You’re slathering on the sunscreen, you’re getting in lots of outdoor exercise, and you’re packing your meals with lots of fresh summer fruits and veggies.
But are you on track with all of your other health stuff?
From re-evaluating your insurance coverage to finally scheduling all of those doctor visits you’ve been putting off, summer can be a great time to give your health care regimen a bit of a checkup.
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Get started with a free financial assessment.
Americans spend more than $9,000 per person each year on health care needs, so why not take advantage of the lazy days of summer to do a midyear reality check, to see if there are savings opportunities you might be missing out on?
That’s what we thought, which is why we talked to an employee benefits expert, a financial planner and a patient advocate to get the skinny on the moves you can make this summer to get the most bang for your health care bucks.
To-Do #1: Take a Hard Look at Your Health Coverage
We’re all guilty of it, but this year, don’t wait until the week before your company’s open-enrollment period ends to decide on the plan you’ll be using for the next year.
According to benefits expert Peter Vincent, vice president of human resources at the National Audubon Society, it pays to get ahead of the game.
Before the summer comes to an end, Vincent suggests calculating everything you’ve spent on health care for the year, including premiums, co-pays and deductibles.
“Right now, you have a record of about 50% of expenditure for the year, so you can just double it and get a sense of what the annual cost is,” Vincent says.
Then when open-enrollment season rolls around, you’re working with real numbers—or at least a pretty strong estimate—and it will be much easier to compare options and make a good decision for you and your family.
Don’t Miss Out Tip: One area to pay particular attention to is prescription medication costs. “People often don’t add up what medications they’ve used during the year, and don’t plan for what they’ll need next year,” says Michelle Katz, a health care consumer advocate and author of “Healthcare Made Easy.”
In the lead-up to open enrollment, this to-do is especially important because not all plans cover expensive medications—which can put a serious dent in your out-of-pocket budget. According to the Milliman Medical Index, prescription medication costs spiked almost 14% from 2014 to 2015.
Katz also suggests calling your doctor’s office during summer downtime to ask if they are looking to change their insurance contracts for the next year, because you can’t assume all plans will cover the same physicians and hospitals.
“But if you start researching now,” she says, “you won’t panic when it comes time to choose [a plan during open enrollment].”
To-Do #2: Do Your FSA and HSA Math
Many companies offer employees programs for setting aside pre-tax dollars to be used for health care expenses.
Details vary by plan, but these accounts generally allow you to use this pre-tax money to cover co-pays, deductibles and other out-of-pocket health care expenses.
This helps lower your taxable income, and you don’t pay taxes when you withdraw it for eligible expenses, so your money goes further.
If you have a flexible spending account (FSA), check out how much of it you’ve used to date. “If you see you’ve already used it up by midyear,” notes Vincent, “then you can opt to increase the total for next year.”
RELATED: Long-Term Care Insurance 101
If you don’t have an FSA, but your company offers it, Vincent recommends signing up for the next year. “People worry about FSAs because of the use-it-or-lose-it component,” he says. "Now you can roll over some portion of it for next year but you know you’re going to spend something, so if you’re worried, be conservative. Don’t let that element discourage you from taking advantage of it.”
If you’re enrolled in a health savings account (HSA)—which are typically used with high deductible insurance plans—you don’t need to worry about using it all by the end of the year because funds in this type of account typically roll over automatically. And it’s portable, like an IRA—it can go with you from one job to the next.
That said, you should still run the numbers on what you’ve spent to date, so you can better assess what you’ll need to contribute for the next year.
Don’t Miss Out Tip: Rules vary by plan, but there are a lot of things you may be able to use your FSA for that you may not know, like prescription sunglasses, genetic testing, blood pressure monitors and even, in some cases, Band-Aids. There are specific rules so check with your benefits administrator for details.
With elective procedures ranging anywhere from $650 for teeth whitening to more than $12,000 for IVF treatments, there are all sorts of cash drains you need to factor into your budget.
To-Do #3: Run the Numbers on Deductible Expenses
If you’ve had significant medical expenses in the first half of the year, now is the time to gather those receipts and do some math to see if you will be able to deduct those bills from your taxes.
According to the IRS, medical costs must exceed 10% of your adjusted gross income to be deductible.
Don’t Miss Out Tip: If you’ve hit the deduction threshold, you can write off all kinds of things you may not realize, including health care-related transportation costs (taxi, bus, train, your own car), reading or prescription glasses or contact lenses, and even the cost of participating in a smoking-cessation program.
