Fall is here and that means beautiful foliage, football, apple cider and open enrollment forms.
If you have a full time career where health care is provided, each year you are likely given a stack of forms that include the option to change your health care options.
Much like your 401(k), many of these forms come with a memo from your human resources department telling you what to check, where to sign, and some charts that you may not understand.
Of course, not all open enrollment packets are the same but let’s look at some essential health care open enrollment tips to remember.
Don’t be too Trusting
Health care expenses are expected to rise 8% in the next 12 months and in a world where profits are not as easy to come by, don’t expect your employer to absorb those increases and don’t expect them to be completely forthcoming about how they’re making you pay for it.
Either they will reduce your coverage, automatically place you in a stripped down health plan, or charge you more for your current plan.
This is why you have to read all of the forms.
If you’re able to maintain a full time career, you’re able to understand these forms. Don’t sell yourself short. Take the time needed to read the packet and when you get to something you don’t understand, circle it and make a call to your human resources department the next day. Bothering them now with a question is much better than having to deal with an insurance company telling you they don’t cover something or arguing a deductible you didn’t understand.
What is Actually Covered?
Besides the costs that are taken from your paycheck, you need to know what other costs you will have to pay with a plan for the next year.
Don’t assume that a plan will stay the same year-to-year!
What are the deductibles for visits? Are prescriptions covered (and are the ones you need covered)? Do you have to mail in certain prescriptions? Are there limits to certain kinds of visits that you may need (for example allergy shots or chiropractic)?
Know what you need in medical coverage and then compare the plans to your needs.
Check Your Doctors
Before you make a decision on which provider to take (if you have choices), make sure that the doctors that you use are part of the plan. Understand what the consequences are if you use an out-of-network doctor, that is, a doctor that isn’t specifically covered in the plan.
Don’t get caught having to pay the full price for a visit and treatment for a doctor that’s out-of-network!
Don’t Get Bit by the COBRA
It’s not something you want to think about but in that packet there will probably be a COBRA form that details your health insurance rights if you are laid off. COBRA gives you the right to continue with your company’s insurance plan if your employment is terminated but don’t expect it to be cheap.
When you read it, you’re going to find that it’s expensive because your employer is no longer contributing to the cost. As much as it is practical, include the COBRA costs in to your emergency fund. You may be able to find cheaper insurance through another source but be prepared for the worst.
The FSA or HSA
If you’re employer offers a flexible spending or health savings account, enroll in it. This gives you pretax money to spend on qualified medical care. Think of it as a 30% discount on health care expenses. There will be a question asking how much you want to deposit in to this account each calendar year.
With an FSA, you won’t get the money back if you don’t use it all so don’t deposit too much. Most providers have online calculators to help you figure out how much to take. Divide the total amount by the number of paychecks you get in a year and that is what will be deducted from each check. Remember, the amount taken from your check will actually be less because it is pre-tax (you aren’t taxed on the amount, which is what makes FSAs so nice).
Know the Deadline
You don’t have forever to decide on your healthcare for next year. Usually you have a couple of weeks to decide.
Don’t put yourself in a position where you quickly pick a plan because you have an hour left to get your forms in or you can’t get online to submit for some reason.
Set up reminders to get your forms completed. Use an online calendar and set up reminders. Google Calendar can be set up for reminders and can send you a text and email. Many other calendar programs are similar. Put up post-it notes if that helps. Do whatever it takes to make sure you pick your health care provider on time!
Your open enrollment forms detail your health care for the next calendar year and once you submit the forms, most employers don’t allow you to change them (unless you have a “qualifying event” such as a new child or marriage).
Read all of the forms carefully and ask questions. Nobody likes to be “that person” with all of the questions but health care is far too important to trust to somebody else.
Jenna, Adaptu Community Manager says
I need to check out those FSA or HSA calculators. Are there any online you can use?
Glen Craig says
Here’s an FSA calculator I used to use (the company handled the FSA where I worked):
Vince Thorne says
Thanks. One more thing to add. Consumer Driven health Plan with a guaranteed company contribution is a good option. the company contribution accumulates over years. So if you are young and not planning on switching jobs the money will grow over time and you will have saved for a rainy day health emergency. Plus these have annual caps which are high but affordable in case you do face an unfortunate health event.
Glen Craig says
Thanks Vince. I didn’t know what a CDHC plan was and just looked it up. It sounds interesting but it looks like it’s more of an employer option to implement. An employer has to have the plan as an option in order to use it.
Personally, I’d rather have a company pay for my health care, though I understand a lot of employers are looking to move away from this model.
If a person had the option of a CDHC plan, they need to make sure they understand what costs they are responsible for.
Most people undervalue FSA contributions. While technically correct in stating that you might get a 30% discount on healthcare expenses, there is another way of looking at those figures: comparing the gross income needed to cover the expenses.
If someone had $2,500 in qualifying expenses, that person would have to earn and divert that amount into an FSA. To get the same spending power using after tax dollars the math is different – $2,500/(1 – .3) = $3,571.
You would have to earn an extra $1,071 to have the same purchasing power using after tax dollars. The savings calculator understates the case.
Jenna, Adaptu Community Manager says
Also, if you have an Adaptu account, you can tag your purchases as “medical” and then run a report to see how much you / your family spent on medical things last year and have a good idea how much you need to save for you HSA.
health fans says
hmm,maybe i need prospect to the future abouth my health plaining,many information i get here.i will replaning start now.thank you