Wow, our annual benefits enrollment was a crappy experience this year. Luckily, I had Shawn’s “How to Choose the Right Health Care Plan” series, and his phone number.
There was no overlap between Stacie’s enrollment (due end of month) and my own (due this week). Although we learned that her employer’s plans hadn’t changed, Stacie still had to harass her HR department to get the new plan costs.
Right now, we’re on my employer’s “premier” medical plan. This plan covers 100% of costs with no deductible and small copays ($10-20). However, next year the premiums on the premier plan are increasing $85 per month to $255. This was a bit of a shock. Unfortunately, Stacie’s employer doesn’t have a “100%” plan, and we found out her employer’s top plan (at 90% coverage) will cost $333/month next year! I think I’d rather get 100% coverage for about $80 less each month!
But my employer’s next lower plan, the “standard” plan, is 90% coinsurance WITH a deductible and higher copays, but it only costs $64 per month next year. That’s almost $2,300 savings per year on the premium against the premier plan! That peaked my interest and I decided to look into this plan some more.
The standard plan is 90% coverage with a $250/individual deductible and a $1,000/individual out-of-pocket maximum. The office visit copays are a bit higher (20/40 vs 10/20), but with the number of times we go to the doctor and hospital each year, that’s a negligible difference. But what does that 10% coinsurance and deductible mean?
I looked through all of our insurance statements from the last year to see what 10% of each bill would cost us. Preventative care (like physicals and gyn appointments) are covered 100% with just a copay, but if I just added up all office visits from last year, 10% of the total is well under $1000. Actually, it’s closer to $500. Therefore, we could save about $1,800 (minus increased copays) next year.
Stacie and I discussed the risk involved in not having 100% coverage against the out-of-pocket costs and decided the savings were well worth it. Basically, we would both have to hit our out-of-pocket maximums, plus $300 ADDITIONAL copay costs in order to match the premium costs of the premier plan.
However, one thing with paying the out-of-pocket vs paying higher premiums is that the premiums are pretax. However, we have a plan to get those pretax benefits…
Flexible Spending Account
I won’t get into an explanation of Flexible Spending Accounts (FSA), but basically it’s money you put into a pretax spending account that’s meant to be used on copays, deductibles, coinsurance, dental, glasses, contacts, lasik, medicines, etc. (mostly anything medical). Since we know we’ll probably spend at least $500 next year due to the deductibles, plus a few hundred on copays, etc., we decided to put $1,000 on an FSA to use pretax dollars towards our out-of-pocket costs. However, FSA money is “use it or lose it”, so we need to make sure we don’t lose it.
Dental and Vision
I won’t go into great detail about these plans. We decided to drop down to the standard dental plan vs premier plan because we generally only need the preventative care (cleanings). Fillings would be covered 80%, but we’ve (I’ve) had less and less of those lately. The savings between dental plans would be about $120 per year.
We only have one option for vision. Since I may want to get new glasses next year (I’m not happy with mine), and Stacie wears contacts, we’ll use enough of the discounts to pay for the premiums. Also, the vision plan premiums went down for next year.
Life and AD&D Insurance
I won’t say how much insurance I bought for myself and Stacie, but I did increase the amounts for life and accidental death & dismemberment (AD&D). Costs for this insurance are so low for the benefits that I don’t want to pass it up. Also, my employer offers a good bit of standard coverage anyway (no charge).
One last benefit we get from each of our employers is an “opt-out” payment if we choose not to use their insurance plan, but can prove we’re still covered. Since we’re not using Stacie’s insurance, she’ll get an extra $40 in her paycheck each month. Since our history is to go see a doctor about once every month for regular or irregular appointments, that will cover 1-2 copays (depending on if it’s a general or specialist doctor). We also had this benefit last year, so it’s nothing new.
Unless all heck breaks loose next year, we’ll definitely save money by switching to the standard plans. Each year this process seems to get more difficult, and of course more expensive. Also, now that we’ll be paying for part of our actual costs, we’ll be more diligent at reviewing the charges each month and trying to ensure we’re not being overcharged. And that’s why the 100% “premier plan” is more expensive. The insurance company knows that if you don’t pay any of your own money towards the bill, you’re less willing to review the bills and more willing to get unnecessary treatments and tests.
Switching to the new plan will be more hassle for us because we’ll need to pay the bills, then get reimbursed. However, I looked at the old bills and 10% of each bill is about $20-50 max. I think we can handle those payments.
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