In the next month or so, those of us who get health insurance and other benefits from our jobs will be receiving our annual open enrollment packets in the mail. If your employer offers several different insurance plans or levels of coverage, you’ll be able to switch plans at this time. You will also be able to opt in to receive coverage that you might have skipped in previous years and perhaps even arrange to open special tax-advantaged savings plans to pay for health care costs and dependent care.
Getting All the Information You Need
Unless you change employment or have an event that will change your status (such as getting married, going through a divorce or becoming ineligible for your previous insurance, for example) these plans will be the ones that you’ll live with all year, so it pays to have all the facts before you make a decision.
Take advantage of any seminars or question and answer sessions that your employer might offer about these plans. Before you attend, read through the packet carefully and write down your questions. If you are married, make sure you have your spouse do the same.
If your employer doesn’t offer an information session, you can still go to HR with any questions that you might have. Some things you might need to know:
Will all my household members be eligible for coverage? Be sure to clarify about stepchildren. From talking to my kid’s pediatrician’s office staff, many employers are doing dependent audits this year so if eligibility isn’t cut and dry ask before you find yourself in hot water.Is coverage automatic or will I have to meet certain requirements? This is common when you opt for expanded life insurance coverage.How will I use my spending accounts? How long will I have to wait to be reimbursed for out of pocket expenses?Do I Need to Change Plans?
The employee portion of your health insurance can be a significant expense each month. If your employer offers different tiers or kinds of coverage, it can be tempting to go with the cheapest plan but before you do, make sure that it will be adequate for your needs.
In many cases, the health insurer that your employer contracts with will have online wizards that can help you determine which plan suits your needs best, but don’t solely rely on what they say. Some of the questions you’ll want to ask yourself as you make your decision include:
Am I and my family in general good health?If you have the choice of providers, did you find it easy to work with your current provider last year?How much did we spend last year on health care? By the way, if you haven’t up to now, keep careful records this time around to help you for next year.Do we have any chronic health conditions? Or, do my family members need special care like speech therapy or occupational therapy that might not be covered by all plans?Do we need regular prescription medications?Could I cope with the greatest possible out of pocket expense? Look at the maximum family deductible and maximum coinsurance amount to get an idea of the worst case scenario.Do I have a small child or am expecting to add to my family in the coming year? Even healthy infants require at least 5 or 6 well baby checks and many vaccinations that first year, so a plan that covers those almost or completely in full could be worth an extra premium. Likewise, even healthy pregnancies require many doctor’s visits and deliveries aren’t cheap. If you want to give birth at home with a midwife or at a birthing center, you’ll want to check coverage for those things as well.What is my comfort with risk?If you have any questions about specific coverage, you should be able to get instructions from your HR department on how to contact the potential insurer(s) directly to get clarification.
Other Points to Consider
Find out all the specifics about health savings and dependent care plans before you enroll. For health savings plans you’ll want to know if it’s a FSA or HSA as there are significant differences between the plans, notably that funds in FSA are use it or lose it for the year. You’ll also need to find out what expenses qualify for your dependent care account and how you will be reimbursed.Remember that you can shop around. While for many of us, employer sponsored plans are the cheapest and offer the best coverage we’ll be able to get, there is no rule that says you have to opt for your employer’s plans so if it seems too expensive, shop around. eHealth Insurance and HealthCompare both offer free online quote tools.Review the details of vision and dental plans carefully to make sure they are worth the money. Some offer very little coverage for the premiums and if you have minimal needs, it make more sense to pay out of pocket using a tax-advantaged plan like your HSA or FSA.Likewise, talk to your insurance agent about private life insurance instead of being dependent on our employer’s plan. If you are relatively young and healthy, it should be fairly inexpensive to bundle this with your other policies for auto and home insurance.Other benefits like prepaid legal and coverage for accidental dismemberment, dread diseases and so on should be looked at with a skeptical eye.Information about investment opportunities offered by your employer and retirement plans and accounts goes beyond the scope of this article but the same advice stands: read all the information, don’t be afraid to ask questions and do your own research and calculations to decide what is right for you.Are you the kind of person who enjoys comparing facts and figures and figuring out the best plan or are you like me and dread the entire process, wondering the whole time how much your copay will go up this year?
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