October 28, 2011

Health plan choices make you dizzy? Here's what to consider

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By Kristen Gerencher
MarketWatch

Many employers have just dropped a bunch of health-care options in their workers’ laps.

If you’re one of those workers, you may be tempted to automatically re-enroll in the same plan you have now — but that could cost you. Many plans are shifting costs and benefits, and some employers have introduced new ways for workers to save money, experts say.

“If an employee blows off open-enrollment communications, the employee could pay more because they’re missing incentives to pay less that are tied to participation in wellness activities,” says Eric Parmenter, vice president of consulting for High Roads, a benefit-consulting firm in Nashville.

For next year, employers generally aren’t as interested as they have been in recent years in raising workers’ premium contributions, but they’re finding other ways to pass on higher health-care costs, says Michael Thompson, a principal in human-resource services at PricewaterhouseCoopers in New York.

“There’s not as much focus on increasing premiums for workers as much as there is on increasing the amount of cost-sharing workers have at the point of service,” he says.

People who use their health plan might feel more of a squeeze than those who don’t, says John Asencio, senior vice president of Sibson Consulting, a human-resource-consulting firm in New York. “If you had a $15 copay, you’ll probably see those go up to $20, $25 for physician office visits,” he says.

Some questions to consider as you compare your 2012 options:

What’s new this year? As part of the health-reform law that kicks in more comprehensively in 2014, most employers already extend coverage to workers’ adult children up to age 26, even if they’re married or in school. And they have to offer free preventive care for a number of services, such as colonoscopies and mammograms. For 2012, many employers are offering what are called consumer-driven health plans, which have high deductibles and are often attached to savings accounts.

What would the plan cost me? If your plan is shifting to coinsurance, where you pay a percentage of the total instead of a flat fee, you may have to think differently. “If you had a $10 or $20 copay, it was easy to understand what it was going to cost you when you went to the doctor,” Thompson says. “If the plan now has coinsurance and a deductible, that visit may cost over $100 if you haven’t met your deductible.”

In making a total estimate of what a plan might cost you, start with the amount you contribute each month out of your paycheck. Next, look at your out-of-pocket costs. For this, consider your recent history of health services. If you see a doctor or need blood work frequently, for example, your copay or coinsurance amounts could make a big difference in your overall spending projections.

If you’re considering a health plan with a savings account such as an HSA (health savings account) factor in what your employer contributes to that account that may offset your costs. Your monthly premiums will likely be lower, but don’t forget unpredictable and intangible costs. Plus, are you OK with managing another financial account? Try to find out how many extra administrative tasks you’ll need to do to use the HSA funds.

What happens if I get really sick or injured? Try to run a worst-case health scenario under each of the plan options to see how financially exposed you would be among them should you or one of your covered dependents have a serious accident or illness.

Are my meds covered? If you’re on maintenance medication for a chronic illness, check to see if any plans will waive your copay or coinsurance on certain prescription drugs, making them effectively free to encourage you to keep taking them.

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