It’s that time of year again, the time where people blindly choose what kind of health coverage they are going to have for the next year.
Most people stick with the same plan as the year before, but that may not be the best option for you. Here are some tips and tricks I’ve learned throughout my 5 years of working for health insurance.
Option A: The lower-priced plan is most likely going to have a higher deductible you need to meet before your health insurance pays anything extra.
Option B: The higher-priced plan will most likely have a smaller deductible then the cheaper plan. This is where understanding your plan, and what kind of situation medically you’re in.
If any of those questions is yes, you may want to get the higher priced deductible plan (Option B). If you’re never sick and are healthy overall you may want to save some money and get the cheaper plan (Option A). Just know what you’re getting yourself into.
With option A you're going to be paying for the ultrasounds which will be let's say $100 per ultrasound. When it's time for the baby you're going to have about $2000 left towards your deductible assuming they do a ultrasound every month plus an additional one closer to the birth date. Then for the birth you will most likely have to pay the remaining of the deductible ($2000) plus 20% of whatever is left over.
let's use the same example as option A but for option B. The ultrasounds cost $1.000 so you have $500 remaining towards the deductible and then you need to pay for the birth which would be the remaining of the deductible and nothing else because the benefit is no cost after the deductible is met.
Basically for FSA, money comes out of your check each pay cycle to pay for whatever the amount you choose. Sometimes this works great with the higher deductible plan because your deductible could be 3000 and you could get your FSA for 2500 so you only have to pay “out of pocket” 500.
For HRA, Sometimes your company contributes towards it. Which saves you money towards your deductible or copay without taking money out of your check.
My work just added a dependent saving account which is similar to an FSA but you get to use it towards daycare which we’re pumped about! We put 5000 on it and I’ll be getting $150 out of my check which hurts. But you have to keep in mind you won’t be paying what you normally pay for daycare which for us is about $250 a week. So we’re saving money each week until it runs out.
I hope my tips helped you to choose the right plan for next year! I could write forever about health insurance but these three key factors will help you out a lot! If you have any more tips I didn’t list tweet me @ditchindebt I’d love to hear them!
Most people stick with the same plan as the year before, but that may not be the best option for you. Here are some tips and tricks I’ve learned throughout my 5 years of working for health insurance.
Price
Price is a big factor in what plan you are choosing. Your work will probably offer one or two plans to choose from. So if you have two plans one is going to be cheaper than the other (hopefully).Option A: The lower-priced plan is most likely going to have a higher deductible you need to meet before your health insurance pays anything extra.
Option B: The higher-priced plan will most likely have a smaller deductible then the cheaper plan. This is where understanding your plan, and what kind of situation medically you’re in.
Understanding the plans
My rule of thumb when choosing a plan is to think about next year.
Are you sick often?
Are you trying to get pregnant?
Do you have a major sugary coming up?
If any of those questions is yes, you may want to get the higher priced deductible plan (Option B). If you’re never sick and are healthy overall you may want to save some money and get the cheaper plan (Option A). Just know what you’re getting yourself into.
Here is an example of what i'm talking about:
Let's say your wife is pregnant, congratulations!
Option A's deductible is $3,000 with 20% coinsurance after you meet the deductible and Option B's deductible is $1,500 with no cost after you meet your deductible.
With option A you're going to be paying for the ultrasounds which will be let's say $100 per ultrasound. When it's time for the baby you're going to have about $2000 left towards your deductible assuming they do a ultrasound every month plus an additional one closer to the birth date. Then for the birth you will most likely have to pay the remaining of the deductible ($2000) plus 20% of whatever is left over.let's use the same example as option A but for option B. The ultrasounds cost $1.000 so you have $500 remaining towards the deductible and then you need to pay for the birth which would be the remaining of the deductible and nothing else because the benefit is no cost after the deductible is met.
Now, the price per pay check will be more for option B then option A but in this example seems to be worth dishing out over 3,000 in a year.
Personal Spending Accounts
Normally your options for PSA's are either an HRA or an FSA.Basically for FSA, money comes out of your check each pay cycle to pay for whatever the amount you choose. Sometimes this works great with the higher deductible plan because your deductible could be 3000 and you could get your FSA for 2500 so you only have to pay “out of pocket” 500.
For HRA, Sometimes your company contributes towards it. Which saves you money towards your deductible or copay without taking money out of your check.
My work just added a dependent saving account which is similar to an FSA but you get to use it towards daycare which we’re pumped about! We put 5000 on it and I’ll be getting $150 out of my check which hurts. But you have to keep in mind you won’t be paying what you normally pay for daycare which for us is about $250 a week. So we’re saving money each week until it runs out.
I hope my tips helped you to choose the right plan for next year! I could write forever about health insurance but these three key factors will help you out a lot! If you have any more tips I didn’t list tweet me @ditchindebt I’d love to hear them!
Comments
Post a Comment