Health Insurance Basics - Saving Money
Many people, including some insurance agents, think health insurance is confusing. There are deductibles, co-pays, co-insurance, in-network/out-of-network, maximum out-of-pocket and Rx coverage. Where does it begin and end? All of them are good questions to ask. Knowing the answer could saving you hundreds, if not thousands, of dollars.
Everyday families are surprised at claim time. This is the worst time to find out how your policy works. Knowing how it works, will allow you to control what you are spending. This is not just for premium dollars on a monthly basis, but also what you spend out-of-pocket at claim time.
Some employees miss the boat on the true out-of-pocket amount. There is a deductible, most people are used to this. They do tend to forget that nowadays there is 'coinsurance'. It is cost sharing with the insurance company after the deductible has been met.
I would sometimes call this "The Hidden Deductible". People have a tendency to forget about the co-insurance and the insurance company is supposed to pay 100% after their deductible. This will be a nice surprise at claim time. Most likely you get this practice from your auto/homeowners insurance. When selecting a health plan, they need to take this in consideration. There are several options that may be available.
Sometimes benefits come down to a math problem. There are situations that make sense, financially, to go with a higher deductible. Especially if history repeats itself and you don't have much claims over a wellness exam and maybe a cold you cannot shake. Financially, especially for a family, you could offset the cost of a higher deductible within 18-24 months. It is a risk of the unknown, but so is driving to work. If we only had a crystal ball to view...
With escalating cost, it may make more financial sense to insure yourself with the employer and take the spouse and kids and buy a separate policy. Healthcare.gov is only there for tax credits, with a quoting portal on the backend. If an employer offers coverage to the family as a whole, they are ineligible for the tax credit.
You may still save premium for similar plan on your own through an insurance broker. The employee only rate could be really inexpensive and unable to beat anywhere else. Shopping plans with an insurance agent, may help you understand your policy better and to see if your dollars are better spent on a pre-tax basis with the employer coverage or purchasing after-tax dollars. It's a math problem, not necessarily a benefits problem.
These are just a few things you can look for when reviewing your health insurance on an annual basis. The action steps you did in the past have changed and you have to review it harder. It will end up saving you money.
Arthur "Butch" Zemar is a 2014 Broker of the Year Finalist, an insurance specialist, author and President at Elite Benefits of America. Butch Zemar is actively developing informative resources, such as articles and videos that deliver vital information on healthcare reform and employer options. Elite Benefits of America has consultative packages for employers, as well as insurance solutions, to keep employers compliant with healthcare reform and keep skyrocketing premiums under control.
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