Open enrollment is now in full swing at many companies. Employees must learn about the various insurance and retirement savings options available to them, and then make the best selection for the upcoming year. One of the biggest questions employees ask each year is whether to choose a high-deductible insurance plan or a traditional, low-deductible plan.
Examining you and your family’s medical and financial situation can help you determine which plan is best for you. Ask yourself these four important questions when choosing between plans.
- How many dependents are you covering? If you are covering yourself, or yourself plus one dependent, then a high-deductible plan may be a good choice. There will likely be fewer doctor’s visits and prescriptions to pay for, and the deductible that you must pay up front will still be relatively low. But with more dependents, you can likely expect more visits to the doctor and more medications. Your deductible on a high-deductible plan will also grow as you add more dependents. In that case, choosing a low-deductible plan could save you money. Even though the premiums will be higher, any co-pays and deductibles will be lower.
- Do you get sick often or take several medications? Frequent medical and prescription expenses can make a low-deductible plan your best choice. Although the monthly premiums will be higher, you could potentially save money thanks to the low co-pays and a lower overall deductible. When combined with an FSA (Flexible Spending Account), you can take advantage of pre-tax savings by setting aside money for out-of-pocket expenses. But if you don’t get sick often or don’t take many medications, a high-deductible plan could make more sense. You’ll save money that you would have spent on doctor’s visits and medications, and your premiums will be lower. When combined with an HSA (Health Savings Account), you can also set aside money for future medical expenses and then expect that money to grow as it rolls over year after year.
- Are your doctors and hospitals in the plan’s network? As you compare plans, check to see if your doctors and hospitals are in the plan’s network. Even if they were in-network in previous years, plans and coverage tiers can change. You may be in for an unpleasant surprise if you visit an out-of-network provider: their rates will be higher and you will be responsible for more, or even all, of the bill. If your doctors and hospitals are not in-network for the plan of your choice, take a moment to research the available in-network providers. If you’re willing to use the plan’s in-network doctors and hospitals, you’ll see significant savings.
- Are you expecting any life changes? Open enrollment is the perfect time of year to evaluate upcoming changes that could affect your coverage needs. Getting married or divorced, having a baby, or having a child reach adulthood are all situations where your number of covered dependents or your coverage needs may change.
Open enrollment is an important time for all employees since the choices they make now can affect their year ahead. Contact us today to learn how we can help you and your employees navigate the open enrollment period.