Companies are in the midst of opening their annual window for employees to make coverage changes so it’s time to think hard about health insurance.
Although this may not sit atop everyone’s to-do list as the holidays approach, it should be somewhere on their list because big savings can ride on decisions made ? or not made ? this fall. Even so, benefits experts say they face a common foe when it comes to getting employees to focus on their benefits.
“Inertia is our biggest enemy,” said Ingrid Lindberg, a customer experience officer with health insurer Cigna Corp.
With that in mind, here are some pitfalls to avoid after that e-mail arrives letting you know that your company’s open enrollment season has started.
1. DON’T BLOW IT OFF
Most employers hold open enrollment for several weeks in October and November because their benefits coverage year starts Jan. 1. Unless you get divorced, have a child or leave your company, open enrollment may be your only chance for the year to adjust your benefits.
That means more than just deciding whether to keep the same insurance coverage. Workers may have the opportunity to save hundreds of dollars on child care or medical expenses by signing up for special pre-tax accounts.
At least check your coverage for changes.
2. DON’T ASSUME THINGS STAY THE SAME
Make certain any doctors you see will still be in the insurer’s coverage network. Care providers and insurers negotiate coverage, and networks can change. Out-of-network care can expose patients to larger bills.
Spend a few minutes thinking about how you used your coverage last year and what your expectations are for the new year. Will the plan still cover up to 15 chiropractor visits or did that total shrink to 10?
Anyone who takes an ongoing prescription should check for price changes. Employer-sponsored plans can have tiers or preferred status for drugs, and a move to a different tier affects pricing.
Check with your doctor to see whether your drugs have cheaper generic equivalents. The pharmaceutical industry faces a wave of expirations for patents protecting some top-selling drugs.
The cholesterol fighter Lipitor, the world’s top-selling drug, loses patent protection this month. The anti-psychotic Zyprexa already lost its U.S. patent.
More companies are asking their employees to pay more for coverage. Check to see if the premium, or the amount that comes out of your paycheck for insurance coverage, will change. Your company may offer a less-expensive option.
3. AVOID CONFUSION
Co-insurance is not the coverage your spouse has. It’s the percentage a patient pays for a medical service generally after a plan deductible is met, and it can vary by plan.
Lindberg said insurance terms are the top cause of confusion she encounters from consumers. Many people only look at premiums when they compare their coverage options, but other important terms can make a big difference in the cost of coverage.
Deductibles, for example, are the annual amount a patient pays out of pocket for care before insurance coverage starts. They can stray well beyond $1,000 for some plans.
4. IGNORANCE IS NOT BLISS
Learn as much as you can about what your employer offers because benefits can amount to much more than medical insurance with a side of dental coverage.
Companies are branching beyond the basics as they try to improve employee health and control rising insurance costs. They may offer discounts for a gym membership, a weight management program or some vision coverage.
Employers also may give workers a chance to set aside pre-tax money through health care flexible spending or dependent care accounts. These help patients pay for medical expenses not covered by insurance or care for workers with young children or elderly dependents.
5. DON’T FORGET THE BIG PICTURE
Lindberg compares thinking about health insurance to planning for Christmas shopping. She suggests you start by making a big list of care you expect to use. Then think about how you can best tailor your coverage. Many benefits plans offer online tools for comparing coverage or estimating costs.
Some workers may decide that they want to switch to a plan that takes a smaller bite out of their paycheck but gives them a high deductible, which means they will pay more at the doctor’s office or for care before coverage kicks in. Many employers offer health savings accounts or health reimbursement arrangements to help with those costs.
If you have an adult son or daughter under age 26 who stays on your plan and moves away, learn how coverage will work for them. Some plans have national networks of care providers, but others may only cover emergency care outside of their local network, noted Nancy Metcalf, an editor with Consumer Reports who specializes in health insurance.
“You really need to ask a lot of questions if you’re going to have a family member on your plan who’s not living in your area,” she said.
Workers also may want to think a couple years ahead for big expenses.
Health care flexible spending accounts will be capped at $2,500 starting in 2013. If a family member needs braces, consider starting that care next year when you can set aside more money to cover it, said Jody Dietel, chief compliance officer at WageWorks Inc.
The government currently doesn’t limit how much workers can set aside in these accounts, but most companies cap contributions at around $5,000.