What is Vision Insurance? A Complete Guide

If you’ve got health insurance and you’re looking to make a new addition, like vision, the first question you might ask yourself is: What is vision insurance? Of course, vision insurance covers the eyes, but what does that mean exactly?

What exactly does vision insurance cover? New glasses? Contacts? Medical procedures? If you’re on Medicare, get your insurance through your employer or pay for it yourself, you know that items like dental and vision often cost extra. How can you make sure you’re getting exactly what you need at the best price? Let’s start with what is meant by the term vision insurance.

What Is Vision Insurance?

If you need glasses, either for the first time or to replace your old ones, you might want to get some help paying for these expensive items with vision insurance. Nowadays, vision insurance is more than just eyeglasses.

Different plans offer varying coverage. Vision insurance covers:

• Eye exams
• Eyeglass frames
• Eyeglass lenses
• Contact lenses
• X-rays

The degree to which how much you pay and how much your provider pays depends upon your policy. While not all policies pay for more advanced procedures, like LASIK, they do often offer discounts. In these matters, it’s the insured who is responsible for paying for the procedure, less the discount.

Most vision insurance policies cover all the basics either by copay or through an annual allowance. While copays for eye exams and x-rays can often be free, most services fall under the guidelines of an annual allowance or a discount. Most vision plans offer services through in-network providers. Going out-of-network often means paying for procedures yourself.

Key Points 

Important Vision Insurance Terms to Know

When choosing the best vision insurance plan for you, it’s important to know the common nomenclature. What is a copay? What is an allowance? What does the term “plan” mean? Knowledge is king, and the more you know, the better a plan you’re going to get.

What is an allowance?

Most vision insurance plans with benefits have an annual allowance allotment. This amount is the maximum the insurance company will pay in 1 year for products and services. The amount of the allowance can be anywhere from $200 to $1,000, depending on your plan and the number of people covered. Allowances are also sometimes called eligible expenses or a negotiated rate.

When you exceed your annual allowance, you pay the difference. Your allowance gets reset annually and covers everything from eyeglass frames to lenses and contacts. Eye exams and x-rays are not typically counted as part of the allowance but are covered with a copay in most benefits packages.

What is a copay?

Like general health insurance coverage, vision insurance has copayments or copays. A copay is a fixed amount that you pay for services. In the case of vision insurance, a copay typically pays for routine eye exams. In some cases, it’s applied to x-rays and more serious eye exams as well. Copays can range anywhere from $10 to $25 to free. While some plans apply copays to frames and lenses, most limit copays to services rendered.

Copays are important. Without 1, a person might pay anywhere from $99 to $199 for an eye exam. If you have a copay and are on an HMO or POS plan, remember that the copay only applies to in-network services. If you choose to see a doctor out of network, you will be responsible for all costs yourself.

What is a materials copay?

While most vision insurance plans apply the copay to eye exams, a materials copay puts that same copay amount toward the entire purchase, lenses and frames included. In a regular copay, lenses and frames would fall under the annual allowance allotment. In a material copay, you’re covered for everything. This policy means if your copay is $0, your entire glasses are free.

For example, a visit for someone with a materials copay might look something like this:

• Comprehensive eye exam - $10 regular copay
• Pair of lenses + frames - $25 materials copay
• Contact lenses - $25 materials copay

Annual allotments still apply, meaning copays are applicable per year up to a maximum amount. The amount for copay depends upon your plan. In the case of a plan with a materials copay, the copay gets applied in lieu of an allowance.

What is a primary vision plan?

A primary vision plan provides low-cost, affordable vision care to its members. Just like general health insurance, a primary vision plan may consist of a primary care physician, in this case an optometrist or ophthalmologist.

Primary vision plans contain deductibles, which usually apply toward eye exams. Specific items like eyeglasses (frames and lenses) and contact lenses typically fall under the annual allowance allotment. Annual allowances can range anywhere from $200 to $1,000, depending on your plan, and usually cover 1 eye exam per year. Additional eye exams are extra, and payment is the responsibility of the policyholder.

While primary vision plans are often included in your general health insurance plan, you do not need a referral from your primary care physician to see an eye doctor if you stay in network. Referrals are typically required only when seeing specialists out of network.

What Does Vision Insurance Cover?

The typical vision insurance plan covers:

• Eye exams: Most policyholders get 1 eye exam per year. More than that would be at the expense of the insured. Eye exams are often performed with $0 copay, but typically never more than $10 or $15.
• Eyeglass frames: Frames are an included benefit and fall under the annual allowance allotment. Depending on your plan, you’ll receive anywhere from $1,000 to $1,200 annual allowance once per year.
• Eyeglass lenses: Lenses fall under the same category as frames. If you’re getting new glasses, you add together the cost of the glasses and lenses. The insured pays the difference if that total exceeds the annual allowance allotment.
• Contact lenses: Contacts are not always covered, but if they are it’s usually provided for under the annual allowance. Check your policy to see if you’re covered for contact lenses. Fittings for contact lenses are often offered at no additional charge.
• LASIK surgery: Most insurers will not pay for 100% of LASIK surgery. They will, however, sometimes pay for part of it or offer a discount. Typical discounts range in the $500 amount.

