How to Choose the Best Health Plan
Last week's column on health insurance, which mentioned the start of the "open enrollment" period for corporate health plans, generated a few questions. In fact, many employees spend only a few minutes reviewing their options, and this year-end task gets relegated to the bottom of the "to-do" list. That could be an expensive mistake.
So this week's column offers some resources for those who would like to make informed decisions about their employer's health plan alternatives, but simply don't know where to start.
It's worth spending the time to understand your options, because the company may have added new choices, including a Health Savings Account. Or your plan may have switched PPO (Preferred Provider) options, eliminating your favorite physician from the list. Or your own personal and family health needs may have changed wotj age or the birth of a child, so that a different portion of the company's healthcare plan might be better suited to your needs.
Your choices may include:
- HMO: On the plus side, Health Maintenance Organization costs are low, with one fixed, monthly pemium and either no payment, or a nominal one, required for office visits. On the minus side, you will be limited in your choice of physicians and specialists. And the HMO must authorize diagnostic tests.
- PPO: With a preferred provider organization, you'll have your choice of a wide range of physicians in the plan - and may be able to choose a provider outside of the plan, if you pay for a substantial portion of the cost. You may be required to pay larger out-of-pocket expenses for copayments and diagnostic tests, since a PPO not only negotiates discounts with its providers, but likely requires pre-certification for these tests
- HSA With a health savings account, you set aside money on a pretax basis to pay for healthcare expenses throughout the year. If you don't spend the money, you get to roll it forward on a tax-deferred basis, to help with future medical expenses. The plan likely gives you a wide choice of providers, counting on your willingness to choose the most cost-effective course of treatment.
- Choice of physicians, hospitals and other providers
- Cost of premiums, copayments, and "out of pocket" expenses
- Coverage for prescription drugs
- Wellness program coverage
- Tax advantages
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