Tag: health benefits

  • Open Enrollment: Looking Backward to Plan Forward

    September 7, 2021

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    When the autumn leaves fall and the weather turns cooler, we know it’s time to start thinking of open enrollment. Open enrollment season can be a confusing time. As you begin your research into which plan to choose or even how much to contribute to your Health Savings Account (HSA), consider evaluating how you used your health plan last year. Looking backward can help you plan forward to make the most of your health care dollars for the coming year.  Here’s what you need to know about your workplace benefits to maximize them:

    1).  Know the Open Enrollment Dates

    It is up to you to make sure you take advantage of the open enrollment period. Be sure you know when your company has open enrollment because it can be your only time to adjust benefits for the coming year.

    2).  Evaluate Your Current Benefits

    Before open enrollment starts, review the benefits you currently are receiving. Your pay stub can be an excellent resource to find this information; you should be able to find the benefits you are paying for under the deductions or withdrawals section.  Standard deductions might include medical insurance, dental insurance, 401(k) contributions, life insurance, vision insurance, long- term disability insurance, health savings account or flexible spending account contributions, and accidental death and dismemberment insurance.  Review those deductions to make sure you know what you’re paying for and whether you actually used the benefits.

    3).  Ask These Questions to Decide What Benefits You Need

    Everyone’s situation is different, but most employees should have at least medical, dental and vision insurance and make contributions to a 401(k) or similar workplace retirement savings account.

    When evaluating your benefits package, consider what your needs will be or what life changes you can expect for the coming year:

    • Do you have a medical condition that requires ongoing care such as diabetes or heart disease?
    • Are you trying to get pregnant or are expecting a baby?
    • Are you getting married (or divorced)?
    • Is your child turning 26 and can no longer be covered under your health insurance?
    • Does your significant other have coverage, or will you need to include your partner in your health coverage?
    • Are you on track for retirement, or do you need to save more? Don’t forget to take advantage of your company match in your retirement account. This is free money for the future.

    All of these are essential questions to ask yourself during the open enrollment season because they can make a difference in what benefits you choose to elect.  As you browse the different options, analyze the type of treatment and the amount of treatment you have received in the past. You cannot foresee every expense but focusing on the trends will help you make a sound decision.

    4). Compare Out-of-Pocket Cost

    Much like health networks, out-of-pocket costs are crucial when choosing the right plan for you and your family. Most health benefits summaries should highlight the amount you will pay in out-of-pocket expenses, including the pocket limit.

    Your goal in comparing out-of-pocket costs is to narrow down the plans that pay a higher percentage of your medical expenses and offer higher monthly premiums. These types of plans are suitable for you if:

    • You need emergency care frequently
    • You are planning to have surgery soon
    • You often see a primary care physician
    • You have a pre-existing condition or have been diagnosed with a chronic disease like cancer or diabetes
    • Your household income is sufficient to cover the monthly premiums

    5).  Do the Math

    People focus on the monthly premium, but you also need to look at the deductible. For instance, if you have a choice between a lower silver plan premium of $345 a month for a plan with a $5,500 deductible, and a higher gold plan premium at $465 a month with a $1,750 deductible, you’re better off with the second plan if you anticipate needing more than $1,500 in medical care. With the second plan, your total annual cost for the premium and deductible comes to $7,330, a $2,310 savings over the lower premium plan.

    6).  Look at Out-of-Pocket Costs

    The deductible is just one out-of-pocket expense; you also have copayments and coinsurance. The three together are your maximum out-of-pocket costs. Under the Affordable Care Act, the maximum out-of-pocket limit is $7,150 for a single person and $14,300 for a family policy.

    7).  Utilize Tax-Free Benefits

    Flexible spending accounts (FSAs), health savings accounts (HSAs), and dependent care spending accounts provide wonderful tax advantages because contributions are made with before-tax income.  They can be used to pay for deductibles, prescriptions and health-related costs that are not covered by your insurance (braces, eyeglasses, etc.). At the end of the year, you lose any money left over in your FSA so it’s important to plan carefully and not put more money in your FSA that you think you’ll spend.  However, with an HSA, funds roll over from year to year which makes it a great way to save for future medical costs.

    8).  Review the Provider List

    Most health plans today have “in-network” providers. If you see those doctors and visit those hospitals, you pay less out of pocket than if you go outside the network. So, if you want to keep your own doctor and go to a certain hospital, make sure they’re on the provider list.

