Have you started shopping yet? No, I'm not talking about shopping for the holidays; I'm talking about something more important — your health insurance.
It's that time of year when many employers have their open-enrollment period and the federal and state health insurance marketplaces are open for business. Open enrollment is your annual opportunity to review and make changes to your health insurance plan so you end up with the best plan for your needs.
Here's what to consider when selecting an individual or family plan offered by your employer or the health insurance marketplace.
If your employer offers health insurance:
- Don't assume your health insurance hasn't changed. Most people pay attention to the premium changes because it immediately affects their take-home pay. But you should be paying attention to the total out-of-pocket expenses, including copays, deductibles, and coinsurance. Also, make sure to check that your health care providers are still in network, especially if you are planning on taking or continuing with an HMO plan.
- Ask questions. It's important to understand all the terms of your plan thoroughly and have a clear idea of what your financial responsibility is for different scenarios. So if you can't make an informed decision because you don't understand all the terms of your plan options, ask your human resources department (HR) to explain them for you. (Here's a description of the basic health insurance plans and network types: HPOs, PPOs, and more.)
- Plan for the whole year. I know a couple who picked out a High Deductible Health Plan (HDHP) just because it came with a Health Savings Account (HSA) and the company was going to put $500 into their account. They wanted the $500 but failed to take into consideration the fact that they were trying to conceive.The pregnancy ended up costing them $10,000 (minus the initial $500) because they chose an HDHP. So essentially, by looking at immediate cash instead of planning for the entire year's medical needs, they ended up spending $9,500 out of pocket. Think about ALL the possible surgeries or health decisions you may need to make for the next year as you pick your plan to make sure you have the best possible coverage.
- Check if your plan offers an HSA. If you do pick an HDHP, find out if your employer is offering an HSA to go with it. If you are in great health, you can set aside money in the HSA and let it grow for future expenses.
- Think about prescription coverage. My prescription coverage has changed dramatically the last few years, but I have been prescribed the same set of drugs for a couple of years now. Before I pick a plan, I talk to a representative to find out exactly how much it will cost me to get the drugs using the different ways they list it out in the plan documents.
- Pay attention to the wellness programs offered. More and more companies are offering plans to help their employees get well. According to the Kaiser Family Foundation 2015 Employer health benefits survey, “eighty-one percent of large employers (200 or more workers) and 49 percent of small employers offer employees programs to help them stop smoking, lose weight, or make other lifestyle or behavioral changes. Of firms offering health benefits and a wellness program, 38 percent of large firms and 15 percent of small firms offer employees a financial incentive to participate in or complete a wellness program.”If your company offers a plan, make use of it. It could be a discount to a gym, a free online-meal-planning service, or even a reduction in the premium.
- Remember that you can shop around. Just because your employer is offering a plan doesn't mean you have to take it. You can still shop for a better plan in the federal or state health insurance marketplace. You might not be eligible for the subsidized rate, but you can most certainly shop around to see what the rates are.
Important dates and deadlines
|November 1, 2015||Open enrollment started. Coverage can start as soon as January 1, 2016.|
|December 15, 2015||Last day to enroll in or change plans for new coverage to start January 1, 2016.|
|January 1, 2016||2016 coverage starts for those who enroll or change plans by December 15.|
|January 15, 2016||Last day to enroll in or change plans for new coverage to start February 1, 2016.|
|January 31, 2016||2016 open enrollment ends.|
In addition to the annual open enrollment period, there are special enrollment periods for a number of life events like marriage, the birth of your child, losing your job, to name a few.
If you're shopping in the marketplace for health insurance:
- Understand your tier. There are four metal tiers — Bronze, Silver, Gold and Platinum — but not all of them will be offered by every company. How much you will pay in premiums and out-of-pocket expenses for your care next year will depend on what metal tiers you choose. The higher the metal tier, the higher your premium and the more your health plan will pay for your care.
