It’s that time of year when we are faced with selecting our health benefits from the list of options provided by our employers. Unfortunately, understanding the difference between the options and the coverage provided is often difficult to unpack and we usually just choose the cheapest or just go with whatever option we selected last year.
There certainly isn’t any right or wrong selection or a blueprint for selecting coverage, however, selecting your healthcare plan should really be a full risk assessment considering many factors other than just pricing.
Here are 10 things you should consider when making your selection:
1. Are you single or married?
Have you considered the cost / coverage variance if you and your spouse are on the same plan or maintain two individual plans?
2. Do you have children?
Have you considered the cost / coverage variance if you cover the children on your plan or the other parent’s plan (or for you all the be on the same plan)?
3. How often do you go to the doctor?
Do you just go for annual check-ups (wellness visits)? If so, these are often free and have no copay
4. Do you have any pre-existing conditions that require Specialist (Non- primary care doc) visits
Do you mind getting referrals each time or would you prefer to just make an appointment directly with the Specialists
5. How much are you willing to pay out in the event of an emergency (MOOP)
This is relatively new with Affordable Care Act – every plan has a Maximum Out of Pocket Benefit (usually a separate one for in Network and Out of Network). This is the maximum amount of money you will have to pay in a given year in the event of a medical emergency / catastrophe.
Note: These are generally much higher for family plans than individual plans
6. Does your job offer a flex spending account?
Some people elect to take the ‘cheaper’ plan option and put a decent amount on their flex spending to cover some of the MOOP in the event of an emergency
7. Do you travel a lot?
If so, does your plan allow for coverage outside of your state / country?
8. Are you “life planning” for this year (e.g., planning to get pregnant)
Will you need to increase the amount you elect for short or long term disability depending on your company’s parental leave policy?
What is the cost of hospital stays or ER visits?
9. Copay vs coinsurance vs deductible
Important concepts to understand and see the impact of your selections:
o Deductible – This is usually the amount you will have to pay out of your pocket before the insurance company will begin making any payments (usually excludes wellness visits)
o Copay – This is the portion you will be required to pay at each visit to your provider (usually differs for PCP or Specialist – also something to consider if you need to see a specialist regularly)
o Coinsurance – This is often for Out of Network Coverage. Usually once the deductible has been paid, there is a percentage split of what your insurer will cover and what you will be responsible for (i.e., 80/20 – insurer will pay 80% and you will be responsible for 20%). This is not a big deal if the amount is $100, but in instances (and more realistically) when it’s $10,000 or $100,000 that could be a game changer. Fortunately, your MOOP will protect you against that. Once you’ve paid your MOOP for a given year, the insurer is responsible for the total remaining reimbursements to the provider. In my opinion this is the biggest benefit the Affordable Care Act provides, and probably explains why most insurers hate it.
10. Last but most, Cost
Taking into account all these factors, what can you actually afford as a deduction considering your other financial obligations, and what might you be willing or unwilling to risk as a result.
I hope this helps … If you have any additional questions, feel free to inbox me. I don’t know that I’ll have all (or any) of the answers but I wanted to help you become more informed when making these decisions that you’ll be locked into for an entire year.
Feel free to share this status so others might benefit from the information... but then again, what do I know