Just be sure to talk to your accountant to find out if these kinds of deductions make sense for you. And this IRS fact sheet can help you determine if specific expenses are eligible.
To-Do #4: Start Saving for Planned Medical Costs
While some budget-busting medical expenditures can result from an unexpected illness or injury, many procedures can be planned out well in advance.
According to Laura Knolle, MS, a Certified Financial Planner™ (CFP®) with Ballou Plum Wealth Advisors, LLC, in Lafayette, Calif., if you’ve got a large medical expense coming up this fall or winter, you should start socking away money for it now.
With elective procedures ranging anywhere from $650 for teeth whitening to more than $12,000 for in vitro fertilization treatments, there are all sorts of cash drains you need to factor into your budget.
Don’t Miss Out Tip: Talk to your financial professional about any planned medical costs, says Knolle. “If they know you’re going to need extra money later in the year, and see an opportune time to rebalance your account, they can act on it,” she adds.
To-Do #5: Schedule Straggler M.D. Visits
Now’s the time to get as many appointments on the books as you can, especially since it can take weeks to see certain specialists—such as your dermatologist for that yearly mole check.
Not only is it critical for your health, but if you’ve already met your deductible, you’ll be getting ahead financially by wrapping up the rest of your doctor visits during the same calendar year.
And if you have vision coverage, remember to check if you’re eligible for new eyeglasses—most plans cover them every two years.
You should also make sure to pay yourself back. “Tap your flexible spending account first, then your HSA, if you have one, to reimburse yourself for out-of-pocket expenses,” Knolle says.
Don’t Miss Out Tip: Do a deep dive into all of the health-related benefits your company’s plan offers, because you could be missing out on coverage for things like gym memberships, acupuncture for weight loss and other services that may not be on your radar.
“Your employer has a vested interest in you staying healthy. Why not take advantage of great benefits, like a gym membership or wellness programs?” Vincent says. “You’ll feel better, stay healthier and be more energized. Repeated studies have shown that even small amounts of exercise pay off in the long run.”
To-Do #6: Create a Personal Health Info Cheat Sheet
Make life easier on everyone by creating a document or file where your family can find important health care information, suggests Knolle.
This will not only give you easy access to your details when you’re filling out medical forms but also come in handy during an emergency.
What to include:
- Contact info for all of your doctors
- A list of insurance policies and policy numbers, as well as copies of ID cards
- Info on FSA/HSA accounts
- Living will/advance health care directives
- Any allergies people should know about
- A list of medications you take
“We always advise clients who have kids over 18 to put a health care directive in place for them. They’re adults now, and legally, parents can’t be called on to make decisions regarding their health care.”
Don’t Miss Out Tip: Creating this cheat sheet is especially helpful for single people, since family and friends won’t necessarily have easy access to medical details.
Give a copy of your cheat sheet to someone you trust, so there won’t be any delays in getting the help you need should something unexpected happen to you.
To-Do #7: Draft a Living Will
If you have your advance health care directives or living wills in order and up to date—kudos to you!
But if, like many people, you haven’t done this yet, set up an appointment with an estate attorney or planner to help make sure your health care wishes are recorded.
In addition to a will and a power of attorney, typical estate plans include an advance health care directive (or a living will, depending on where you live) and trusts.
You should have these in place for yourself, your spouse and in some cases even your children.
Knolle also recommends making sure that the beneficiary designations on your retirement accounts, insurance and annuity contracts are current—and that you have a contingent beneficiary listed for each document.
If something should happen to you and there’s no designated beneficiary, any of these account assets could be distributed however the state dictates.
“A spouse could have to jump through a lot of hoops to get the assets,” Knolle explains, adding that this is why she advises clients to work with an estate-planning attorney on how to list beneficiaries on all types of accounts.
Don’t Miss Out Tip: “We always advise clients who have kids over 18 to put a health care directive in place for them,” Knolle says. “They’re adults now, and legally, parents can’t be called on to make decisions regarding their health care unless a directive exists.”
So consider checking this to-do off your list this summer—especially if you have a teen who’s 18 and heading off to college this fall. Now about those college costs ...
LearnVest Planning Services is a registered investment adviser and subsidiary of LearnVest, Inc., that provides financial plans for its clients. Information shown is for illustrative purposes only and is not intended as investment, legal or tax planning advice. Please consult a financial adviser, attorney or tax specialist for advice specific to your financial situation. LearnVest Planning Services and any third parties listed, linked to or otherwise appearing in this message are separate and unaffiliated and are not responsible for each other’s products, services or policies.