Good evening. Let’s begin part 2 of annual enrollment for employee sponsored health insurance plans. This is the part that may take some time. Yesterday, we discussed plan types, now we will move into the detail for each plan that really matters. Let’s start with the deductible, the amount you must pay before your insurance with pay for your medical care. If you are lucky enough to have a $0 deductible, please head directly to the section on premiums.
To compare similar plan types look at the language for out of pocket costs, basically what you pay each year.
Step 1 – Start with the deductibles. A high deductible does not always mean you have to pay more. If you are generally healthy, a higher deductible may be a good option. Plans with higher deductibles have lower premiums, in other words, less deducted from your paycheck.
“Important” Check the language for your deductible. If the language states anything like “must meet deductible” or “applies to deductible” for primary or specialty visits or prescriptions, you will have to pay your deductible before the insurance will pay for any services under your plan.
For example, if your deductible is $500, you will pay for all services until you have paid the $500 dollars to the health plan. These are your out-of-pocket costs. Basically, your insurance does not cover services until you spend $500. This is not lump sums paid immediately, but as medical services are provided to you. This is a quick tip. Generally, you want copays for office visits and prescriptions, so you don’t have to worry about paying your deductible before you visit the doctor.
However, something else to consider, please be aware of any language noted in your benefits guide summary, under the Limitations & Exceptions Section, stating something similar to “if you receive services in addition to office visit, additional copays, deductibles, or co-ins may apply”. This means your deductible and co-insurance (co-ins) will apply to these services.
For example, when you go to the doctor for a flu shot this season, you will have a copay for the doctor’s visit, but the flu shot will apply to your deductible and co-ins. In other words, you will be charged twice. Definitely expect to see a bill for any medical care your doctor provides during the office visit. If you only go to be examined and a quick chat there will be no additional costs to you.
If you are starting to get a migraine, you are on the right track. Most plans these days all have similar services and/or offer the same types of care. The significant differences are in the descriptions for each service this is where benefits get decided. Don’t worry I’ll help you. The next step is regarding premiums, which I ensure is more straightforward.
Step 2 – Next, what is your premium? This is the amount you will pay each pay period. If you have a high deductible, the premiums are generally lower. Selecting a high premium, with a low deductible does not mean you will pay less. This is very deceptive. Calculate your premium by multiplying the premium by the number of paychecks you receive per year to get the total out of pocket costs for the year. Wait until the last step to determine the better premium.
Step 3 – Determine what else you need to pay for each year? This would include physician visits, preventative care, and prescriptions. The best plans will have copays for these services, which do not apply to the deductible. If there is an option that applies to the deductible, I suggest eliminating it. Another alternative is to have co-insurance for these services. This means you pay a portion of the total bill from the doctor and the insurance plan pays the remainder, assuming of course the deductible has been paid. These are not great choices either, but sometimes all that is available.
Step 4 – Lastly, conservatively assess your level of health. If you have an illness or could be at risk, it is essential to read the emergency benefits section thoroughly. If you need to be hospitalized or may need emergency department services, this could drastically increase your costs. Most often you will have to pay your deductible and a portion of the bill for these types of services. This will get very costly quickly, if the hospital or emergency room visit includes MRIs, surgeries, observation or lab tests.
Step 5 – Double check what is not covered. If you utilize a service that is not covered under your plan, expect to pay for everything. These non-covered services may include acupuncture, cosmetic surgery, bariatric surgery, infertility treatments, and habilitation services. In the last few years, plans have started to cover some of these services. It is still better to double check. If you are paying out of pocket, please include in the calculation. If your plan offers a Healthcare Savings Account (HSA), you can divide these costs over the entire year. In order to accurately calculate, make sure to ask the doctor how much it will cost you annually. Be aware HSAs, do not refund money, so make sure to use it.
If you have any questions, please let me know. We will get through these components before your open enrollment starts in a few days.
