'Tis the season to choose your health plan. But for many Americans, the interworkings of open enrollment sound like a foreign language.
Dan Ament, Financial Advisor with Morgan Stanley, says being able to fluently navigate your annual health care elections can make a big difference in your physical and financial health.
Here are some ways to help you navigate open enrollment:
Get familiar with the terms:
"Understand that the total cost of your healthcare is more complicated than comparing the premium cost of your plan," Ament said. Here are some terms to familiarize yourself with:
Premium: The amount you pay each year for health insurance coverage. This will typically be divided up into a monthly payment or come out your paycheck.
- Copayment (copay): A flat fee you pay at the time of service. This only applies to certain services and is not a feature of every healthcare plan.
- Deductible: The annual amount you must pay per family member before your health care provider will pay for service.
- Coinsurance: Many plans require you pay for a portion of the services you receive. This amount is usually determined by a percentage. (i.e 80/20 health plans require you to pay 20% out of pocket.)
Know what is changing:
Ament suggests you invest your time into reviewing all available plans. Whether you are hitting the open market or reviewing plans offered by your employer, compare the options to your policy from the previous year.
Ament suggests, "Ask yourself, 'have you experienced changes in your family's health or family status?'" Also, check to make sure the plans you are considering include your current doctors and healthcare providers.
Flex Spending (FSA) and Health Savings (HSA) Accounts:
If available, consider taking advantage of these healthcare-related reimbursement accounts. The money you dedicate to these accounts is not taxed, which could save you money on medical expenses.
FSA accounts are considered "use or lose" accounts. They have a deferral contribution limit of $2,650 for singles, or if both spouses have FSAs the combined max is $5,300. HSA accounts can be used by those who have high-deductible health plans (HDHP). HSAs have a contribution limit that ranges from $3,450-$7,900. The money carries over into each year, so you can accumulate pre-tax funds for future medical expenses.
Here are some links to help you make the right choice for you: