It's open enrollment season on your wallet

Tue Nov 9, 2010 1:11pm EST

Discovery Communications Wellness Center Medical Director Liz Sequeira talks with patient Bonnary Lek during a medical appointment in Silver Spring, Maryland December 3, 2009. REUTERS/Jim Bourg

Discovery Communications Wellness Center Medical Director Liz Sequeira talks with patient Bonnary Lek during a medical appointment in Silver Spring, Maryland December 3, 2009.

Credit: Reuters/Jim Bourg

Somewhere between the Halloween candy and the Thansgiving turkey, many workers have something a lot less tasty to digest: It's that fat packet of insurance information from their HR department.

This is the time of year when employees often have to make choices about their healthcare coverage for the following year. It's called "open enrollment season," but this year, it may feel more like open season on your wallet. With government-mandated changes that broaden health care coverage, the policies have gotten better (they typically will pay 100 percent of preventive care, for example), but they've gotten more expensive, too. The National Business Group on Health, a group representing large employers, estimates that premiums for company-paid plans will rise about 8.9 percent next year.

And that's just the costs you can see. There are plenty of hidden costs and other traps in those plans too. Here's how to avoid them. Hint: You'll have to read that plan booklet, even if it is headache producing.

Look for hidden cost increases. There's a good chance you've already received notice that your costs are going up. "Roughly 63 percent of employers are increasing their premiums, but that's not the only place that costs are rising," says Wendy Nice Barnes of eHealthInsurance.com. "You may also be seeing an increase in out-of-pocket maximums, copays and deductibles." Do the math to guesstimate just how much a visit to the doctor will cost you this year.

Don't assume your company plan is best. You may even find going out into the private market for insurance might be a better choice, especially if you're young and generally healthy. You can get check health insurance plan ratings at the Consumer Reports web site, and get multiple quotes at eHealthInsurance.com. Many states offer comparison tools for the policies available in their state, too. Check with your state insurance authority.

Your spouse may be invited, but not encouraged. More employers are contributing less for spousal and family coverage, so it might cost more than you think to add your spouse or your kids to your policy. Some couples may decide to split their coverage, with each getting covered through their own jobs and the kids getting coverage from the plan that's most cost-effective for the kind of healthcare they use most.

Covering your 20-something child may be complicated. The healthcare reform legislation did compel insurance programs to allow families keep their young adult children on their policies, until the kids are 26. But there are issues there, too. If your child is already between 19 and 26 and not currently covered by your plan, he can be denied for pre-existing conditions. And if he's a healthy young adult without pre-existing conditions, it might be cheaper to cover him independently through a plan he buys on the open market, than it would be to tuck him into your company plan.

Those low deductibles will cost you. You will pay for them in every premium, says Helen Darling, president of the National Business Group on Health. "People often work against their own economic interest, but you should realize that you can actually save a lot of money by choosing a plan that costs you less out of your paycheck." If you can afford to meet higher deductibles and copays on your own, you can opt for a plan that has lower premiums and save money in most years.

You'll need less in your flexible spending account. Flexible spending accounts allow workers to set aside pre-tax money for medical expenses, but if they don't use all of the money by the end of the year (or sometimes, a few months thereafter), they lose it. This year, it could be easy to overfund FSAs, because some of the expenses that used to be allowed for FSA spending won't be permitted in 2011. That includes all over-the-counter drugs and supplies, like bandages, aspirin and cold medicine. If you can get your doctor to write you a prescription for those items, you can still use FSA money to buy them. Furthermore, with policies now compelled to cover 100 percent of preventive care like regular checkups, families could spend less out of pocket for those items, too.

There are a lot of online tools to help you figure this out. At myMedicalCosts.com, you can enter specific medical procedures and services and see what they typically cost. At Plan For Your Health, a joint project of Aetna and the Financial Planning Association, you can use a calculator to guesstimate how much you should tuck into your FSA for next year. And if all of that gives you a headache, hurry up and buy your aspirin now, before the 2011 rules kick in.

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