While most insurance will not pay for eyeglass enhancements, they do offer discounts. Such discounts often include:

• Anti-glare coating
• Stronger, thinner lenses made from polycarbonate
• Transition lenses (sunglasses)
• Progressive lenses (no-line bifocals)
• Scratch-resistance applications

A typical vision plan includes routine and diabetic eye exams with $0 copay and free glaucoma screenings. Standard vision policies pay for as much as $200 to $1,000 toward eyeglasses annually, including frames and lenses. The policyholder pays for all additional expenses.

What Doesn’t Vision Insurance Cover?

Items typically not covered in a vision plan include:

• Additional eye exams within the annual allotment
• Non-prescription glasses, like sunglasses
• Replacement eyeglasses
• Medical treatments
• Experimental procedures

Replacement of eyeglasses, while not covered under a vision insurance policy, can come with a warranty. Medical treatments fall under the jurisdiction of the insured’s general healthcare policy.

Types of Vision Insurance Plans

You can sign up for 2 basic types of vision insurance plans: a vision benefits package — much like a regular health insurance policy — and a vision discount plan. In both cases, benefits include the basics like eye exams, x-rays and eyeglasses.

As far as vision insurance plans go, just like with regular healthcare coverage, plan choices include:

• PPO
• HMO
• POS
• Indemnity plan
• The health marketplace under the Affordable Care Act (ACA)

PPO vision plan

A PPO is a maximum-benefits, managed healthcare vision plan. PPO plans allow policyholders to take advantage of benefits while not being limited by in-network-only providers. Members have the option of choosing or keeping their own doctor while still covered under their plan.

Just like with your regular healthcare plan PPO, a PPO vision plan allows you to see the doctor of your choice. PPO plans are for people who are more concerned with flexibility than cost and don’t mind paying the extra out-of-pocket expenses.

When going out of network, policyholders are responsible for paying the full cost of products and procedures up front. Policyholders then submit a claim to their insurance company for reimbursement. Using in-network providers, even with a PPO, still saves money.

What it covers: 

• Copays
• X-rays
• Eye exams
• Eyeglass frames
• Lenses

What it doesn’t cover (or only partially covers):

• Contacts
• LASIK surgery
• Experimental procedures

HMO vision plan

HMOs are easy-to-use and affordable healthcare plans that require you to use their list of providers if you want to take advantage of the benefits and cost savings. HMOs require primary care physicians and referrals for going out of network.

HMO vision insurance plans, just like regular HMO health insurance plans, require the policyholder to remain in network. As long as the policyholder remains in network, they typically enjoy $0 to low-cost copays and annual allowance allotments for both frames and lenses. 

The main difference between a vision PPO and an HMO is choice of doctor and cost. While less flexible with choice, an HMO is more affordable than a PPO. Surgery due to vision complications is not covered by vision insurance but instead through your regular healthcare insurance policy.

What it covers (or only partially covers): 

• Copays
• X-rays
• Eye Exams
• Eyeglass frames
• Lenses

What it doesn’t cover:

• Non-prescription eyeglasses
• Replacement glasses
• Medical treatments

POS vision plan

A POS vision plan is a hybrid of a PPO and an HMO. While using the savings of an in-network HMO, it also allows policyholders to go out of network for specialty care. Be aware that going outside of the network can mean incurring higher costs.

If you’re looking to save money, then a POS plan could be for you. POS plans offer lower costs than both PPOs and HMOs. So what’s the catch? The choice of providers is more limited. While limiting the number of providers, however, POS insurance does allow policyholders to go out of network, which HMOs do not. A POS can at times be confusing.

POS plans represent only a small fraction of all policies. The majority are usually either PPO or HMO. While saving money while using in-network providers, POS plans work like a PPO as well. With a POS, when using out-of-network providers, it’s up to the policyholder for filing all the necessary paperwork for reimbursement.

What it covers (or only partially covers): 

• Copays
• X-rays
• Eye exams
• Eyeglass frames
• Lenses

What it doesn’t cover:

• Experimental procedures
• Contacts
• LASIK surgery

Indemnity insurance vision plans

Also known as a fee-for-service plan, an indemnity insurance vision plan allows greater flexibility and the ability to see any doctor you want. While the insurance company agrees to pay a portion of your costs, that percentage is typically lower than with other plans. Referrals aren’t required. An indemnity plan gives you complete freedom to see any provider you choose.