As a general rule of thumb, bronze covers 60 percent of your care; silver, 70 percent; gold, 80 percent; and platinum picks up the tab for 90 percent of your care. And all of them cover the 10 areas of essential medical care:
- Emergency services
- Maternity and newborn care
- Mental health and substance-use disorder services, including behavioral health treatment.
- Prescription drugs
- Rehabilitative services and devices
- Laboratory services
- Preventive and wellness services
- Chronic disease management
- Pediatric services, including oral and vision care.
- Get help. Navigating the health insurance marketplace doesn't have to be overwhelming. The key is to focus on your state requirements as all of Obamacare is administered on the state level. If you think you need help, ignore the ads that claim they'll help you. They will charge you money for what you can easily do for free. Moreover, there are people who are getting paid by the government to help you, for free. Use those resources. You can find someone to understand, pick and apply for a health plan here – Find a trained assister in your community.
- Understand your options and subsidies. Fill out the insurance finder with as much information as possible. This will help you get the most comprehensive view of different plans and metal tiers from all the health plans.Depending on your income, you might be eligible for subsidies. People earning income between 100 percent and 400 percent of the federal poverty level get help for paying for their insurance as long as it is an eligible plan purchased through the marketplace. If your income is between 100 percent and 250 percent of the federal poverty level, you can also qualify for cost-sharing reductions.
A survey conducted by the Commonwealth Fund, a nonpartisan health care research foundation, found that 24 percent of those who were eligible for subsidies if enrolled in silver plans were instead enrolled in bronze plans, which have the cheapest premiums, but may carry higher out-of-pocket costs. The speculation is that either people didn't know about the subsidies or they chose a bronze plan because of the lower premium.
- Plan for the whole year. Make a list of all the drugs or medical care you are anticipating and a list of all the medical expenses you incurred in the last year. Use this as a guide to choosing the plan that best suits your need.
- Understand the individual mandate. Most people must have health insurance or pay a fee when they file their income taxes. In 2016, you'll pay a penalty of either 2.5 percent of your income, or $695 per adult ($347.50 per child) — whichever is higher. In some cases, you might qualify for an exemption from the requirement to have health insurance. So if you think you don't need health insurance because you are young and healthy, you might want to look at getting at least a catastrophic plan. They have very low monthly premiums and a high deductible ($6,850). They include up to three primary care visits and certain preventive visits at no cost. If you are eligible (under 30 years of age), it will be displayed as part of your options.
- Other useful links:
Frequently asked questions
Here are some frequently asked questions regarding health insurance. If you have a question, comment below and I will try to answer them.
Will I be charged more if I have a pre-existing condition?
No. Health plans are not allowed to charge more based on pre-existing conditions.
I have my own plan, but it is too expensive. My open enrollment was in July. Now my spouse's employer is offering a better plan, but my employer says I can't change until next July. Is that correct?
It depends. When coverage periods are different, it is up to the company to decide whether it allows its employees to drop the plan so that they can sign up for the other one. These “change in status” rules are determined by the employer.
I heard I can get free breast pump if I am pregnant. Is that right?
Yes. Under the Affordable Care Act, insurance providers should cover the cost of a breast pump and some level of lactation services. Contact your provider to find what choices they offer.
Health insurance may be a complex topic; but now that you have the basics, you should be able to determine the best plan for your situation. Of course, if you have any specific questions, please comment below. Or contact the local assister in your community for marketplace questions or your HR department for employer-sponsored health insurance questions.
Are you making changes to your health insurance plan this year? What benefits are you seeking, and how different is the cost?
Suba Iyer is a blogger by trade and a personal finance geek at heart. After living from paycheck to paycheck in spite of her above-average income, she figured money is not just about math. It involves human psychology, application of knowledge to individual situations and having all the right information. She now dedicates most of her time to writing about intelligently leveraging knowledge, time and money at Wealth Informatics. When she is not writing, you can catch her in her garage working on wooden toys for her daughter.