term, high quality securities such as certificates of deposit and Treasury bills. It seeks to maintain a stable net asset value, usually $1 a share.

Tax-Exempt Money Market Funds: Invest in securities that are exempt from federal taxes and in special cases state taxes for residents of that state.

Are mutual funds insured by the FDIC?
No, the FDIC does not insure mutual funds. The FDIC insures deposits of $100,000 or less in banks, credit unions and savings and loans. This sometimes surprises people who purchase mutual funds through their banks.

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What kinds of fees are associated with mutual funds?

Here is the overview of fees according to "The Wall Street Journal Guide to Understanding Money & Investing":
Management fees are annual charges to administer the fund. All funds charge this fee, though the amount varies from a fraction of 1% to more than 2%. Distribution fees (known as 12b-1 fees) cover marketing and advertising expenses, and sometimes are used to pay bonuses to employees. About half of all funds charge them. Redemption fees are sometimes assessed when shares are sold to discourage frequent in-and-out trading. In contrast, a deferred sales load, a kind of exit fee, often applies only during a specific period -- say the first five years -- and then disappears. Reinvestment fees are similar to loads; they're charged when distributions are reinvested in a fund. Exchange fees can apply when money is shifted from one fund to another within the same mutual fund company.

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How can I research a mutual fund?

It is important to have complete and accurate information when deciding on which mutual funds to invest in. A good place to start is the Market Research section of your provider’s website. There you will be able to access information regarding funds and get an evaluation of its performance. In addition, all mutual funds must publish a prospectus and produce annual reports that discuss how the fund has been faring and provide details about fund holdings.

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