These so-called group plans are the most affordable form of health care insurance available. That’s because the policies are priced for larger groups that are a meaningful mix of young and old healthy and not so healthy people.
Employer sponsored group health plans are made even more affordable by their favorable tax treatment.
The payments we make for our share of the cost are pretax which means that their values deducted from salary for all of the federal state local Social Security and Medicare taxes are calculated.
But this notwithstanding there are still a number of choices to be made. Each and every year when your employer is conducting what’s called the enrollment season for the coming year in particular focus on these four things.
Number one what’s covered your wellness exams the co-pays for office visits and prescriptions the deductibles for emergency care and surgeries all of the services that are part and parcel of the health care plan that’s being offered.
Number two how much is covered. Different plans have different levels of coverage including annual and lifetime caps maximum out-of-pocket costs and whether they vary of for in or out of network care.
Number three what’s included in particular the policy if there is any governing preexisting conditions alternative and complimentary medicine elective treatments and surgeries.
And number four what are the plan choices. Focus on the different plan structures including those with varying levels of deductibility which I’ll talk about in a moment versus in and out of network care.
Any group plans distinguish between the two additional coverages such as vision and life insurance and evaluate the costs for each in terms of premiums deductibles co-payments taking different scenarios into account.
So for example a plan with a very high deductible will charge a lower monthly premium.
That’s great as long as you’re healthy. That’s why it makes sense to look at the whole picture.
Monthly payments savings versus the higher deductible limit. If you really get sick. Speaking of high deductible plans which have been growing in popularity especially for folks your age.
Be sure to couple them with a health savings plan or an H S H that says were authorized in 2003 under the Medicare prescription drug improvement and Modernization Act.
They’re restricted to consumers with high deductible health plan coverage called Age DHP as they’re defined by the rest and they enjoy a favorable tax benefits in particular.
Neither the money that you will elect to deposit into an HSA account nor the income that it earns is subject to taxation provided the funds are used for qualified health related purposes also defined by the IRS.
So for example while the money in the account can be used for office visit co-pays using the funds to buy a bottle of shampoo at CBS would be viewed as an early withdrawal subject to taxes and penalties.
That is until you turn 65 at which time you may use your savings for anything you want. Subject only to regular income tax the IRS also limits the amount of money that you can designate for deposit into an HSA account each year the 2012 is thirty one hundred dollars for individuals and six thousand to 50 for families.
There are a couple more things to know about HSA.
You control the investment strategy for the money you contribute to your HSA account. That means that you can choose short term investments or savings as you’re building your account. And longer term strategies Once you’ve established a critical mass you also only account which means that should you switch jobs at some point and sign up for another HD HP with your new employer.
You’ll be able to link your existing HSA accounts to your new payroll to continue the contributions. Now before I leave the topic of health care insurance there’s one more thing to talk about.
Denials of coverage from time to time. The claims should submit for coverage of reimbursement will be denied for one reason or another.
My advice is to appeal it to death especially if you believe you deserve to be covered. And also because all of these $50 and $100 denials add up.
After all it’s your money.