We’ve reached that important season where it’s time to select health benefits you and your family will take advantage of for the upcoming year! The holidays are approaching and there may be many plans ahead; however it’s important to review the options available before making a final decision. Take a step back and recollect on the previous years – were you able to reach your deductible? Did you allocate enough money for co-pays and prescriptions? Were there any unexpected hospital or doctor visits that left your finances in a less than desirable state? Whether you’re browsing through job-offered plans or marketplace offerings for entrepreneurs and business owners – the tips below can help you save time and money in the years ahead.
Evaluate Your Needs
Often times, we tend to make the same selections year-over-year without putting any additional thought into why we’re actually selecting that particular plan – leaving us ultimately unprepared for any new occurrences that can happen within the next year. Our creature of habit mindset can get in the way of us truly evaluating what we need. Take a look at it this way – would you want your employer to pay you the same salary every year without some sort of a routine review in place? This logic should be applied to the way we view our benefits. These are a few examples of questions we all should be able to confidently answer:
- Are there any prescriptions needed on a regular basis?
- Was the coverage from last year sufficient?
- Will there be any life events occurring such as a new baby, adoption or marriage?
- Are you aware of any health changes that can lead to an increased or decreased amount of doctor visits?
Review different types of health plans offered (PPOs, HDHPs and HMOs)
PPOs also known as Preferred Provider Organizations, create a network of medical providers for you to choose from. You do have the freedom to select an out-of-network provider but the out of pocket costs can be substantially higher. In the instance a specialty doctor is needed, you may not need a referral from your primary care physician. This plan is very common among many employers.
High Deductible Health Plans (HDHPs) use a Health Savings Account (HSA) or a Health Reimbursement Account (HRA) to save and spend for medical expenses. As the name suggests, the annual deductible is higher than other plans offered, however, once it is reached all other costs are 100% covered. Many people opt for this plan due to its lower cost but if it is difficult for you to reach the deductible, another plan may be in your best interest. Cost of the actual plan shouldn’t be the only thing considered. It’s also important to look at the coverage.
Health Maintenance Organizations (HMOs) plans could require you to choose a primary care physician but often have minimal co-payments and much lower out of pocket expenses. If you choose to see a doctor out-of-network, there’s a strong chance you will have to pay the full cost.
With all of these plans, it’s important to view the individual plan details for specific and detailed information. Take the time to compare each plan and determine what’s best for your needs.
Research Provider Networks
A lot of us have already identified doctors and facilities we love – without taking into consideration if they’re actually in-network with the healthcare plans we have chosen. In order to verify this information, contact your insurance provider or browse their website. There are many search functions available that will provide you with an accurate list of providers available for your choosing. If you want to do a quick cross-reference, you can also contact the doctor’s office directly. They should be able to confirm if your insurance will be accepted and provide a ballpark range out any out-of-pocket expenses.
Compare Pre-tax Healthcare Accounts (HSAs, HRAs and FSAs)
Health Savings Accounts allow tax-free payment for eligible medical expenses – including health, vision and dental. Many employers offer this in conjunction with a high deductible health plan. For 2020, the IRS announced the updated annual contribution limit amount as $3,550 for individuals and $7,100 for family coverage. Many employers make contributions to this account when completing health screenings or participating in employer-health initiatives.
Health Reimbursement Accounts (also phrased as Arrangements) are employer-funded plans that essentially reimburse employees for eligible medical expenses. This account is also offered with a high deductible plan but are sometimes offered to employees that have qualified individual health insurance premiums. Unlike the HSA account where it’s available to employees even after they switch companies, an HRA is forfeited and stays with the employer.
Commonly coined as the Flex Spending Account, this can be used to cover deductibles, copayments and other healthcare costs as instructed by the provider. Adopting the ‘use it or lose it’ mantra, most times you must use all of the funds in the given year or it will be lost. This type of account can also require you to submit receipts and any supporting documentation for permitted medical expenses.
Given all of the above information, it’s vital to be honest with yourself and your needs so you can maximize savings and limit overspending on medical costs. Create several options with best and worst-case scenarios to ultimately curate an optimal medical coverage plan for you. Be sure to do your due diligence and generate specific questions. Contact your insurance provider or your employers’ Human Resources department to bring clarity to what can be a very cloudy topic. Shopping for insurance on the Health Marketplace and need additional guidance? Navigate to their website where contact information is listed to get your questions answered. Last but certainly not least, please meet the deadline! All open enrollment periods are only open for a designated amount of time. Doing the research early will leave time to compare options and get any last-minute questions answered and leave you ample time for changes so there won’t be any pressure to blindly select a plan without taking the time to research.