Maximizing Work Benefits – Health Insurance

The fall season brings change. The trees morph with natural reds, oranges, yellows, and browns gracefully preparing for the cold winter ahead. Children return to school, and the summer chaos comes to an end. Before the holiday season gets underway, and the new year approaches, many employers give you a chance to adjust your employee benefits and reevaluate your health insurance needs.

Each year rates seem to go up faster than raises, and family health needs change, making it more important to look at potential coverages, rather than just renewing an existing policy. During this time, you may change benefits without qualifying or penalty. Taking a few minutes to consider your needs could save you money for the next 12 months or increase coverage for anticipated medical expenses in the coming year. Work policies do not consider pre-existing conditions or healthcare needs, allowing you to tailor a policy for the next 12 months, without a long term commitment. Have aches and pains you have not checked out yet, increase coverage and get the needed treatment. Did you get a clean bill of health this year, perhaps you can increase your deductible to lower premiums?  

Health care needs change, policies change, and your financial status changes, all pointing to a review of your healthcare needs before signing up for the same policy in the upcoming year.

What Coverage Is Most Cost-Effective?

When you initially choose a healthcare plan, you typically choose a plan that exhausts the worst case scenario rather than based on your typical needs. Evaluate annual spending and review the amount of money you actually spent rather than the worst case scenario.

Healthcare consists of more than premiums. You have to consider copayments, co-insurance, items not covered by your policy and deductibles to name a few. When considering what deductible you want, remember this often applies to expenses such as hospital stays or ambulance rides, not routine care. Some policies feature co-insurance to determine coverage for tests like X-Rays or CT scans. Others include tests in the annual deductible.

A co-pay is the amount required to visit a doctor. Annual exams and other preventative measures may have a zero co-pay regardless of the deductible or listed co-pay on the policy. Determine how often you went to the doctor this year to determine if a higher co-pay policy will save you money through lower premiums.

Review your costs for this year and ask yourself the following questions:

Did your coverage have shortages leaving you with higher than expected out of pocket costs?

Did you pay high monthly premiums for services you did not use?

Do you regularly use vision, dental and other services not covered by your policy?

Adjust the coverage if you find you paid for more than you used. If family circumstances changed and you got healthier or developed an illness which will require more care. Planned medical treatment for a surgery planned in advance. Better coverage allows you to address conditions that may be one-time expenses for one year.

How Do You Know Which Deductible to Choose?

Insurance premiums are rising faster than income, and more companies are transferring a greater portion of those costs to employees, resulting in skyrocketing premiums that strain budgets. While the Affordable HealthCare Act, promised higher levels of coverage, it also resulted in higher premiums to pay for the higher coverage requirements. The “Affordable” part is through government premium subsidies, not accessible through employer plans. Employees do gain a tax benefit on the payment of premiums with pre-tax dollars, which helps level the playing field for workers.

Typically, employer plans work with multiple companies offers a variety of coverage. Deductibles and co-pays can be as low as $500 with co-pays as low as $5. On the higher end, deductibles range from $1,000 to $10,000 with some employers only offering high deductible plans. The benefit to a high deductible is lower premiums. The downside is higher out of pocket costs if you file a claim. To balance out a high deductible plan you can participate in a work based Flexible Spending Account or start a Healthcare Savings Account with tax benefits to cover help cover healthcare expenses.

Chronic illnesses requiring regular care requires higher levels of coverage, which translates to higher monthly premiums. You must consider the health of each family member and the risk you are willing to take that everyone stays healthy over the next year.

In or Out of Network

Some of the new health care policies do not offer any health insurance services if you are out of network. Virtually no policy covers you nationwide with most heavily favoring regional or state coverage.

For companies that do have out of network coverage, insurance pays for 40 to 60% of costs, rather than the 80 to 100% for in-network services. These costs can add up significantly if you become ill or have a medical emergency outside of the coverage area. When reviewing plans take note of the doctors and hospitals within the given network of coverage to eliminate additional expenses for routine care.

Testing, Emergency Room, and Surgeries

As an additional cost to consumer’s co-insurance is becoming more common. Co-insurance applies to tests, exams, and other services as a part of care. These are not included under the co-pay, and out of pocket costs often count towards the deductible. In some cases, coverage only begins once you meet the deductible. In other cases, the co-insurance pays a lower percentage than a co-pay. The exact terms will differ among providers.

The cost of emergency rooms, urgent care, and other unexpected medical services can be a co-pay, higher than routine doctor visits, or as part of the co-insurance.

With the rising cost of healthcare, you want to find ways to lower costs without sacrificing the level of care and getting needed treatments. Higher deductibles result in a financial emergency when medical bills come. Lower deductibles may offer extensive coverage, that is not used. Weighing your personal circumstances will help you determine a strategy for balances costs with care.

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