"Plan participant" in the business world typically refers to employees who participate in various benefit plans offered by their employers. These could be for medical insurance, for a variety of savings plans like health savings or flexible spending accounts, or for things like savings matching programs or 401ks. Typically, the plan participant is the employee of the company, though this definition might extend to spouses or children who gain some form of coverage from a plan.
The reason this term may be valuable to know is due to the many definitions of what a person is entitled to when they join a plan. In particular, the use of “plan participant” in any documents produced by medical/dental/vision/life insurance alerts people to their rights through participation. It also can spell out what is and isn't included in coverage.
Additionally, there are sometimes differences between amount of insurance offered to a plan participant and to any dependents of that person. For instance, many companies that offer life insurance allow for a higher amount to employees than they allow for spousal coverage. Knowing what these differences are is useful in determining whether it is prudent to considering extra coverage from a private source. Occasionally, similar restrictions exist on health insurance, where only the plan participant receives full coverage and dependents receive less. The people considered full participants may not always be equal, or folks who are the designated owner of the plan might have to do things like sign for coverage for any dependents.
For dependents, and especially spouses, it’s very important to be able to identify the plan participant should something happen to him/her. Knowing things like a spouse’s social security number might be vital if anything occurs where access is needed, especially to any savings programs like 401ks. These savings programs almost always exclude the spouse if they’re offered by an employer, but there are times where circumstances might require access to what is jointly held money, such as when a spouse is gravely injured or deceased.
These distinctions about the person who is a plan participant may not apply so much when people join any form of health or savings plan privately. In such instances a couple might both join and both be designated participants. Sometimes various “plans,” whether obtained privately or through an employer, make no distinction, and any member of that plan is considered not only fully participating, but entitled to all benefits.
