Choosing Health Benefits
Remember, health benefits can greatly impact your overall financial health. Choosing health benefits can be a complex process, but planning well can make a big difference. And in most cases your decisions last for a full year, so making well-informed selections is important. Plan for Your Health's Navigating Your Health Benefits helps you make the most of your health benefits at key decision-making points.
OPEN ENROLLMENT
It's that time
Open Enrollment is the time, typically from October to December, when
millions of Americans have the opportunity to reevaluate their benefits
and make changes for the following year. The challenge is spending the
time reviewing and understanding the materials provided. The glossary on
PlanforYourHealth.com or your benefits administrator at work will help
you make sense of terms and information with which you may not be
familiar. And here are some important things to consider when
re-evaluating your health benefits:
- Cost of premiums and co-payments
- Coverage information including in-network doctors
- Current plan options; these may change from year to year
- Choices such as Health Savings Accounts (HSA), Health Reimbursement Arrangements, Flexible Spending Accounts (FSA), long-term care and life insurance
Questions to ask
Here are some questions you should ask yourself when choosing a health insurance plan:
What will this plan cost?
- What is the monthly premium?
- What are my co-pays or deductibles with this plan?
- After I've met my deductible, what percentage of my medical expenses is reimbursed?
- What is my maximum out-of-pocket cost?
- How much less am I reimbursed if I use doctors outside the health benefit provider's network?
Does the plan cover the services that are important to me?
- Are the doctors, hospitals, laboratories and other health care providers that I use in the health benefit provider's network?
- Am I allowed to see a doctor outside the network? If so, what is the reimbursement difference?
- How easily can I change my primary care physician?
- Do I need to get a referral in order to see a specialist?
- What are the procedures for getting care and being reimbursed in an emergency situation, both at home or out of town?
- Does the plan pay for preventive health care such as diet and exercise advice, immunizations and health screenings?
- If I have a preexisting medical condition, will the plan cover it?
- If I have a chronic condition such as asthma, cancer, or diabetes, what special services or programs are offered to me?
- Are the prescription medicines that I use covered by the plan?
- Does the plan reimburse alternative medical therapies such as acupuncture or chiropractic treatment?
- Does the plan cover the costs of delivering a baby?
- What additional programs and services does the carrier offer? (i.e., wellness programs, weight management programs, disease management)
Eligibility
If you're new to a plan, make sure to confirm when you will be eligible for benefits, and when your coverage will begin.
MAJOR LIFE EVENTS
Switching jobs?
Just as you would at any new job, evaluate your health benefits plan by considering cost (premiums, co-payments, deductibles and co-insurance), coverage (in-network doctors, prescriptions, vision/eye care) and the availability of options such as Health Savings Accounts (HSA), Health Reimbursement Arrangements, Flexible Spending Accounts (FSA), long-term care and life insurance. Some additional elements to keep in mind:
- You keep your HSA - a tax-advantaged savings account that you can use to help pay for qualified health expenses - when switching jobs or health plans. Be sure to keep the account alive and continue deducting medical expenses, or save the money for future health care spending.
- Going without health insurance, even for a short time, puts you or your family at serious financial risk. So if you're between jobs, visit the U.S. Department of Labor's website for information on temporary coverage.
Getting married?
Once the honeymoon is over, it is time to get down to business and learn how to make your benefits work for both of you. More than likely, you both have benefits and need to compare the two plans. When deciding if you want to stay on your own plan or join your spouse's or your partner's, you need to decide what is most important to you:
- How comprehensive do you want your health insurance coverage to be? Are additional services provided such as coverage for dental, vision care or prescription drugs?
- Would you like to be able to choose a specific doctor or hospital? What doctors and hospitals are covered under each plan?
- Is it important to visit health care facilities that are close to your job or home?
- How much are you willing to spend on premiums and deductibles? Are there co-payments or co-insurance for routine and emergency care?
Having a baby?
One of the best ways new parents can protect their financial future is
to plan for their family's health. Having a baby - even if it is your
second or third child - is the perfect time to take a fresh look at your
health benefits and overall budget.
- Do I need to make any changes to my health benefits? Yes, you will need to declare your child as a dependent on the policy. Check with your health plan provider to find out when you should enroll your child in the plan.
- What kinds of costs do I need to plan for? You'll need to plan for visits to your physician and the associated co-payments or co-insurance. You should also consider the cost of delivery, which will vary depending on the delivery method and the hospital or birthing center. Take into account the experts you may want to consult, such as a doula, midwife or lactation consultant. To get an estimate of the total cost, check out the Baby Expense Calculator on PlanforYourHealth.com.
