With 2012 coming to a close in a matter of weeks, now’s the time to start planning for a healthy and prosperous new year.
October and November mark the period most companies unveil their group health insurance benefit packages to employees and give them the opportunity to select new options. Any changes needed, from medical insurance coverage to the amount of money withheld for a flexible spending account, must to be made now in order to go into effect in January.
What is Open Enrollment?
While each company may have individual deadlines, open enrollment traditionally is held 30 to 60 days prior to the benefits’ renewal or effective date of coverage.
According to the National Association of Insurance Commissioners (NAIC), insurance carriers are obliged to accept all group applicants during this enrollment time without underwriting or providing evidence of insurability.
If your employer-sponsored health insurance program deadline is missed, you may not be able to enroll in your company insurance program until the following year. Exceptions are made for new employees or those with a qualifying life-changing event, such as a marriage, divorce, birth or death.
Anticipated Changes for 2013
Although most changes reflecting the Obama administration’s Affordable Care Act won’t be taking effect until 2014, review your 2013 options carefully as your company may have made some adjustments because of new rules and inflation.
According to the National Group on Health annual survey of health benefits, employers anticipate costs to rise 7 percent in 2013, and 60 percent say they plan to pass on some of that added cost (approximately 5 percent of it) to employees through higher premiums. Forty percent of companies plan to raise in-network deductibles, while 33 percent plan to increase out-of-network deductibles. The survey also revealed 32 percent of companies plan to boost their out-of-pocket maximums, with 13 percent of companies raising the co-payment for using a retail pharmacy for prescriptions. About 8 percent intend to increase the cost of coinsurance for primary and specialist care.
According to a study completed by the nonprofit Kaiser Family Foundation, a family with employer-provided health insurance pays almost $16,000 in annual premiums — about 4 percent more than one year ago. An individual policy saw an increase of 3 percent from last year, totaling an average $5,615. These costs are likely to be passed on to you through the premium and/or coverage.
Changes in Women’s Health
One provision that has been somewhat controversial this year is the mandate that companies and insurers must offer free preventative care for women. This includes well-women visits, screening for gestational diabetes, breastfeeding support, domestic violence screening, counseling and prescription birth control.
The health care reform law will also reduce the amount of money you can contribute to a health savings account or flexible spending account using tax-free dollars. The new provision also adds stricter rules regarding how the money can be used.
According to the national survey, 94 percent of companies indicated they will have to lower the medical flexible spending account ceiling to adhere to the $2,500 maximum for 2013, down from an average $3,000 to $4,000. Many companies will be offering a grace period until mid-March 2013 to use the flexible spending account money from 2012.
Research Your Options Carefully
Your company should offer you access to materials regarding physicians, hospitals, labs and pharmacies within the coverage network and how much coverage the insurance carrier will pay for each plan offered. Be aware there may be changes in these benefits.
Before enrolling in a health care program, the NAIC recommends the following:
- Many insurance carriers, such as HMOs and PPOs, contract with medical providers to negotiate lower patient care costs. While this saves money, be sure your preferred doctors and hospitals are included in the plan. If it’s really important to you to keep your physician, talk to the doctor’s office to verify they will accept your new coverage in the new year.
- If you need coverage for a spouse or dependent, make sure the plan offers you the opportunity to enroll family members
- Be aware of your rights and responsibilities are under each plan.
- Examine the pre-existing condition exclusions and pre-authorization requirements.
- Not all prescription medications are on the list of approved drugs under some plans, so ensure the medicine you take is covered to avoid out-of-pocket costs.
- If you are unsure of coverage or have questions, it’s best to contact the human resources department at your company or the insurance carrier.
Plan for Life’s Challenges
Medical debt can add up very quickly — that’s why it is essential you review the extent of your medical coverage carefully. Even a brief stay in the hospital can leave you with overwhelming bills, so be sure you review the summary of benefits. This is where you will find information regarding your deductible and maximum out-of-pocket cost.
Be sure you investigate the following when choosing a benefits package:
Most doctor visits will require a co-payment, a fixed cost per visit. This cost may be higher if you see a specialist or a doctor outside your network, so make sure you are aware of the possibility of additional expenses. Some visits may also be subject to a deductible.
This is the amount you will pay each year out-of-pocket for medical services before you receive coverage from the insurance company. Opting for a high deductible in an effort to lower your monthly rate may not be a good trade-off if you don’t have the savings necessary to pay that high deductible in the event of an emergency.
Maximum Out-of-Pocket Limit
Once you have paid a certain amount of medical expenses from your own wallet, your insurance company should pick up the bill for most medically necessary expenses. Be sure to find out what the maximum limit will be in the event you have an emergency situation.
Prescription Drug Cost
Be sure to review whether your 2013 prescription coverage will require a co-pay or you will be expected to pay a percentage of the drug’s total cost. It’s also important to investigate coverage rules for generic drugs and brand-name drugs before you enroll. Some insurance programs may require you use their mail-order company for monthly prescriptions.
The National Safety Council reports a disabling injury occurs every two seconds that interferes with an employee’s ability to earn a living, making disability insurance important. Ensure your monthly expenses could be paid by this insurance when making your choice.
Review your coverage amount, and make sure you have adequate coverage to protect your family in the event of death.
Bill “No Pay” Fay has lived a meager financial existence his entire life. He started writing/bragging about it in 2012, helping birth Debt.org into existence as the site’s original “Frugal Man.” Prior to that, he spent more than 30 years covering the high finance world of college and professional sports for major publications, including the Associated Press, New York Times and Sports Illustrated. His interest in sports has waned some, but he is as passionate as ever about not reaching for his wallet. Bill can be reached at [email protected].