Health insurance is complicated! Even if you are fortunate enough to have employer-sponsored coverage, choosing a health plan at work that will meet your family's needs for the next year can be confusing.
As Arizona health insurance brokers with decades of experience helping employers and employees find the best options, we understand!
To that end, consider these five things when you choose your health plan for next year.
Know What the Numbers Mean
When choosing a health plan at work, you need to look at four numbers:
- Monthly Premium - The cost you will pay each month for coverage. Your employer may partially or fully cover your premium each month.
- Co-Pay Amounts - These are the amounts you will pay when you visit the doctor, urgent care, emergency room, or specialists.
- Yearly Deductible - The amount you are responsible for before insurance starts to pay claims. This amount does not include preventative care, such as annual physical exams, normally covered by your health insurance plan at 100%. The amount of your deductible
- Maximum Out-of-Pocket Costs - This is the maximum amount you will have to pay in the calendar year. Many employer-sponsored health insurance plans have both individual and family maximums.
Of course, you should always look at how the new plan compares to last year's plan. And if you have questions, ask for help to understand the health insurance benefits your company offers (more about that below).
However, this year's plan might look different from last year's, with significant changes in annual deductibles and maximum out-of-pocket costs.
Understand Your Current Needs and Past Use
Unfortunately, no one can see the future when choosing a health plan at work. The best way to make this choice is to take your current needs and your past medical and financial history into account. For instance, are you a healthy young person with few health concerns? Then it may be best to go with a high-deductible plan and put money away in an HSA plan.
Are you expecting to have minor (or major) surgery next year? You might want a plan with more coverage for hospital stays and follow-up visits.
One of the best ways to understand your coverage needs is to look at what you spent last year. Did you run through the HSA funds too quickly? Then maybe this year you should contribute more.
Did you find that a PPO with a higher premium but lower co-pays was more cost-effective for your family? Then keeping this type of plan may be the best choice.
On the other hand, if you don't go to the doctor very often and don't use many prescriptions, choose the plan with the least expensive monthly premiums.
When your employer works with an independent group health insurance broker, many factors go into selecting the plan that best fits not only the financial needs of the organization but also captures the needs of the majority of employees. What does that mean for you as an employee? Simply that the selections presented to you may change from year to year.
In addition, as your life circumstances change, so do your health insurance needs. Marriage, pregnancy, divorce, and other life events can greatly impact what type of insurance policy is right for you. In general, you should choose the policy that gives you the right amount of coverage to meet your current lifestyle needs.
Most Arizona employers offer four types of plans: Preferred Provider (PPO), Exclusive Provider (EPO), Health Maintenance Organizations (HMOs.), and Point of Service (POS). Here is a quick comparison of these four types of health insurance plans:
PPO plans offer participants a vast network of providers - doctors, clinics, hospitals and other healthcare options - to choose from. If you choose to see a provider outside the defined network, you may do so but will incur higher out-of-pocket costs. Because of the vast network of providers, premium costs for these types of plans is generally higher than other plans.
Like PPOs, EPOs operate with a network of participating providers for care. The difference is that most EPO plans do not provide coverage options if you go out-of-network for care, with emergencies being the general exception to this rule. This means that the total cost for services from an out-of-network provider will be your responsibility to pay. The cost of these plans is typically less than PPO plans.
With HMOs, you must choose a Primary Care Provider (PCP) from their list of currently participating providers. Your PCP then acts as the hub of your healthcare, coordinating complete health care and referrals to specialists. HMO plan costs are generally lower than other health plans, as long as you remain in-network for care.
A POS plan essentially merges PPOs and HMOs into one. Like a PPO, there is a participating provider network that you must seek care from (although the network is generally smaller than a PPO). And like an HMO, you must select a PCP from their network who will coordinate your care. Because these plans combine the features of PPOs and HMOs, you can expect the costs to fall between the two.
The latest addition to many health insurance plans is the HDHP or High-Deductible Health Plan. Inexpensive monthly premiums make this an attractive option when choosing a health plan at work. A health savings account allows employees to accumulate tax-free dollars to pay for pre-deductible expenses. Take the time to read through the summary of benefits pages to make a fair comparison between plans.
This might sound like a no-brainer, but you can save a lot of money on healthcare costs by practicing healthy habits. Why not try to save some money this year on healthcare by taking better care of yourself? Join your company's efforts to prioritize employee wellness, exercise regularly, watch your diet, don't smoke and drink less alcohol. The fewer unhealthy habits you maintain, the lower your healthcare expenses will be, and the easier you will find choosing a health plan at work.
Get Expert Advice
Stop "guessing" when choosing a health plan at work. Find a trusted adviser in your HR department or call the insurance companies directly. Or better yet, speak to the Arizona group health insurance broker who helped your employer select the very options you are deciding between. These experts will happily explain the differences between plan options, interpret confusing healthcare industry jargon, and help you select the best plan for the following year.