Much like a PPO, an indemnity plan requires that you pay all the up-front costs. You are then responsible for filling out all the paperwork, gathering the receipts and turning them into the insurance company for reimbursement. While you may choose a primary care physician, it is not required. The insurance company pays a set percentage of your costs after meeting your deductible.

Indemnity plans allow you to direct your care exactly as you want it. You can see any doctor you like. There are no limitations. The catch is that an indemnity plan is more expensive than a standard PPO or HMO. Because it is a fee-for-service plan, you pay as you go.

What it covers: 

• Copays
• X-rays
• Eye exams
• Eyeglass frames
• Lenses

What it doesn’t cover:

• Non-prescription eyeglasses
• Surgery
• Medical treatments

Marketplace (ACA) plans

For those people who have vision insurance through the health marketplace, the ACA requires vision insurance for kids. Pediatric vision care is an essential benefit under the ACA. Children under the age of 19 qualify for vision coverage. What this means is that children have coverage for:

• Eye exams
• Vision screening
• Eyeglasses

In fact, because vision screening falls under the category of preventative care, it’s free for kids. Be aware, however, that vision screening is not the same as an eye exam. A vision screening can be performed by your primary care physician and does not require an optometrist or ophthalmologist. Vision screens are not used to make diagnosis, only to determine whether an actual eye exam is the next step.

Vision plans under the ACA are subject to the same terms as other plans. They have copays, deductibles and coinsurance. Annual allowances still apply. Some carriers offer free eye exams for kids.

For adults, vision care is not mandatory under the ACA. You can add it to your existing coverage, or you can purchase it separately as a stand-alone plan. Stand-alone plans are typically not offered through the exchange, so you can’t use your premium subsidy toward the cost.

Is Vision Insurance Worth It?

Vision insurance, along with dental and hearing, is typically included in most Medicare Advantage, PPO and HMO plans. So is vision insurance worth it? In these cases, removing it from your policy wouldn’t save you any money, so you might as well keep it.

When Is Vision Insurance Not Worth It?

If you don’t foresee using it much, then it doesn’t make much sense to pay premiums. A typical vision insurance plan can cost as little as $5 per month and as much as $35. If your annual benefit allowance is only $200, then paying $35 a month in premiums doesn’t make much financial sense. 

If you anticipate steep vision expenses in the future, then a vision plan can pay off for you. If you get a plan that pays a percentage of your costs, like a POS or an indemnity plan, then you may come out ahead in the long run. Plans that pay a percentage of your costs or offer discounts really can save you money, if you make ample use of them.

Try Warby Parker

Warby Parker is a unique online eyeglasses and sunglasses one-stop-shop. While this is not an insurance provider, the platform makes it easy and affordable for consumers to purchase prescription glasses that are also stylish and durable.

When you use Warby Parker, you can have several pairs sent to your home for at-home try-on. Don’t want to wait for the glasses to arrive, you can use the virtual try-on feature to see what they would look like on your phone. You keep the frames you want and send back the rest. You can enter your prescription information on the website, and Warby Parker processes your order, sends you your new glasses, and provides a hard-shelled case along with a cleaning wipe.

Warby Parker is also a great place to go if you need to replace your glasses and you want to spend as little money as possible.

Contact lenses are also available for affordable prices, and you can order any time from the mobile app. Additionally, Warby Parker does maintain a few retail stores that allow you to visit in person, work with the retail staff, and get your glasses the old-fashioned way.

Comparing Vision Plans

Comparing vision insurance plans is much the same as comparing regular health plans. Comparative quote websites are a great place to start, or you can just follow the chart below.

Average Monthly Cost of Vision Insurance

The cost for vision insurance ranges anywhere from $5 to $35 per month. You can get a private, stand-alone plan, or it can be part of your already existing health insurance coverage. Most insurance plans, including HMOs and Medicare Advantage plans, already come with vision, hearing and dental included. There is no extra cost to you.

If you have a plan provided by your employer, just like with regular health insurance, you can upgrade your services or add family members to your policy. Upgrades and additions to existing policies are typically not expensive as you are paying the monthly premiums already.

If you want to pay less at the time of your visit, you can up the amount of your premiums. Or if you prefer to pay more at the time of service, you can pay lower premiums, Higher deductibles usually mean lower premiums and vice versa. Make sure and find a plan that fits your budget and needs.

Where to Buy Vision Insurance

Buying vision insurance is much like buying regular health insurance. Shop around. Ask family and friends. Use Benzinga’s quote comparison site or sites of other providers.

Protect Your Eyesight with the Right Vision Coverage

When it comes to insurance and protecting your health, vision insurance is just as important as anything else. Knowledge is king. Benzinga provides the knowledge you need to find the best vision insurance coverage for you. 

What is vision insurance? In short, it’s finding just the right coverage to fit both your financial and health needs. For more vision resources, come check out these other great articles from Benzinga.

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