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Open Enrollment: Evaluating Your Health Care Coverage

Right 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 [3] 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 [4] 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 [5] (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 [6])