Health Care 

Open Enrollment: Evaluating Your Health Care Coverage

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health insuranceRight now, thousands of employees are being offered the chance to switch up health care coverage offered by employers. Open enrollment is the time for you to look at your health plan options, and decide what you want to sign up for in the coming year.

Many people just keep everything the same (except health insurance premiums usually go up). However, before you just stick with the same old plan, stop and evaluate your current coverage. You might find yourself deciding to change things up a bit. Here are some things to consider as you evaluate your health care plan, and decide what to do next:

Do You Need That Coverage?

Go through your current plan. Do you have coverage you don’t need? I recently dropped a plan that included maternity coverage, since it’s not something I’m going to need. There might be other types of coverage that you don’t really need, but that you are paying for. You can speak with a representative to see if dropping some coverage will make a difference in your premium. If it will, and you don’t need the coverage, get rid of it and save some money.

Do You Have the Coverage You Need?

The flip side, of course, is making sure that you have all the coverage you need to effectively meet your needs. If you are concerned that you might need mental health services for yourself or a dependent, make sure your plan covers these services. Some people like to know that they have the option of seeking alternative and complementary therapies, in addition to “traditional” remedies, and seek plans that cover these treatments. Consider your needs, and make sure that your plan is covering them. If it isn’t, it might be time to choose a plan that does what you need it to. (But prepared to pay more if you are adding coverage.)

Flexible Spending Options

A flexible spending account is “use it or lose it.” This means that if you don’t use the money, you will lose it. Evaluate your needs, and evaluate whether or not you have been using the money in your account. There is a tax break that comes with your contributions, so you can consider that as well. Understand that new rules make it harder to get over the counter medications with your FSA (you need a prescription from your doctor), but it is still possible to use up your money, if you plan well. However, if you find yourself in a desperate attempt to use up your money at the end of each year, you might consider adjusting your contributions to the FSA to something lower. If, however, you keep using your money, consider changing your contributions so that more is set aside — as long as you haven’t reached your limit.

Consider a Health Savings Account

Another options is the Health Savings Account (HSA). If you are willing to increase your deductible, paying more out of pocket, you can reduce what you pay in premiums, and divert some of the savings to a HSA. The money rolls over year to year (so you don’t lose it), and there are tax advantages. However, if you have a chronic condition, or a family that makes heavy use of health care services, a HSA might not work best for you, since paying the deductible can get too expensive.

Now is a great time to review all your options, and do what you can to make sure that your health insurance is affordable, and covers your needs.

(Photo: a.drian)

{ 8 comments, please add your thoughts now! }

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8 Responses to “Open Enrollment: Evaluating Your Health Care Coverage”

  1. cubiclegeoff says:

    Of course this assumes you have options. I’m stuck with what I’m offered, with the exception of deciding what to put in my FSA.

  2. cubiclegeoff says:

    This assumes you have options. I’m stuck with whatever plan my company chooses, with the exception of deciding how much to put in my FSA.

  3. Arvin says:

    Dos anyone know in general the difference in benefits and coverage between a comparable PPO plan with a company (say, Blue Shield), and their HSA plan? I know the prescription drugs benefit is much worse (if any), but I’d want to know how they compare with, say, emergency room visits, specialist tests, and copays.

    I’m really intrigued by an HSA for the tax benefits, especially since I have a high deductible insurance plan now (that isn’t an HSA compatible plan), I’d want to be able to see if the tax benefit and lower premiums significantly outweigh the lower benefits.

    • Sadie says:

      Have no comparison between PPO plan with a company (say, Blue Shield), and their HSA plan, but I used HSA my final year of full-time employment. With few health expenses that year, the majority of HSA dollars were not used. End result is monies are still available for any future med needs. Ideally, the monies will be spent should Long Term Care needs occur & I do have a 30 day waiting period. Overall, I simply prefer to now pay out-of-pocket while I can because HSA monies are tax-free.

      NOTE: I did move account from a major NY bank because interest was earning only $.25/month (high administrative costs) to local credit union(HSA Savings Acct) and am now earning $4.25/month. Quite a difference even though total value is minimal.

  4. Mike says:

    Arvin, each state will be different when comparing the plans. In NJ, all of the plans cover the exact same things. Its just that on the HSA plans, you have to pay your deductible first and then you will pay copays. NJ is full of mandates though which is why there is little, if any difference on the actual services covered.

  5. cubiclegeoff says:

    This assumes that you have a choice with your health insurance. My company has one plan and that’s it. And it’s slightly cheaper (or has the potential to be a lot cheaper) than my wife’s plan (even though she’s a teacher). I just need to figure out waht to put in my FSA.

  6. Shirley says:

    As you look into different plans be sure to check any that are newly available for your county. Those seem to have a very low premium rate, probably to attract new customers. We are changing for 2012 to the tune of $275 savings each month and nearly identical coverage.

  7. cubiclegeoff says:

    I can’t choose really since my company only offers one plan. I only get to choose how much goes into my FSA.

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