Figuring out your insurance options during open enrollment season can be a bit of a headache.
Finding health coverage at the right price for you and your spouse is challenging enough – and adding kids into the mix only further complicates things. Many employers offer a family health plan, but this leaves many parents wondering: What about dental and vision insurance? And life insurance too?
Knowing when to sign your kids up for dental or vision insurance tends to be a gray area. And then you have to determine whether life insurance provided by your employer is enough to financially protect your family.
These decisions come down to what’s right for you, your kids, and your budget.
For instance, taking your newborn to the dentist or optometrist isn’t on the typical “new baby checklist” that parents work through. However, it’s also important to make sure that their vision is developing and their teeth are coming in correctly, with the American Academy of Pediatric Dentistry recommends that children visit the dentist within six months of getting their first tooth, or at age 1, whichever comes first.
Most health insurance companies will offer some form of vision or dental coverage for children, but deciding whether the coverage is right for your needs is a decision only you can make. The same goes for your life insurance coverage.
So, when should you add them to your dental or vision plan? And what are the most affordable life insurance options out there for your growing family?
What dental and vision options does your current plan cover?
Before you set up a dentist appointment, it’s important to make sure you know what your insurance plan does — and does not — cover. For example, some family health care plans offer dental and vision insurance for your kids. Other times, you need to look at stand-alone plans that offer those benefits. My family receives health insurance through my husband’s employer, and our kids receive health, vision, and dental insurance through our “family coverage” option. Each month, it only increased our total health insurance bill by a few dollars. – so the decision to enroll them was obvious.
If you find that family coverage for health, vision, and dental through your employer’s health insurance options is out of your budget, or doesn’t offer the coverage you want, don’t be afraid to shop around. Depending on where you live, you may be able to find a deal an incredible deal through HealthCare.gov and receive the coverage you need for your child.
Do kids need dental insurance?
If dental isn’t covered under your plan for your child, you may consider whether or not purchasing an independent dental policy is the best choice for your family. The Affordable Care Act states that dental coverage for kids is an “Essential Health Benefit.” Many parents read this and assume that it means that children’s dental coverage is required by law, as is the case with many other aspects of the ACA. However, this is not the case. Children’s dental coverage is “Essential” – which means that the ACA Marketplace has to make it available for purchase by parents and guardians.
While a pediatrician or a dentist may recommend an earlier visit, in reality, many parents may hold off on a dental visit until age 2 or 3 if their children’s teeth are slower to come in than expected. This might mean that you hold off on adding your kids to your family dental plan or purchasing them coverage through a child-only plan. But don’t wait too long. The CDC’s research shows that almost 23% of kids aged 2-11 experience tooth decay – you don’t want this to be your child.
We took our daughter to her first dental check-up at the age of two. Her pediatrician told us it would be fine to wait until age 3, but we opted for a visit anyway. We found out we needed to help her brush more in certain areas. We had coverage through my husband’s employer-sponsored dental plan for the children and opted to pay for any costs we may incur through our flexible spending account (although the routine exam was covered through our insurance).
Do kids need life insurance?
Every parent wants to protect their children. So it makes sense that they would consider taking out a life insurance policy on their kids. But it may not be the most suitable financial move in this situation. The primary purpose for buying life insurance is the need for a death benefit. The coverage is a means to provide financial protection for the dependents named as beneficiaries if the breadwinner passes away unexpectedly.
The person who may really need life insurance coverage isn’t your child — it’s you. Your family will be the ones dealing with lost income and funeral expenses, and an affordable term life insurance policy can provide your beneficiaries with much-needed financial protection in the event of your death.
Many employers offer life insurance as a workplace benefit, but there are downsides to these policies. First, coverage through your employer could end up being more expensive than buying a policy yourself. Next, the coverage limits offered may not be high enough to meet your needs. If your employer’s policy tops out at $250,000, but you’d feel more comfortable with $500,000 in coverage, that’s a life insurance gap you’d need to fill. Finally, employer-provided life insurance is tied to your employment status. So if you change jobs, your coverage could be terminated or you may have to pay a fee to take it with you.
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Do kids need vision insurance?
While you may not see many infants wearing glasses, vision problems aren’t unheard of in infants and young children, and vision insurance can cover these problems. And while a pediatrician or pediatric group may do basic vision assessments, and likely can treat common eye issues such as pink eye, some eye issues or vision concerns may require more specialization than a pediatrician can provide. A few common vision problems in young children are:
- Lazy eye
- Abnormal lens shape
- Weakened eye muscles
Because changes in infant vision may occur quickly and need immediate intervention, it may make sense for your family to enroll your kids in vision insurance from the time that they’re an infant as a just in case option. Having inexpensive vision coverage can offset an unexpected cost if something goes wrong. It’s also important to know what may and may not be covered by your primary health insurance plan, and whether or not vision insurance is worth researching as an additional plan for your children.
For example, a friend’s pediatrician scanned her 18-month-old’s eyes at a doctor’s appointment and found that she has astigmatism. An appointment was made with an eye doctor, and now her little girl has glasses.
