Your employer may offer numerous insurance plans for you to choose from. It is important to carefully consider your options before determining which plan to go with. There are several factors that can change the outcome of your decision. It is important to find a plan that works well for you.
Here’s how:
- The first thing to consider is how much each plan will pay to cover your expenses. A good plan will have no lifetime benefit maximum. If something such as cancer were to happen to you, you would be surprised at how quickly you would reach that limit. If you do not have the option of the no lifetime benefit maximum, you should choose the highest available maximum and annual maximum you can afford.
- You should look at how much your deductible is each year, as well. This is the amount that you have to pay out of pocket before your insurance will start paying for part of the cost. Some insurance plans have you pay the deductible before they will cover office visits. Other insurance plans require a copayment for office visits and do not count that amount towards the deductible.
- The next thing you should consider is how much your copayments and coinsurance are. Your copayment is the up front cost you pay to go to a doctor, a specialist or the emergency room. Your coinsurance is the amount of each bill you are responsible for after the insurance pays its part. The most common coinsurance amount is 80/20. The insurance will cover 80% of the costs, and you will cover the remaining 20%.
- Next, consider the out-of-pocket maximums that each plan has listed. Once you reach this limit, your insurance will cover everything else (except for copayments). If you have a high-deductible health insurance plan, your maximum out-of-pocket costs should be the same as your deductible. There are hybrid plans with a high deductible that continue to require copayments after you meet the deductible. These accounts will not qualify for health savings accounts.
- Finally, calculate how much you will end up paying from each plan if the worst happens to you.Be sure to add in the cost of insurance for yourself for each plan. If you have poor health, you will want to choose the plan that will cost you the least amount out of pocket for the entire year. If you are in relatively good health, you may choose to go with the plan with the lowest premiums or you may decide to go with the middle option.
- Many employers are beginning to offer high deductible insurance. This insurance has a lower premium, but you are responsible for paying for everything until you meet your deductible. The deductible is anywhere from $1000.00 to $5000.00 per family per year. If this is the case, you should set aside enough money to cover the deductible each year.