- Check if experts' services are covered by your health plan, and if they have a list of preferred providers with discounted rates.
On your own - how to buy your own benefits
The circumstances of your life can determine the type of health coverage
you need. Visit PlanforYourHealth.com to identify a life event that may
fit your situation and learn more about benefits needs. Then go to
www.eHealthInsurance.com
to get a quote for an individual insurance plan.
You can't plan for illness or accidents, but the unexpected does happen. That's why going without health insurance, even for a short time, puts you or your family at serious financial risk. So if you're between jobs, or between insurance plans, visit the U.S. Department of Labor's website for information on temporary coverage.
Professional and alumni associations, such as local Chambers of
Commerce, may also offer health plans.
If you don't have health insurance, contact your state's Department of
Health and Human Services to find out of you qualify for low-income
health coverage.
Self-employed or small biz
Small businesses can get group health plan information by visiting www.eHealthInsurance.com.
Professional and alumni associations, such as local Chambers of
Commerce, may also offer group health plans.
PLAN COMPARISON
Review premiums, co-pays, co-insurance, etc.
Does your plan fit your medical and financial needs? Managing out-of-pocket medical costs will help you control your overall finances. Some options to consider:
- Premiums for high-deductible health plans are often lower than for other health plans. Keep in mind, though, that you'll have to pay for your health care out of pocket until you meet your deductible and coinsurance kicks in.
- If your benefits plan has high out-of-pocket costs, you might consider participating in a Flexible Spending Account or Health Savings Account, if one is available to you.
- Co-payment and co-insurance amounts (generally specified dollars or percentages) are out-of-pocket costs for doctor's visits and medical care that you will be required to contribute. Fees are applied after you have met any applicable plan deductible. Co-payments may vary by type of service. Review your plan documents for fee estimates.
- Use the Health Expense Calculator on PlanforYourHealth.com to estimate annual health care costs.
Choosing the right plan
Does your plan fit your medical and financial needs? Ask yourself:
- Can I see a specialist without a referral? Some plans require that you choose a primary care physician (PCP) to coordinate all your care, meaning that you will need a referral from your PCP before visiting a specialist.
- Will I be limited by the plan's list of preferred or in-network doctors? Remember, seeking care out-of-network can increase your out-of-pocket costs.
- What's the total cost of the plan including premiums, co-pays or co-insurance and deductibles?
Don't underestimate the benefit of wellness
One of the primary functions of your health benefits plan is to keep you healthy. In fact, many plans offer extra incentives to do just that. Check to see if your plan will offer:
- Coverage for annual check-ups, well-woman and well-child visits
- Coverage or discounts for exercise programs, smoking-cessation clinics, flu shots and mental health services
MAKING YOUR CHOICE
Choosing a plan
Does the plan you're choosing fit your personal medical needs, such as chronic disease management, maternity care, physical therapy, vision, dental care and alternative health care?
- If you have a chronic disease make sure your plan offers disease management programs.
- Some plans offer discounts on products and services such as dental and vision care, acupuncture, health club memberships and nutritional supplements.
FSAs, HSAs - are they right for me?
Health funds (Flexible Spending Accounts, Health Savings Accounts, Health Reimbursement Arrangements) are tax-advantaged accounts that can be used to pay for covered medical expenses and out-of-pocket costs.
To be eligible for an HSA, you must be covered by a high-deductible health plan and not be eligible for coverage under any other health plan. Contributions to the HSA can be made by the employer, the employee or both. Contributions are tax deductible and earn interest tax free. The accounts are portable, meaning you can take them with you when you leave your job, and balances accumulate from year to year. HSA funds can be used to pay for qualified medical expenses or withdrawn in cash, although cash withdrawals become taxable and may be subject to an additional withdrawal penalty.
Contributions to an FSA are typically made by the employee, and are free of federal, Social Security and most state taxes. Funds must be used in the year they are accrued; unused funds go back to your employer. Funds are not portable and do not accrue interest.
A Health Reimbursement Arrangement (HRA) is an employer-paid benefit account offered to employees or retirees. HRA funds pay for deductible and co-insurance amounts, and unused funds in an HRA may be carried over from year to year.
Uninsured options
You can't plan for illness or accidents, but the unexpected does happen. That's why going without health insurance, even for a short time, puts you or your family at serious financial risk. So if you're between jobs, or between insurance plans, visit the U.S. Department of Labor's website for information on temporary coverage.