Define: "Plan Benefit Maximum"
This is the maximum amount that a health insurance plan will pay toward the cost of services incurred by an individual or family within a specified period of time, usually one calendar year.
The Pension Benefit Guaranty Corporation (PBGC) today announced that the maximum insurance benefit for participants in underfunded pension plans terminating in 2006 is $47,659 per year for those who retire at age 65. The amount is higher for those who retire later and lower for those who retire earlier or elect survivor benefits (see table below). If a pension plan terminates in 2006 but a participant does not begin collecting benefits until a future year, the 2006 maximum insurance limits still apply.
The maximum insurance benefit is set by law. Two additional legal limits on PBGC’s insurance coverage can also affect participants’ benefits. The first prohibits the PBGC from guaranteeing benefits that exceed the amount payable at the plan’s normal retirement age.
More Examples of Plan Benefit Maximum:
Back in 2005, an exciting new health benefit option under the Federal Employees Health Benefits Program (FEHBP) began. Made possible when President George W. Bush signed into law the Medicare Prescription Drug, Improvement and Modernization Act of 2003, High Deductible Health Plans (HDHP) with a Health Savings Account (HSA) allow you to set up a savings account in which you can accumulate additional money on a tax deductible basis to pay for current or future medical expenses. Both the Government (through a pass-through by way of your health plan) and you can contribute.
While HDHPs with HSAs may seem similar to health care flexible spending accounts (FSAs) and traditional insurance, because both enable you to pay for eligible medical expenses with tax-free dollars, the funds in an HSA can accumulate without limit year after year, while the funds in a FSA must be used every year or else they are forfeited.
HDHPs provide you comprehensive health benefits coverage for major medical costs in a tax-advantaged way plus they help you build savings, through your HSA, for future medical expenses. After you meet the plan's annual high deductible, your HDHP pays benefits like traditional health benefits plans.
HDHPs with HSAs give you greater control over how your health care dollars are spent-both out-of-pocket and funds from your HSA. As with most health benefit plans, HDHPs provide more cost-effective coverage when you use network providers.
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