The end of the year is important for many reasons. Planning for next year through open enrollment in your employee benefits plan is particularly important. One key part of your benefit plan is health insurance.
With the costs of health care continuously rising, taking the time to select the right plan is critical — but comparing various premium and plan options can be difficult or confusing. If you’re debating which plan to select, here are some tips to help you pick the right one.
Check the network
Insurance providers often negotiate rates with select providers, and this may affect who you can use at a discounted rate. But if you already have a primary health care provider, you may not want to be forced to make a change. So first, ensure your provider is in the plan’s network, particularly if you change plans.
“The first thing an employee needs to look at is the provider network,” says Laurie Brednich, CEO of HR Company Store. “If you don’t want to switch doctors, make sure your doctor is in-network with the plans you’re considering.”
The easiest way to do this is to call your doctor’s office and ask if they’ll accept your new plan. If so, great. If not, you may need to consider whether it’s worth the change. You can always ask if they can recommend another provider, but the change may not be worth the savings to you.
It’s not just about the premium
Cheap is often confused with being the best option. However, that’s not always the case when selecting the right health insurance plan through your employer.
The plan with the lowest monthly premium payment usually has the highest deductible and often the highest copayments or coinsurance — meaning higher potential out-of-pocket costs for you. On the flip side, a higher premium plan often results in a lower out-of-pocket expense.
“There are two pieces of the insurance puzzle: paycheck and pocket,” Brednich says. “Plans with low paycheck contributions come with high out-of-pocket costs, and vice versa. Both need to be taken into consideration when picking a plan.”
It’s important to look at plan options in light of your needs and your tolerance for risk, Brednich adds. Look at the expenses you’ve had over the past year and try to estimate what you’ll need for next year to determine which plan works best for you.
Understand the plan types
In addition to determining the financial impact of your plan options, you may need to choose between various plan types. If you’re feeling overwhelmed, rest assured it’s possible to make an informed decision and choose a plan that meets the needs of you and your family.
There are four main plan types your employer may offer:
- Health maintenance organization: Most providers outside the HMO’s network aren’t covered. You must visit your primary physician before visiting any type of specialist, such as a dermatologist or urologist.
- Exclusive provider organization: EPOs work similar to HMOs, but you don’t need to visit your primary physician before seeing a specialist.
- Preferred provider organization: PPOs typically offer more flexibility than HMOs. You can go directly to a specialist or an out-of-network doctor, but the plan usually pays a higher percentage of the charges if you visit an in-network provider.
- Point of service plan: A POS is a hybrid of an HMO and PPO. You must visit your primary provider first, but you can also go to out-of-network providers, although at a higher cost.
Plan types may have levels, each one with a different cost. If you have questions about plan differences, ask your human resources department for further explanation. You may want to analyze your needs for the following year before making a final decision.
Don’t overlook wellness programs
Health insurance can be expensive. One great way to keep costs down is to take advantage of wellness programs provided for free or at a discount through your employer.
Employers are well aware of the cost of health care and offer wellness programs as a perk to employees. Here are some popular wellness programs offered by employers:
- Smoking cessation programs
- Weight loss challenges
- Free or inexpensive flu shots
- Onsite fitness facilities or discounts to local gyms
- Health fairs
- Free fitness tracking devices
Your employer also benefits if you’re in better health, so if there’s a program you want that they don’t offer, don’t be afraid to ask for it to be added.
Taking advantage of programs offered by your employer is a great way to supplement your health insurance and keep costs down, Brednich says.
“Employees who suffer from a chronic condition should consider participating in a health coaching program. If they take maintenance medications, they should consider mail-order pharmacy programs. If they’re stressed personally or professionally, they should consider reaching out to the employee assistance program.”
Picking the best health insurance at work can feel overwhelming. But with a little due diligence, you can find the best plan for your needs and keep more money in your pocket.