Tips To Cope With Health Benefits ‘Open Season’ Decisions

October brings some scary sights: ghosts, goblins . . . and open enrollment packages.

Not that they’re related. Still, this month kicks off open enrollment season, when many of us dread the annual confrontation with our employer health benefits plan.

Typically during this time, you find that the costs of your health coverage will jump in the upcoming year. And just as typically, the information you are given about your choices is as simple to comprehend as quantum physics.

The good news, though, is that you are being offered health insurance. And during open enrollment, insurance companies are required to accept all applicants of the employer group, no matter what pre-existing health conditions are present.

But there may be some sticker shock on what your premium will be in January.

A recent Kaiser Family Foundation survey found that in 2011, the cost of employer-based family coverage rose 9 percent. Since 2001, premiums for family insurance have increased 113 percent, compared with 34 percent for workers’ wages and 27 percent for inflation, the survey found. (KHN is an editorially-independent program of the foundation.)

With wages generally flat, “health insurance is eating up more and more of people’s money,” says Nancy Metcalf, a health insurance expert for Consumer Reports.

Small businesses and their workers, in particular, wrestle annually with the rising costs of insurance.

Here are some tips — from experts such as Metcalf and from the National Association of Insurance Commissioners — for consumers who are making decisions on employer-sponsored health plans:

* If you have a choice of health plans, compare them on quality measures. Consumer Reports uses rankings from the National Committee for Quality Assurance to rank health plans’ quality by state, and you may want to consult its list. It’s currently free online, and available in the magazine. The rankings include customer satisfaction and performance on medical measures. Here’s a link.

* Check to see if your current physicians and hospital are in the network of the plan you’re considering. A good relationship with a primary-care physician “is really important,’’ Metcalf says.

* Understand the differences between a PPO (preferred provider organization) and an HMO (health maintenance organization). HMOs restrict your choice of doctor and other medical providers, but generally perform better on quality scores, Metcalf says.

* Read the plan materials thoroughly. Review any pre-existing condition exclusions and prior authorization requirements, NAIC says. 

* Check whether spouses or dependents are covered under your plan.

* Explore what a plan’s deductible really means. Co-pays and prescription drugs, for example, may or may not count toward meeting a deductible, depending on the health plan. Note that preventive care is free under employer plans that didn’t get ‘’grandfathered’’ status under health care reform.

* Make cost calculations based on your medical history. Calculate your health spending from recent years and try to estimate what your costs might be for the coming year. Don’t forget to include the cost of visits to the doctor, prescriptions and any procedures you may be planning. Also, make a list of the premiums, out-of-pocket expenses and benefits under each plan.

* You may be able to contribute pre-tax dollars to a flexible spending account (FSA), a health savings account (HSA), or a similar health reimbursement arrangement (HRA). An increasing number of Americans are enrolled in HSAs, which are paired with high-deductible plans. Metcalf says consumers should check to see whether their employer puts money into their savings account. “It’s kind of free money,’’ she says.

HSAs tend not to work as well for people with chronic medical conditions, Metcalf says. They generally work better for people who are younger, healthy, and “who have enough spare money to put into them,’’ she says. They can be used for co-pays, deductibles, co-insurance, and items such as hearing aids.

* Check to see whether your employer offers a wellness program or incentives for healthy behavior such as exercising regularly or not smoking.

* Find out what your plan’s annual out-of-pocket spending limit is, and what counts toward it, such as deductibles and co-pays.

* See whether your medications are on the list of approved drugs in each plan, NAIC says. Your co-pays on drugs can vary among health plans. “You need to look at that carefully,’’ Metcalf says. But don’t go without drug coverage, she says. 

The bottom line is that open enrollment is a confusing time for many consumers.

That’s partly because there’s currently no standardization among health plans, Metcalf says. “If you’ve seen one health plan, you’ve seen one health plan.’’

Take your time and make careful choices. You can always ask a health plan, your employer or the state insurance commissioner’s office to help clear up any confusion.

Related Topics

Cost and Quality Insurance