Open enrollment season is upon us again. If they’re not already, chances are your employer will soon be bombarding you with literature about your insurance options for the upcoming year. The recent health care reform law has made this a bit easier by requiring employers to provide standardized summaries to compare plans, but still, sifting through all the pamphlets and reading material can be stressful and confusing.
So what do you really need to know? More importantly, what do you need to know to save money this open enrollment season?
1. Watch your TOTAL out-of-pocket costs – Most people opt for the most comprehensive plan offered, sure it costs $150 per paycheck, but there’s only a $20 co-pay for each doctors visit! This may be the right plan for you if you’re on a few prescriptions, or if you see your doctor more frequently than most. However, if you’re in relatively good health and don’t see your doctor more than for than an annual physical, a plan with a higher deductible and a lower per-paycheck cost may be better for you.
Plans are generally similar in what they cover after deductibles are met, even for emergencies. So think about how much health care you generally use through the year and you may find that the “Rolls Royce” plan is just unnecessary, even if an emergency should arise. Which leads us to…
2. Don’t be afraid of a High Deductible Health Plan (HDHP) – A high deductible health plan is a plan where the member (you) is responsible to fulfill a deductible before your insurance kicks in.
Think of it like car insurance – the higher the deductible, the less expensive the insurance. No big deal as long as you don’t get into an accident, right?
So what happens with a HDHP when you get into an “accident” and end up in the emergency room or have a stay in the hospital? That’s where it gets interesting…
HDHP’s must have either a HSA (Health Savings Account) or HRA (Health Reimbursement Account) associated with them. A HRA is funded by your employer for you to use on medical expenses, but anything you don’t use is returned to your employer at the end of the year. An HSA is funded with your own money (pre-tax!) for the same purpose, however any money you don’t use stays in your HSA. You own it, and you have it even if you lose your job or change jobs/insurance plans in the future.
Health savings accounts are what I like to call “triple tax-free”. Meaning your money is contributed pre-tax, grows tax-free inside the HSA, and is not taxed when spent (provided it is used on medical or dental expenses). The 2013 limits for contributing to an HSA are $3,250 for a single and $6,450 for a family (often times your employer will match your contributions just like a 401(k) too!).
3. Look for “perks” from your employer – Many employers offer wellness programs to their employees, designed to keep you healthy and cut healthcare costs. These can include things like gym memberships and programs designed to help you quit smoking.
My employer, along with many others ask employees to fill out a heath questionnaire before enrolling (done anonymously through a 3rd party). My employer gives $1000 credit on our benefits cost just for filling out a simple survey on our overall health and some lifestyle habits.
4. Network – The cost of your health care can change drastically depending on if your doctor is an “in-network” doctor for whatever provider you choose. This is usually very easy to check on a providers website, yet most people neglect to take this important step! Before you enroll be sure your doctor is considered “in-network” for your health plan or you could end up paying a lot more for the same care!
5. Read the fine print– Be sure to thoroughly compare the plans offered. Some plans may be more expensive simple because they offer services you may never use. I noticed in my health choices one plan was more expensive than another simply because it covered things like chiropractor visits. I’ve never been to the chiropractor in my life, and have no plans to start, so I’d essentially be paying for a service I’d never use had I chosen that plan.
The same scenario arose when I was looking over my dental plans. One plan cost $10 more per paycheck than an otherwise identical plan, simply because it covered Orthodontics at a higher rate than the other. My pearly whites are beautiful and straight, so I’ll take the $10 per paycheck thank you very much!
6. Be a woman! – Under the Affordable Care Act (Obamacare, if you please) women will now have access to completely free preventive services such as: an annual physical, gestational diabetes screening, HPV testing, HIV & other STD screening and counselling, contraception and related counselling, breast-feeding support & supplies and more. For the full breakdown and other info go here. But have no fear guys, we’re not left out. Annual physicals, prostate screenings, immunizations and more are provided to us for free under the ACA.
The most important thing, however, is to know your deadlines! Don’t get so busy at work that you forget to make enrollment choices at all. Your company will probably default you to the most bare bones plan they offer unless you are carrying coverage over from the prior year. Doing nothing could cost you hundreds of dollars in higher premiums, lower coverage and missed opportunities to review and optimize coverage for yourself in the coming year.
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