Open enrollment season is fast approaching, and that means that it is time for you to start thinking about your options. Because we are talking about health care, you are likely to see an increase in premiums for your health plan. Additionally, you are likely to see increases for co-pays and also for what you pay for name brand drugs. These likely changes to your health plan make it imperative that you carefully consider your health plan options before signing up for the same old plan again this year. You might even consider comparing individual and group health plans to see if you can find a better option for your needs.
Read About Your Options
The first step in getting the most bang for your health care dollar is educating yourself about the options. Allow yourself plenty of time to read plan materials provided by your employer so that you understand your options. Compare coverage and costs, and evaluate your own needs.
One of the best things you can do is look at what your family needs in terms of health care, and choose a plan that best fits that. As time progresses, changes in your family situation may mean changes to your coverage. New rules that allow adult children on your insurance may affect your needs, as can a new baby in the family. Another good idea is to consider the coverage you are receiving. A woman who has had a hysterectomy no longer needs maternity coverage.
It is also a good idea to understand your Flexible Savings Account. Many employers are moving more toward helping you with a FSA, since it costs them less. Find out the rules associated with the FSA, and when you have to use the money in your account before you lose it. It is vital that you understand your FSA options in order to avoid costly misunderstandings.
Consider a High Deductible Plan
More employers are offering high deductible plans that can work in tandem with Health Savings Accounts. Even though you have to pay more out of pocket for care, the premiums are much lower. For those in reasonably good health, a high deductible plan can save money in the long run, even though you are paying more out of pocket.
Plus, if you put the difference between your old premium and your new, lower premium in a Health Savings Account, that money can work for you. Contributions are tax deductible, and the money grows tax-free, as long as you use it for approved health costs. So you can make your co-pays and meet your deductible with help from your HSA.
If you reach retirement with money in your HSA, and if you decide you don’t need it all for health costs, you can treat it like a regular IRA. All the same rules apply, so you will have to pay taxes on your non-health withdrawals, but the fact remains that the money has benefited you, and not just gone to a health insurance company.
Bottom line: Health plans are in a state of flux right now, offering a number of new incentives and possibilities. The cost of health care is likely to continue to rise, but if you are careful about your decisions during open enrollment, you can reduce some of the impact health costs have on your pocket book.