Even If Open Enrollment Hasn’t Started Yet, You Should Still Start Planning

If you will be getting insurance coverage through your employer, chances are that open enrollment for next year is right around the corner.

Our time to enroll changes from year to year as the HR department negotiates and finalizes the rates for the upcoming year.  What has tended to happen is that the bigger the increase for employees, the later they will announce open enrollment.

So, let’s hope our announcement comes soon!

Even if your employer hasn’t rolled out the details, you can still get started on your planning for next year.  Here’s how.

You can look at how you did in 2012 and get an idea as to whether you picked the right plan.  This can help lead what plan to choose for 2013.

We have three options.

Our employer offered three varying types of plans for 2012.

  • EPO – This was the most similar to what would traditionally be called an HMO.  It offered the highest level of coverage in terms of percentage covered for most procedures, but also had the highest employee contribution levels, and also had a significant deductible.
  • PPO – This plan had lower everything from the EPO: A lower out of pocket cost, a lower deductible, but lower percentage payouts for most procedures that required a co-pay.  It also had a higher out-of-pocket maximum.
  • High Deductible / HSA Plan – This plan was the lowest out of pocket cost, but allowed you to more manage your plan.  This is best for healthy people that don’t typically require a lot of medical care, as your overall costs can be lower.  The risk is that you have much higher contribution limits, so your maximum costs are higher should you require significant care.

What I recommend doing is gathering your plan in formation for 2012.  You did keep it, right?  If not, you should be able to request it from your HR department or find it online where you signed up last year.

Run some what-if scenarios

Pretty much every plan allows you to logon to your insurers website and look at the detailed costs for everything that was submitted throughout the year.  You can use this information to plug in a what-if scenario for how your costs would have been to date for each option.

You’ll already have all of the data available from the plan you actually picked.  Just look at your pay stub to see what was pulled out and look at the insurance information to see what your costs were.

Next, you might have to go back into the other plans and see the differences in both your paycheck withdrawal as well as your out-of-pocket costs.

You can use some shortcut tricks to come up with some of the differences.  If your co-pay difference for an office visit is $10 difference between plans, you can just count up the number of office visits you had and calculate that.  Similarly, if your current plan covered, say, 80% of your costs and a competing plan covered 90%, you could just cut your actual costs in half when coming up with the side by side comparisons.

The point is, it might not have to be exact, but if done right, you should get a good idea on whehter you picked the most cost-effective plan.  If you don’t estimate that things are going to change all that much, you might look at changing plans to one that would have cost you less.

Account for changes

Sometimes, things do change and you know they will.  In years where we had our two kids, we were fortunate enough to know we were expecting the following year at the time of enrollment.  This allowed me to plan based on the costs of childbirth.  This doesn’t work for everybody (e.g. if you get pregnant in February), but even if you’re planning on a kid next year, you might want to plug in as if it’s actually going to happen.

Once you plug in any changes, this also can provide a potential outcome.

Nothing is guaranteed

One thing to keep in mind is that despite your calculations, this will not provide a guarantee that you’ll pick the plan that results in the lowest costs to you.  All it takes is one case of appendicitis or a car accident or something else, and your numbers can go out the window.

I recommend hedging against this in a pretty simple way: If choosing a different plan results in lower costs to you, bank the difference.  If something unexpected happens, you’ll have a pseudo-emergency fund that should cover these costs based on your savings.  If nothing does happen at the end of next year, you might be able to funnel that money to something else.

Do you ever do any pre-planning for insurance?  Discuss!

2013 Insurance Selections Are Right Around The Corner

It won’t be long before employers start rolling out their options for 2013 insurance selections.  This always seems to go very well with Halloween as most of the past few years have been, well, simply frightening.

Last year wasn’t bad.  In fact, my employer didn’t raise anything at all, agreeing to keep all costs the same.  Before we laud their generosity, keep in mind that they essentially doubled the out of pocket costs on premiums, co-pays, and pretty much everything the year prior.  This was met with uproar across the company where the CEO had to have town halls to try to quell the storm.  So, after increasing costs 100%, a 0% cost increase was nice, but it still stung.

We reduced our costs a little more last year by switching to a slightly less costly plan.  This did offer less coverage, but this was fine as we weren’t expecting any major medical costs, which we did have in 2011 with the birth of our daughter.

My guess is that the 0% increase won’t hold for a second year.  So, even if we stick with the less costly plan, we should see our costs go up a bit.  This will be a bummer, as we used the slight savings by switching plans to bump our retirement contribution by a percentage point.  If they were to increase our contribution costs, we might have to roll that back unless they grant raises.

Raises?  Yeah, something we haven’t seen in a few years and since they haven’t made any announcements at all, I’m guessing we won’t either.  This is the joy of your company being owned by a venture capital firm.  They really don’t give a darn about sharing a single buck with employees.

They’re supposedly looking at spinning us off sometime soon, which could mean that new ownership would be a little more receptive to employee satisfaction and retention, things that are suffering but frankly, the current ownership doesn’t care much about.

But, I digress.

The only other option to reduce costs would be to go towards a high deductible, health savings plan.  With this the premium costs sink but you pay most of your costs out of pocket.  In a normal year with no emergencies, this would definitely save some bucks, but the question is always how risky do you want to be, especially with a couple of small children?

It will be interesting for sure.  On one hand I’m not excited at all to see the 2013 options because I’m 99% sure it will increase our costs, but on the other hand, I’m always about planning and knowing what’s coming, so I’m still anxious to see when they release the information.

What do you think is coming for your 2013 health costs?

I Can’t Believe Open Enrollment Will Be Soon

In a sign of how quickly the year is going by, we got an announcement about the open enrollment period for 2012 insurance.   They haven’t announced a date but they did announce some good news, and that’s that they are freezing premiums and co-pays (and in some cases, even lowering the co-pays) for next year.  They also said they will be lowering out of pocket maximums.

That’s definitely great news.  Last year saw a huge increase, though, way above market average, so honestly, this years freeze will probably just level things out to where they ought to be anyways.

We had considered going with an High Deductible Plan in 2011, but because we knew we were having a baby and the associated costs with that, we opted for the more traditional plan, which had higher premiums but also paid out more and had low deductibles.  If we anticipate that our medical needs will be lower in 2011, this could be a good way to go, especially depending on what they come out with for the out-of-pocket maximums.

I’ll keep you updated when the actual info comes out, but that is a welcome bit of good news (now, we just have to see if there will be any raises!).

How are things shaping up for your 2012 insurance enrollment?

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