What Is Vision Insurance?

By Madeleine Vessel

Potentially high costs of regular eye examinations and prescription eyewear can be of real concern, especially for large families. You might be able to defray at least some of these costs by looking into acquiring vision insurance for yourself or better understanding the plan your company already provides.

First, you must understand that vision insurance only supplements regular health insurance. Regular health insurance plans protect you against financial losses due to unexpected eye injury or disease. Vision insurance, on the other hand, is a wellness benefit designed to provide routine, preventive eye care such as eye exams, eyewear, and other services at a reduced cost.

Where Can I Get Vision Insurance?

Group vision insurance can be obtained through your company, association, school district, etc., or through a government program such as Medicare or Medicaid. [Read more about Medicare and Medicaid vision benefits.]

Also, as an individual, you might consider the option of purchasing your own vision benefit plan.

Vision insurance is often a value-added benefit linked to indemnity health insurance, health maintenance organizations (HMOs), and preferred provider organizations (PPOs) that have contracted with managed vision care networks to provide eye care services.

Indemnity health insurance is traditional insurance, which allows policyholders to access medical providers of their choice. An HMO is a group of healthcare providers — doctors, laboratories, hospitals and the like — employed to give health care to health plan members at discounted rates. Usually, health plan members are required to access health care only from HMO providers.

A PPO is a network of healthcare providers organized to provide healthcare services to health plan members at a fixed rate well below retail prices. Plan members may opt to access out-of-network providers, but usually at a greater cost.

[Read more details about vision insurance providers.]

When you buy vision insurance, you receive the following benefits:

• Access to a network of providers, including optometrists and ophthalmologists, eyewear stores, optical laboratories, and LASIK/PRK surgeons
• Access to routine, preventive eye care services at reduced rates

What Kinds of Vision Insurance Plans Are Available?

Vision insurance typically comes in the form of either a vision benefits package or a discount vision plan. Typically, a vision benefits package provides enrollees eye care services in exchange for an annual premium or membership fee, a yearly deductible (a dollar amount) for each enrolled member, and a co-pay (a smaller dollar amount) each time a member accesses a service.

A discount vision plan provides eye care at fixed discounted rates after an annual premium or membership fee and a deductible are paid.

[Read more about understanding provider networks and types of vision plans]

Both kinds of vision insurance can be custom-designed to meet the different requirements of a wide range of customers, including school districts, unions, and big and small companies.

Vision insurance generally covers the following basic services:

• Annual eye examinations, including dilation
• Eyeglass frames
• Eyeglass lenses
• Contact lenses
• LASIK and PRK vision correction at discounted rates

Generally, services acquired from network providers are cheaper than services from out-of-network providers.

Also, remember that reputable managed vision insurance companies should have a quality assurance mechanism.

What Does Vision Insurance Cost?

Vision insurance costs vary, depending upon how the program is designed. With a vision benefits package, you can expect to pay:

• A monthly premium or membership fee ranging from $0 to $12
• A deductible of $0 to $35. A deductible is an amount that must be paid by a vision plan member before the vision plan begins to pay its share. The larger the deductible, the smaller the premium or membership fee.
• A co-pay of $10 to $15 for each network service
• Expenses for out-of-network services that go above and beyond plan allowances

With a vision discount plan, you can expect to pay:

• A monthly premium or membership fee ranging from $0 to $12
• A deductible of $0 to $35
• A fixed discount price for each service you receive from a network provider, or...
• Expenses for out-of-network services above and beyond plan allowances

Typically, you pay for group vision insurance through payroll deductions or flexible spending accounts (FSAs). An FSA, sometimes called a cafeteria plan, allows an employee to use pre-tax dollars to purchase selected health benefits such as vision insurance. You save money because you receive the full benefit of income that has been set aside for health costs, making it not subject to or reduced by taxation.

If, however, you have purchased an individual vision insurance plan, you can expect to be billed monthly or annually.

After researching vision benefits, you should be better able to use your existing plan if one is provided. If vision benefits aren't currently available at your work place, you might be interested in discussing possible advantages of this option with an employer.

[Read more about defined contribution plans, how to use your vision insurance benefits, and how to shop for a vision benefits plan.]

[Page updated August 2007]