    When it comes to choosing the best workplace benefits plan for you, education is your most significant defense against making substantial financial mistakes, including not taking full advantage of your employer’s benefits.  If you have questions about any of the benefits offered, ask your HR department for help or clarification.  And remember, looking backward on your past habits and expenses can be an important tool to help you plan forward for next year.

  • Exploring Benefits Lingo

    August 2, 2021

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    We all know how confusing and complex benefits and healthcare terms can be- the difference between deductible and co-insurance is a common question for many and there are plenty of others like it.  When you are comfortable and confident in how your plan works, you can make an informed decision on HOW to use and take advantage of your benefits!

    We have created a list and explanation of the most common terms to help you understand and better utilize your health benefits:

    • Co-payment:  An amount you pay as your share of the cost for a medical service or item, like a doctor’s visit.  Co-pays are most common for emergency room, urgent care and prescription drugs. In some cases, you may be responsible for paying a co‐pay as well as a percentage of the remaining charges.
    • Co-insurance:  Your share of the cost for a covered health care service, usually calculated as a percentage (like 20%) of the allowed amount for the service. For example, if your plan has a 30% co-insurance rate, the carrier will pay 70% of the allowed amount while you pay the balance.
    • Deductible: The amount you owe for covered health care services before your health insurance or plan begins to pay.  For example, many plans require an individual to pay $1,000 in cumulative deductibles before they begin paying out.
    • Dependent coverage:  Health insurance coverage extended to the spouse and unmarried children up to age 26 who are totally or substantially reliant on their parents for support, thereby defined as “dependent children”.
    • Explanation of Benefits (EOB): Every time you use your health insurance, your health plan sends you a record called an “explanation of benefits” (EOB) or “member health statement” that explains how much you owe. The EOB also shows the total cost of care, how much your plan paid and the amount an in-¬network doctor or other healthcare professional is allowed to charge a plan member (called the “allowed amount”).
    • In-Network Provider: A provider who has a contract with your health insurer or plan to provide services to you at a discount. In-Network Providers have contracted with the insurance carrier to accept reduced fees for services provided to plan members. Using in-network providers will cost you less money. When contacting an In-Network Provider, remember to ask, “are you a contracted provider with my plan?” Never ask if a provider “takes” your insurance, as they will all take it. The key phrase is contracted.
    • Open Enrollment: A period during which a health insurance company is required to accept applicants without regard to health history.
    • Out-of-Network Provider: A provider who doesn’t have a contract with your health insurer or plan to provide services to you at a pre-negotiated discount. You’ll pay more to see an out-of-network provider, sometimes referred to as an out-of-network provider.
    • Out-of-Pocket Maximum: The limit or most you’ll pay out of your own pocket for services during your insurance plan period (usually one year).
    • Premium: The amount you pay for your health insurance or plan each month.
    • Qualifying Life Event (QLE): A change in your life that allows you to make changes to your benefits’ coverage outside of the annual open enrollment period. These changes include a change in marital status (marriage, divorce, death of spouse), a change in the number of eligible children (birth, adoption, death, aging-out), and a change in a family member’s benefits eligibility under another plan (losing a job, Medicare or Medicaid eligibility, etc.)

    In addition to understanding these common terms, there are other ways to utilize your benefits, save money and make an informed decision based on your specific needs.

    • Flexible Spending Account (FSA): Funded through pre-tax payroll deductions, an FSA is a cost-savings tool that allows you to pay for qualified healthcare-related expenses with pre-tax dollars. Funds deposited in an FSA must be spent in the same year in which they are set aside, or they are forfeited. This rule is often referred to as “use it or lose it”.
    • Health Reimbursement Account (HRA): An employer-funded savings plan that will reimburse you for out-of-pocket medical expenses. Unlike an FSA, however, you don’t “use it or lose it” – unused balances will roll over and accumulate over time, though the account cannot be “cashed-out.”
    • Health Savings Account (HSA): A savings product that serves as a substitute for traditional health insurance. HSAs enable you to pay for current health costs. They also allow you to save for future medical and retiree health costs tax-free. Unlike an FSA, however, you don’t “use it or lose it” – unused balances will roll over and accumulate over time and can be “cashed-out.”

    Understanding all of the terms and acronyms can feel like learning a new language, so it’s helpful to have a basic reference chart.  With a good understanding of what some healthcare “benefits lingo” means, it will be easier to find a plan that meets your needs and budget. To explore more healthcare terms, visit https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/common-health-benefit-terms-glossary.aspx

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