Tuesday, November 13, 2012

Evaluating Employer Medical Benefits Plans

When you have a chronic illness, you think about many things differently. For example, your time, energy, money, and even your days off are spent differently. You carefully allocate each of these resources because you know they are limited, and because your next rainy day could be tomorrow.

Medical Benefits are another thing I consider much differently than I did before I became sick. In the U.S., it's currently open enrollment time for many employers' benefits plans. Open enrollment for the 2013 coverage period may already be over for some organizations; at my company, enrollment closed last week. Even so, I'd like to share some of the lessons I've learned in my own experience of enrolling for and using my medical benefits.

Evaluating Employer Medical Plans
Let's face it: most health plans are set up to cater to the healthy. There are some basic tips that every person should know such as:

1. What are the premium costs - per paycheck, month, year?
2. What are the estimated co-payments and out-of-pocket expenses for doctor's visits and medications?
3. What are the deductibles and maximums for out-of-pocket expenses?

You can view a full list of items to consider at the Plan for Your Health website: http://www.planforyourhealth.com/open-enrollment/article/show/benefits-decision-2012-top-10-tips-for-open-enrollment/

No one ever plans on getting sick. But when you have a chronic illness, there are additional needs to plan for. Here are some additional suggestions on what to consider when enrolling for medical coverage:

1. Are the providers and specialists you are currently seeing in your network? Will that change this year?
2. What are the co-pays and out-of-pocket expenses for specialist visits? Do they vary from seeing your Primary Care Provider (PCP)?
3. Will you need any medical procedures in the next year? What is the coverage for those? If necessary, you can contact your provider's office to get a cost estimate. Make sure to ask if there are associated services that would be billed separately from the procedure, such as anesthesia or a facility fee.
4. What are the co-pays and costs associated with an ER visit? Is the co-pay waived if you are admitted?
5. What are the costs associated with using an ambulance? (This is a service I never had on my radar, even after being diagnosed with Crohn's Disease. However, after suffering an emergency that required it, that has changed. I'll address my experience in a separate post.)
6. Are you planning to travel, and to where? Do you know what your coverage is if you are out of state?

Finally, as was already addressed, what is your coverage for prescriptions? On our current plan, this was a key factor for us, as some of my meds are not considered "preventative". Thus, instead of paying a co-pay, I must pay the full retail cost of the drug. This amount does get applied to the deductible and the plan's maximum out-of-pocket (MOOP), but early in the year, this can be expensive (a 3-month supply of Pentasa is approximately $1,200). Because of this, I pay close attention to what formulary tier my prescriptions fall into, as this greatly impacts our out of pocket expense (more on prescription benefits and prescription tiering coming soon).

Be sure to check the deductibles and out-of-pocket maximums for both individuals and family. This could impact your expenses, as well, depending upon each dependent's needs. If you have multiple people working outside the home, you may also consider the cost/benefit of splitting the coverage for your dependents, based on what the individual and family needs, coverage premiums, and benefits are.

Spending Accounts
Spending accounts and their limits should also be carefully weighed in your decision, as these accounts allow you to save pre-tax dollars to be used toward your out-of-pocket medical expenses.

High-deductible health plans are often offered with a health savings account (HSA). In 2013, the contribution limit for individuals is $3,250 and for families is $6,450. Unused dollars can be rolled forward into the subsequent coverage year, or be moved to another plan.

If you select a health plan with a lower deductible, you may elect to contribute your pre-tax dollars to a flexible spending account (FSA). However, in 2013, the limit to FSA's has dropped to $2,500, and for now the funds are "use-it or lose-it", meaning if you haven't spent the balance by the end of the plan year, the remainder gets forfeited (usually to your employer).

Once you calculate your estimated out-of-pocket expense on each plan, make sure to take into consideration how much of that may be covered by a spending account and what you would save in tax dollars. Finally, add in the annual premium cost, and you should have a good idea of which plan is best for you.

Benefits enrollment has never been a fun task for me, and it's even more difficult since becoming sick with a chronic illness. But given the current unemployment rate in the U.S., I consider myself extremely fortunate to have a job and the benefits that come with it.

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