Health, Plans and What You Pay

This article courtesy of Feed the Pig. Copyright 2011 American Institute of Certified Public Accountants.

This month, Open Enrollment will begin for many US employees. Just because you've had the same plan for years doesn't mean it's the best option for you. Often plans change from year to year, which may mean greater opportunities for saving if you switch plans. Take the time to review your insurance plans and other employer-sponsored benefits, and talk to a financial advisor, like a CPA, if you have questions or concerns. Here are some things to consider.

Personal needs. The most important part of selecting insurance is ensuring that all of your needs are met. Do you see a specialist? Do you have any special medical needs or equipment? Do you have high cost prescriptions? What benefits and exclusions are included in each plan? Will all of your needs be taken care of? Ask yourself these questions and make a list of everything that you would like to have covered. Then, refer to your list as you review your insurance plan options.

Consider a high-deductible. According to a Towers Watson survey, two-thirds of large employers will offer at least one high-deductible plan for 2012, up from 61% in 2011; 10% will offer it as the only option. On a high-deductible plan you'll pay lower insurance premiums every month, but more up front before your insurance kicks in. To help offset the burden of reaching your deductible, many companies provide health savings accounts (HSAs); having an HSA also helps build your medical emergency nest egg.

What ifs. As the old adage goes: hope for the best, but prepare for the worst. Run a worst-case health scenario under each plan to see how financially vulnerable you would be should you or one of your covered dependents have a serious accident or illness. Know what expenses are counted in the out of pocket maximums. For example, how much would you have to pay out of pocket with each option if you suddenly need $50,000 worth of care?

Some companies have tools for you to calculate your approximate cost under each plan, giving you a clearer picture of which one will be the best for you. Your human resources department can help you get the information you need in order to make the decision that's right for you. For more information on health care and health insurance, click here.



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