Of course, keep in mind that your pediatrician may perform routine vision tests as your young child develops. Your pediatrician may be the best person to contact if you have a question or concern. For example, if your baby’s eyes aren’t tracking movement, looping in with the pediatrician is probably your best strategy.
Paying for unexpected dental and vision costs
Regardless of whether or not you decide to enroll your newborn in coverage that includes dental and vision, money saved in an FSA or HSA can cover dental and vision expenses, including checkups. Setting up an FSA (flexible spending account) or HSA (health savings account, with qualifying a high-deductible health plan) may help to offset the medical expenses that inevitably come with having kids.
The funds in these accounts are pre-tax, so they offer the added incentive of lowering your taxable income, as well as the total tax bill you pay each year. You can use the funds in an HSA or FSA for qualifying medical costs for you and members of your family, including doctor copays, prescriptions, glasses, contacts, cold medicine, and more.
Outside of an HSA or FSA, an emergency savings fund can help cover unexpected medical costs out of pocket without taking a financial hit. Building up an emergency savings fund can be a smart strategy to avoid going into debt in a worst-case-scenario. Even if your children are insured with comprehensive coverage, a medical emergency can still result in a bill of several thousand dollars. Having an emergency savings fund that is accessible will help to ease the financial stress of these out-of-budget expenses.
Know your potential expenses before you incur them
As is the case with most subjects regarding family and finance, enrolling your children in dental and vision insurance is something that only you and your spouse can decide, based on the needs of your family, the insurance plan or plans you currently have in place, and your current emergency fund. But knowing that these expenses and insurance options exist can help you make a plan and make sure you’re not caught unaware by a hefty dental or pediatric ophthalmologist bill. As always, reading the fine print of your insurance plan and getting on the phone with your insurance, or your medical provider can help answer any questions or confusion regarding payment, billing, and what is or isn’t covered. Speaking with a pediatrician can help you narrow down what your family’s medical needs are – and what kind of insurance coverage is right for you. Also, a pediatrician may be able to point you to providers who take your insurance or who may have added discounts for parents paying the bill in cash.
While early parenthood may seem like one expense piled onto another, anticipating the needs of your family can help prevent any unexpected bills and can help you create a workable, realistic budget.
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How we decided whether or not to get dental or vision insurance for our kids
Every family chooses the option that’s best for them, with many families comparing what other families did to try to get a sense of what makes the most financial sense. Here, real families share stories of how they decided how to cover their kids. Of course, check your own policy, talk with a financial advisor, and do your own research before making the best decision for you.
“I had the option to add dental insurance to my child’s plan (I pay for my own insurance), but it was an additional $20 a month. I called around to dentists in my area and learned that a dental screening was only about $50. I made the decision to pay out of pocket and save money for the first two years of my child’s life, before adding coverage for her, since I knew we were likely to only go to one preventative screening a year.” Anna, mom of a 4-year-old
“I had glasses as a kid, and so did my husband. There are pictures of my dad as a one-year-old with glasses too. Since my eye doctor told me that nearsightedness and other vision issues have a strong genetic component, it made sense for us to make sure that vision was covered under our child’s plan when we had our first kid. Sure enough, we ended up seeing a pediatric ophthalmologist when our son was 10 months old, and we’ve continued to be regulars there with our other kids.” Jen, mom to an 12-year-old, 9-year-old, and 4-year-old
“I didn’t check what our plan covered, and didn’t even think of vision being separate from a medical plan. We had a high-deductible plan through my wife’s work, but I never really read through the details. We were referred to a specialist when our son was around 18 months because he had a blocked tear duct. As we called around for specialists, I was surprised to be asked about vision insurance and realized that if my son did need treatment, it might not be covered. Eventually, we were able to work it out and my son was able to get the procedure he needed, but it took a lot of calling around and time on the phone with our insurance company. I learned to never assume!” Elisa, mom to a 5-year-old
“Our town has so many pediatric dentists that they actually waive the first visit fee, as it’s generally just a getting to know you session for parents and kids. At the time when we went, I asked about payment for future visits, and they said that they gave discounts for patients paying cash. I think it’s good to know how much treatments in your area might cost since before I had kids, I had no idea how much a dental cleaning for a kid would cost. Knowing the price helped us decide how to cover any treatments.” Rachel, mom to a 2-year-old and a 4-year-old
“We don’t have vision insurance for our daughter, and when she needed glasses, we ended up finding the least expensive option was at Costco. We’re adding her to a vision plan next year, but knowing that you can shop around and find affordable options made the experience much less stressful than it could have been.” Alex, dad to a 5-year-old
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Mary Beth Storjohann, CFP® and Founder of Workable Wealth, is an author, financial planner and accountability partner working to help clients in their 20s-40s across the country make smart, educated choices with their money. Her recent accolades include the “Top 40 Under 40” by Investment News, “10 young Advisors to Watch” by Financial Advisor Magazine, and “10 of the Best Personal Finance Experts on Twitter.” She frequently appears on NBC as a financial expert, and her expertise has been featured in The Wall Street Journal, CNBC, Forbes and more.
The opinions expressed in this article are the author’s own. Haven Life Insurance Agency offers this as educational information. Haven Life does not offer investment or tax advice and encourages you to seek advice from your own legal counsel or tax professional.