What are annual limits?
Annual limits define the maximum amount an employee can claim for medical services in a policy year. Unlike traditional insurance premiums, Soda uses limits to control costs while giving employees flexibility.
Key concept:
- You set the limit (e.g., $500, $1,000, $2,000)
- Employee can use up to that amount
- You only pay for actual usage
- Limit resets at policy renewal
For each plan in Soda, you can set up a different annual limit (e.g. limit A for one team, and limit B for another. You can easily create plans for different employee groups.
How limits work
Individual limits:
Each employee has their own annual limit. If Employee A uses $300 and Employee B uses $700, you pay $1,000 total, not $2,000.
Per-employee basis:
- Limit applies per person, not per company
- Unused limits don't transfer between employees
- Limits reset annually on policy anniversary date
Example:
- Company sets $1,000 limit per employee
- 10 employees = 10 × $1,000 potential = $10,000 total potential
- Actual usage: $3,500 across all employees
- You pay: $3,500 (not $10,000)
Shared vs. separate limits
Option 1: Shared limit (simplest)
- One limit covers all services
- Employee can use across GP, dental, specialist, etc.
- Example: $1,000 = use for any combination of services
Option 2: Separate limits (more control)
- Different limits for different service categories
- More granular cost control
- Example: GP+Dental+TCM = $550, Specialist+Physio = $500
Which should you choose?
Shared limit if:
- You want simplicity
- Employees have varied needs
- You trust employees to use responsibly
Separate limits if:
- You want to control specific service spending
- You know employees tend to overuse certain services
- You want more detailed cost tracking
Per-visit limits
What are per-visit limits?
- Maximum amount covered per single visit
- Protects against high-cost single visits
- Employee pays excess if visit exceeds limit
Example:
- Annual limit: $1,000
- Per-visit limit: $50
- Employee visits specialist: $150 bill
- Company pays: $50
- Employee pays: $100
- Remaining annual limit: $950
When to use per-visit limits:
- Want to control single-visit costs
- Concerned about expensive specialist visits
- Want employees to share cost responsibility
Co-payment options
What is co-payment?
- Employee pays fixed amount per visit
- Company pays remainder
- Example: $5 co-pay per GP visit
Benefits:
- Reduces unnecessary visits
- Teaches cost awareness
- Lowers company costs
Example:
- GP visit: $50
- Co-payment: $5
- Employee pays: $5
- Company pays: $45
What happens when limit is reached?
After limit reached:
- Employee can still visit clinics
- Employee pays out-of-pocket
- Platform fees continue
- Limit resets at renewal
Common question: "Can we increase limits mid-year?"
- Generally no, limits are set for policy year
- Can create new plan with higher limits
- Can move employees to new plan
- Prorated limits for new employees
Choosing the right limit
Factors to consider:
1. Current benefits:
- What do you currently offer?
- Match or exceed current coverage
- Consider employee expectations
2. Budget:
- How much can you afford?
- Remember: pay-per-use means you only pay actual usage
- Average utilization: 30-60% of limit
3. Company size:
- Larger companies: Higher limits for competitive benefits
- Smaller companies: Lower limits to manage costs
4. Industry standards:
- Research competitor benefits
- Match market expectations
- Consider recruitment needs
Calculation help:
- Average GP visit: $50
- Average dental visit: $100
- Average specialist: $150-300
- Typical year: 2-3 GP visits, 1-2 dental, 0-1 specialist
- Estimated annual need: $500-1,000 per employee
Prorated limits for new employees
How it works:
- Employee joins mid-year
- Limit prorated based on remaining months
- Example: $1,000 limit, 6 months remaining = $500 limit
Formula:
- (Annual limit ÷ 12) × Remaining months
- Example: ($1,000 ÷ 12) × 6 = $500
Automatic calculation:
- System automatically calculates prorated limits
- No manual calculation needed
- Shown in HR dashboard