Open enrollment season has begun and many people thought their healthcare insurance costs would be going down with healthcare reform and the reality could not be any more different -

1. Most rate increases were put into place before healthcare reform meaning costs were going up already (without healthcare reform)

2. The average family increase in costs will be about 14% or 4,000 per year

a. The actual costs to the employer for a typical family plan is ranges from 10,000 to 12,000

3. The actual increase in cost is closer to 3% but employers, as they have done  over the past few years are using this as an opportunity to shift costs onto the employees with:

a. High contributions towards premiums

b. Higher Co-insurance amounts – that’s the portion of the bill the individual pays on the claim

c. Higher deductibles (the portion the employee pays before any insurance benefits kick in)

4. What should employees do?

a. Pay Attention:  choose the right plan for your family

b. PPO’s are insurance plans that allow you to go out of network but usually with higher costs than HMOs that restrict your coverage to only in network doctors

i.    Premiums for HMO’s and PPOs are frequently the same cost to the employees but if you are willing to give up on going out of network, you will save money as most HMO plans do not have co-insurance or deductibles – you just HAVE TO STAY IN NETWORK as you will have no insurance out of network.  People are still scared of the old days when HMOS had very bad reputations – these products have improved significantly

1.    make sure your doctor and hospital in the HMO network
2.    Be prepared to follow the rules
3.    Make sure the formulary includes the prescription drugs you take

ii.    If seeing a doctor out of network is important (or knowing you have the options), make sure you understand your potential costs – deductibles, co-pays, co-insurance – grab a calculator and try and remember how many times you went to the doctor the previous year – you can add up what it will cost you under your PPO plan and you can compare that to the HMO cost – remember, it’s a gamble as most people cannot predict what will happen to their health year to year

c. Younger people may want to consider a high deductible plan (if it’s available)  - these plans are much less expensive but if you get sick, you will be responsible for the full costs up to the deducible amount – most high deductible plans come with an HSA which allows you to put money away tax free as savings in case you get sick – the money you spend is tax free ($6,150 is the maximum you can save this year for a family)

5. If your employer offers any programs to stay healthy or preventative care, sign up and take advantage, there can be big savings on your healthcare premiums but more importantly, it’s good for your health

6. Many employers offer flexible spending accounts – these are another tax free way to put money away towards your healthcare but unlike HSA’s, if you do not spend all your money in a year, you lose it  - this year there are new rules in place and you cannot use it to buy over the counter drugs anymore – plan ahead so you do not forfeit unspent money

7. Go generic with your prescription drugs and when choosing a plan, make sure the drugs you take are in the formulary

8. You an negotiate your healthcare with doctors but there are many rules on what the doctor can do – so make sure you know the rules that apply – the doctor has unlimited flexibility to negotiate when the services are not covered by the insurance company or if you are seeing a doctor and have no coverage

Visit the Andrew's Blog link at the top of the page for more information and useful tips.

Open enrollment season has begun and many people thought their healthcare insurance costs would be going down with healthcare reform and the reality could not be any more different -

1. Most rate increases were put into place before healthcare reform meaning costs were going up already (without healthcare reform)

2. The average family increase in costs will be about 14% or 4,000 per year

a. The actual costs to the employer for a typical family plan is ranges from 10,000 to 12,000

3. The actual increase in cost is closer to 3% but employers, as they have done  over the past few years are using this as an opportunity to shift costs onto the employees with:

a. High contributions towards premiums

b. Higher Co-insurance amounts – that’s the portion of the bill the individual pays on the claim

c. Higher deductibles (the portion the employee pays before any insurance benefits kick in)

4. What should employees do?

a. Pay Attention:  choose the right plan for your family

b. PPO’s are insurance plans that allow you to go out of network but usually with higher costs than HMOs that restrict your coverage to only in network doctors

i.    Premiums for HMO’s and PPOs are frequently the same cost to the employees but if you are willing to give up on going out of network, you will save money as most HMO plans do not have co-insurance or deductibles – you just HAVE TO STAY IN NETWORK as you will have no insurance out of network.  People are still scared of the old days when HMOS had very bad reputations – these products have improved significantly

1.    make sure your doctor and hospital in the HMO network
2.    Be prepared to follow the rules
3.    Make sure the formulary includes the prescription drugs you take

ii.    If seeing a doctor out of network is important (or knowing you have the options), make sure you understand your potential costs – deductibles, co-pays, co-insurance – grab a calculator and try and remember how many times you went to the doctor the previous year – you can add up what it will cost you under your PPO plan and you can compare that to the HMO cost – remember, it’s a gamble as most people cannot predict what will happen to their health year to year

c. Younger people may want to consider a high deductible plan (if it’s available)  - these plans are much less expensive but if you get sick, you will be responsible for the full costs up to the deducible amount – most high deductible plans come with an HSA which allows you to put money away tax free as savings in case you get sick – the money you spend is tax free ($6,150 is the maximum you can save this year for a family)

5. If your employer offers any programs to stay healthy or preventative care, sign up and take advantage, there can be big savings on your healthcare premiums but more importantly, it’s good for your health

6. Many employers offer flexible spending accounts – these are another tax free way to put money away towards your healthcare but unlike HSA’s, if you do not spend all your money in a year, you lose it  - this year there are new rules in place and you cannot use it to buy over the counter drugs anymore – plan ahead so you do not forfeit unspent money

7. Go generic with your prescription drugs and when choosing a plan, make sure the drugs you take are in the formulary

8. You an negotiate your healthcare with doctors but there are many rules on what the doctor can do – so make sure you know the rules that apply – the doctor has unlimited flexibility to negotiate when the services are not covered by the insurance company or if you are seeing a doctor and have no coverage

Visit the Andrew's Blog link at the top of the page for more information and useful tips.