Want to save hundreds of dollars next year? Well, there's an easy way to do so. It just requires paying attention and doing a few easy tasks during open enrollment, the short window of time (sometimes no longer than two weeks) around this time of year when many employers let employees make changes to their insurance policies.
For the most part, you can't change your health care choices at any point during the year, unless you've had a major life change like getting married or having a baby. That's why it's time to act now—if you want to pocket a few extra Benjamins next calendar year.
Know the Deadlines
Call your HR representative to find out exactly when your open enrollment period begins and ends. If you miss this window, you'll end up with the same medical, dental, vision and life insurance coverage as the year before, but you won’t be able to make changes to your accounts or sign up for a flexible spending account, for which you need to re-enroll each year. (More on that below.)
Find Out Your Options
Make sure you understand your options. Read our Health Insurance 101, which covers all the lingo you need to know. Also, learn about how the Affordable Care Act, nicknamed "Obamacare," will affect all Americans and how it will affect women in particular. According to The New York Times, the ACA now requires health plans to offer you a simple-language “Summary of Benefits and Coverage” form that will make it easy for you to compare your options. Some of them, such as this example by Consumers Union, may even tell you how much big events like having a baby will cost you.
Choose a Plan
Then, look at your own situation. Are you single and generally healthy? Or do you have kids to take care of or recurring medical issues?
- If you think you'll only need a checkup, it might make sense for you to go for a plan offering low premiums but higher co-payments.
- If you have kids, you might want to choose higher premiums but lower co-pays.
- If you’re married, compare your spouse’s insurance plan against yours to see which one will suit you both better using this guide.
You can find out here if a high-deductible plan makes sense for you, and our checklist on signing up for health insurance goes over what questions you should ask yourself and what considerations you should keep in mind. Additionally, most health care providers have online tools and calculators to help you compare different plans and crunch last year's numbers to see if you would have spent more or less with Plan A or B. Whatever your decision, your new choices will usually become effective on January 1.
Sign Up for a Health Savings Account
Yet another way to save money on your health care expenses is through health savings accounts (HSAs) or flexible spending accounts (FSAs). For both of these, you contribute money from your paycheck to an account that you can use for eligible heath care expenses. Your contributions are made pre-tax, which saves you money.
- HSAs are health savings accounts for people enrolled in high-deductible health plans, and what you don’t use in a given year will carry over to the next plan year. You can even take your HSA with you when you change jobs.
- FSAs can be used for medical expenses and even dependent care (like child care costs), and they are common even on traditional plans, while HSAs are unique to high-deductible plans. Note that, unlike money in an HSA, money in an FSA does expire at the end of the year if you don't use it, so you should plan carefully.
Open enrollment is the time to decide how much to contribute to your HSA or FSA, so make sure now to calculate how much you'll be spending next year. If you've never had an HSA before, some of the more common eligible expenses include:
- many dental services including braces and X-rays
- glasses and contact lenses
- birth control pills by prescription, prenatal care, and gynecologist and obstetrician visits
- psychology, psychotherapy and psychiatry treatment
- vaccines and prescription medication
- acupuncture, chiropractor services
(And there's more! Here's a complete list of eligible expenses.) If you already have an HSA, see if you have leftover money from last year and take that into account when determining your contribution this year. If you fell short last year with either your HSA or your FSA, increase your limit if you're expecting similar expenses this year. To find out more about how to use last year's experience to make better choices this year, read here.
Maximize Your Benefits
Ask your HR rep about ways, besides HSAs and FSAs, that you can boost your bottom line through your health expenses.
- Health insurance companies have an incentive to keep you healthy, so many of them will offer reimbursements for your fitness expenses (like by paying part of your gym membership).
- Ditto for alternative forms of health care such as massage, acupuncture or chiropractor services.
- