Savvy Consumer: Open enrollment for health benefits

Great article by TERESA McUSIC

Open-enrollment season for healthcare benefits is coming soon, and this year may be the time you want to actually look at the choices.

With the proper strategies, you could save some real money.

“Little changes can add up to a significant amount,” said Tracey Baker, a certified financial planner and co-author of Navigating Your Health Benefits for Dummies. “It’s become an important part of overall financial planning.”

Overall, premiums on employer-sponsored health insurance rose 5 percent this year to $12,680 annually for family coverage, according to a report by the Kaiser Family Foundation. Employees are paying $3,354 out of their paychecks on average to cover their share of the cost.

To lower costs, many employers are now shifting to high-deductible plans. Eighteen percent of all workers now face deductibles of at least $1,000, according to the report. For those who work for small businesses, 1 in 3 workers now have the high-deductible plans.

“With rising deductibles, more and more people face a substantial amount out of pocket for their healthcare before their insurance fully kicks in,” Kaiser President and Chief Executive Drew Altman said in a statement. “Health insurance is steadily becoming less comprehensive, and it’s no wonder that in today’s tough economic climate many families count healthcare costs as one of their top pocketbook issues.”

If you have a choice, Baker says the high-deductible plans are best financially for those who are younger and healthier. Employees who use up their deductible every year or have a chronic condition do not fare as well financially under the plans, even with the tax advantage, she said.

If you choose the high-deductible plan, or are stuck with one, be sure to open a health savings account and put in your deductible amount to cover your out-of-pocket costs. You can then deduct that amount from your federal income tax. The amount in the HSA continues to roll over year after year, so you never lose it.
For more information or a list of where to open an account, go to
www.hsainsider.com.

Make sure your high-deductible plan option includes 100 percent coverage after your deductible is met. An 80/20 plan, where you pay 20 percent out of pocket, could put you into considerable financial risk if someone in your family has a large hospital bill next year.

Here are 10 more ways to save on your healthcare costs this year from Baker and other sources:

1. Open a flexible spending account
A study of Texas companies by Mercer Health and Benefits released last year found that 85 percent of all employers with more than 500 employees surveyed offered flexible spending accounts for healthcare, but that just 18 percent of employees participated. Small businesses offer them less frequently, but when they do, more employees there use them, Mercer found.

Although the plans still have a “use it or lose it” option, the IRS has extended the time you can use your FSA to March 15 of the following year. Make sure your employer has adapted to that change before you calculate what to put into an FSA, however, as not all have. The IRS has also expanded the uses for the accounts, so now myriad over-the-counter drugs and other services can be purchased with FSA dollars.

2. Move spouse to their company plan
According to Kaiser, 20 percent of employers now cover all of the healthcare costs of their employees, while just 7 percent cover all of the costs of employees and their families. If your spouse’s employer offers coverage, it may be worth it to shift him or her to that company plan, even if it means working with two different insurers in your household. Compare plans for the children, too: Private plans for minors may be cheaper than your company’s plan.

3. Use healthcare cost estimators
Most companies offer healthcare cost estimators that allow you to comparison-shop for insurance by evaluating two or more healthcare plans at a time, comparing monthly premiums, co-payments, deductibles and co-insurance payments. But just 9 percent of employees used those tools last year, according to research by Hewitt Associates. Make this the year you compare plans.

4. Look for health and wellness program discounts
Sixty-three percent of employers now provide incentives, usually as credits or lower deductibles, if you or your family participate in health and wellness programs such as smoking cessation, weight management or physical fitness, Hewitt said. Some insurance plans will also offer part or full payments for annual physicals and preventive screenings.


5. Fill out your HRQ
One in four large employers now ask employees to fill out a health-risk questionnaire before choosing their benefits, according to Hewitt. This can be a good tool for decision-making. Many companies even pay their employees to fill it out.

6. Use mail-order pharmacy
Most insurers now offer mail-order options for prescription drugs. Once the paperwork is done, regularly needed prescriptions come to your home automatically. The cost savings is substantial, Baker said. On average, you can get three months’ worth of a drug for the cost of two months. But only 19 percent of those surveyed get their drugs by mail order, she said.

7. Go generic
More than half of prescription drugs sold today are generic, and many brand-name drugs are reaching the end of their protected cycle and generic alternatives are coming on the market. Check with your doctor to see whether you can switch. The savings is significant, Baker said: the average brand-name prescription drug costs about $85 more than the average generic.

8. Ask about online doctor visits
Some insurers are now offering coverage for online consultations for routine health needs. See whether your doctor and insurer are doing this. It can save on the visit, as well as on gas and time from work. Insurers are also starting to offer personal health records online that help you track spending, discuss preventive care and allow you to coordinate with your doctor’s office.

9. Consider a higher co-payment
Some insurance plans offer a higher co-pay option for lower monthly premiums. See whether your plan does, and do the math to see whether this savings would be worthwhile.

10. Stay in network
Increasingly, hospitals and the services they provide are rotating through insurance companies, so be sure to check regularly with every health provider before you use their services to make sure they take your insurance. In addition, just because a service such as a lab or a doctor works inside a hospital or clinic does not mean that it also takes your insurance. Don’t get stuck with an out-of-network bill. Check everyone first to see whether they are on your plan.

Need more information? Get a free copy of Navigating Your Health Benefits for Dummies at http://www.planforyourhealth.com/, a public- education Web site sponsored by the Financial Planning Association and Aetna.

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