Healthcare Enrollment

Healthcare Costs are Increasing
According to a survey by the human resource consulting firm, Towers Perrin, healthcare costs are expected to jump 12% in 2004- that averages to an extra $742 more per year for each employee in the United States.

Although employers carry much of the burden, Karen Ignagni with the American Association of Health Plans says more employers are shifting that cost to their employees.

Jeff Libman knows the feeling, "This year we're probably expecting a three percent increase," he says.

That means you could be facing higher premiums, deductibles, and co-payments. To make sure that you find the plan that best suits your lifestyle, Ignagni suggests that you take a good look at your health plan options. Don't wait until the last minute to make these decisions. Ignagni tells us how to evaluate those plans so you get the most for your money.

Open Enrollment

Open enrollment is the time of the year when you can make changes to your health insurance. Ignagni says most companies only give employees about a month to review the plans offered and make a decision.

Sit Around the Kitchen Table

"The biggest concern is that consumers... will make a quick decision," Ignagni says. She suggests sitting down at the kitchen table with your spouse and begin by reviewing your family's medical history.

"We sit down as a family and we look at obviously the benefits, the deductibles, the doctors, and we make a decision based on that," Jeff Libman says.

Use last year's visits to the doctor and expenses as a guide for what you will spend in the upcoming year.

Plan for the Unexpected

Although it's impossible to do, Ignagni says you must factor emergencies into your healthcare plan.

She suggests asking yourself if you're at risk for a heart attack, stroke or cancer and make sure your plan provides you coverage for those specialists and medicines.

" I have a small child so I'm going to look for orthodontic care," Libman says.

Also think about possible visits to:

Opthamologists
Dermatologists
Dentists
Cardiologists
Orthopedists
Gynecologists and Obstetricians

Also check your plan for the hospitals and types of services that are covered under your plan Igangni says.

Costs

Ignagni says when your considering how much you can afford to pay for health insurance keep two things in mind, "How much is coming out of their paycheck by way of premiums every year... [and] how much will they pay out of pocket?"

A Little Help from Your Employer

Sometimes health plans can be near impossible to decipher.

" We're gong to bring somebody in from human resources... so they can explain exactly what the plans are," Jeff Libman says.

Many employers will offer you help through pamphlets or seminars. Ignagni suggests utilizing these resources just to make sure you fully understand the plans and what you're signing up for.

PPO vs. HMO
Many companies offer a couple different HMO and PPO plans for you to choose from. Choosing the right one for your lifestyle is an easy way to save you money.

Ignagni says the difference between HMOs and PPOs depends on the amount of choice you want to have.

The biggest benefit of a Health Maintenance Organization, better known as an HMO, is that it's generally the cheapest option. You simply pay the monthly premium and co-pay every time you see a doctor. However, you can only see doctors within the carrier's network.

Ignagni says that PPOs work much in the same way, but you have more choice when it comes to the doctors and specialists you want to see. You may choose to see a medical professional outside of your plan. The premiums are higher than HMOs, and you'll also have to pay a deductible when you go out of network. But, there is a way you can keep the premiums for a PPO down. Choose a high deductible.

Flexible Spending Accounts

A Flexible spending account, or FSA, is a type of cafeteria plan under section 125 of the Internal Revenue Service Code. Igagni says it's a benefit you may be able to get through your employer, which allows you to set aside a portion of your salary to pay for eligible health care expenses (as well as other types of expenses) with pre-tax dollars.

If you want to take part, Ignagni says the first thing you should do is figure out how much you spend on medical bills on an annual basis. That amount can be taken out of your salary pre-tax in equal installments, and deposited in your flexible spending account. Then, when you pay for an eligible medical appointment, procedure or product, you submit a claim to your employer and you're reimbursed with tax-free dollars.


What's Covered

So, what expenses are considered eligible? You can be reimbursed for any medical care expense that could otherwise be deducted on your tax return. However, keep in mind, you cannot be reimbursed by any other source. Here are some examples of what's covered:

Co-pays
Cost of fertility procedures.
Cost and care for guide dogs.
Cost of lead-based paint removal.
Cost of vasectomy.
Drug and alcohol treatment.
Expenses for equipment or improvements to your home needed for health care.
Eyeglasses, contact lenses, contact solution.
Gym membership (if ordered by doctor)
Hospital service fees (lab tests, therapy, and nursing)
Laser eye surgery to promote the correct function of the eye.
Legal abortion.
Medical insurance premiums.
Prescription medications.
Prescribed birth control pills.
Psychiatric care at a medical center.
Stop smoking programs.
Wages for nursing services.

However, the account will not cover general wellness related costs like joining a fitness club or undergoing plastic surgery.

Use It of Lose It

When setting up a flexible spending account, Ignagni says it's important to know that you MUST use all the money put aside by the end of the year. If not, you will forfeit the funds. That's called the "use it or lose it rule."

You also lose any left over money if you leave your job for any reason. However, on the flip side, while you're employed, your company has to pay for eligible expenses, even if you haven't accrued that amount of money in your account yet.

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