Thinking about enrolling in health insurance? The Affordable Care Act is still in effect (read about the ACA and unsuccessful efforts to repeal it here) and 2018 Open Enrollment for health insurance is just around the corner: Nov. 1 – Dec. 15, 2017.
So you’re good to go … but you may want answers to some tricky topics first:
HOW DO I PAY FOR INSURANCE?
Paying for health insurance has several moving parts, which means different choices in plans. Some of the following info is really basic, but it’s surprisingly easy to get a few of these options confused:
Deductible: The amount you have to pay entirely by yourself for covered doctor’s visits and health services before your policy starts contributing.
Premium: What you pay every month just to have your plan. This does not help you meet your deductible. But if you pay a higher premium every month, you usually get the benefit of a lower co-pay.
Co-pay: The portion of payment you contribute to covered doctor’s visits and health services – with the rest paid by your insurance company.
Annual limit: The max amount that you have to pay for covered doctor’s visits and health services in one year. After you hit this, your insurance company ponies up for everything covered by your policy.
Like a deejay at a dance party, an insurance company can turn many of these settings up and down. So what’s right for you? You may want to ask yourself this question:
HOW OFTEN WILL I USE HEALTH SERVICES NEXT YEAR?
If your best guess is either “a lot” or “hardly ever,” you may be better off choosing a high deductible and low premium. In the first case, your medical expenses are likely to be higher than your annual limit. Once you hit that, you won’t get any more benefits from a higher premium. Instead, you could be putting that extra money in a tax-free HSA. (Scroll down for more details!)
If you’re super healthy (can we borrow your genes?), you may want to risk a higher deductible since you’re not likely to spend a lot on health care. And if you’re somewhere in the middle – or just don’t love risks – you may choose the higher monthly premium, lower deductible and lower co-pay.
(By the way, none of this is actual advice. You’ll want to consult an expert licensed agent for that. Full disclosure: we know a few.)
WHAT KIND OF NETWORK DO I WANT?
Health plans have different rules around which doctors, hospitals and other health care providers you can see.
HMO: You must select a Primary Care Physician and see only health care providers in your network
POS: Like an HMO, but you can see providers outside your network
PPO: You can see doctors, hospitals and providers outside your network – but you may end up paying more and it won’t reduce your in-network deductible
EPO: Like a more affordable PPO, but with a smaller market of doctors, hospitals and providers
The most important thing you need to ask is: will I have access to my current favorite doctors, specialists and hospitals in my plan? If a plan offers that, it may be the right one for you … regardless of its limitations or the size of its network.
HOW WILL I PAY FOR WHAT MY INSURANCE WON’T?
There are several options these days for what’s known in the biz as “consumer directed coverage” — tax-free savings accounts that pick up where your insurance plan leaves off (for instance, before you’ve met your deductible):
FSA (Flexible Spending Account): If you get your health insurance through work, your employer can set up and contribute (with limits) to this tax-free account. Every year, you designate how much you want taken out of your salary to pay for qualified expenses not covered by your health insurance. Unspent funds at the end of the year are forfeited.
HRA (Health Reimbursement Arrangement): Another employer one. Your company sets this up and provides the tax-free funds you can use to pay for qualified health expenses or health insurance premiums. You can’t contribute. Unspent funds carry over from year to year.
HSA (Health Savings Account): You can set this up for yourself … or your employer can set it up for you. It’s tailor made to supplement those “high deductible” plans we talked about. Your account can receive tax-free contributions from anyone. And unspent funds carry over from year to year.
Need additional help navigating the maze of health insurance options? Call the friendly licensed agents at Mylo! We look forward to helping you out, even if you just want advice.Let's Talk!