Giving Your Health Benefits a Checkup
RELATED CONTENT
- U.S. Census Bureau, Health Insurance Data:
- U.S. Census Bureau, Health Insurance Data
- Harvard School of Public Health:
- Harvard School of Public Health
- U.S. Department of Labor, Health Plans & Benefits:
- U.S. Department of Labor, Health Plans & Benefits
- MedlinePlus, Health Insurance:
- MedlinePlus, Health Insurance
A national survey found that the majority of women (59 percent) spend less than two hours learning about their health insurance options.
As a consumer, you make more and more informed decisions on planning for the future. Similar to the way in which you make purchasing decisions — looking at all options and evaluating your preference — Americans are now empowered to take a more active role in managing their health and financial benefits.
To make the most of your benefit choices and options, you need the right tools, information and support to make well-informed decisions.
Remember these fast facts to make sure your health and financial benefits are in order:
Review the Open Enrollment Packet: Typically from October to December, employees are given the opportunity to look over changes that the employer has made to the benefits package. This time also offers a chance for you to assess your latest benefits needs. If you're getting married or starting a family, those needs may be different from the same time last year. Making the most of the benefits your employer offers can be the equivalent of getting a raise that increases your salary by thousands of dollars.
Consider Flexible Spending Accounts: Flexible Spending Accounts (FSAs) allow employees to use pre-tax dollars to pay for qualifying health care costs. Costs might include paying deductibles and co-pays, but might also cover expenses like dental costs, daycare, prescription drugs, alternative therapy (such as massage) and, now, even some over-the-counter medicines.
Check In On Your 401(k): In most circumstances, you won't have to wait for Open Enrollment to make adjustments to your 401(k) plan. However, Open Enrollment season is a great time for an annual review of your 401(k) plan along with your assessment of your other employee benefits — it's a good time for that annual checkup.
To make educated decisions on your health benefits and to know how those decisions may affect your overall financial plan, it is important to understand the latest industry trends.
Some helpful hints:
Health Savings Accounts (HSAs): Health Savings Accounts are a significant new option of consumer-directed plans that provide consumers with a high-deductible health plan with another opportunity to better plan for and fund their current and retiree health care expenses. HSAs offer a number of advantages to consumers — they are a tax-advantaged account where earnings grow tax-free and distributions for qualified medical expenses are tax-free. The employer, the individual or both can contribute to HSA funds. In addition, HSA funds can be carried over from year to year, are transferable from job to job, can be used into retirement and must be used with a high-deductible health plan. Check out Aetna's HSA calculator to find out more about the savings opportunities and tax advantages an HSA could provide for you.
Health Reimbursement Arrangements (HRAs): Health Reimbursement Arrangements, or employer-funded health benefits accounts, offer another option for consumers who are interested in having the flexibility of choosing how to manage their health care dollars. Benefits of these plans include reimbursements that are not taxable income, the ability to roll over unused dollars and the ability to save money for future health care needs, including retirement expenses.
Flexible Spending Accounts (FSAs): Flexible Spending Accounts, normally offered by employers, are another tool for consumers to use in their health care planning. By contributing to an FSA, consumers are exempt from paying taxes on contributions, thus reducing taxable income, while at the same time paying for medical expenses they expect to encounter during the year. Unlike HSAs or HRAs, FSAs are not transferable from job to job and they are subject to a "use it or lose it" provision, meaning that the funds must be used in the year they are accrued.
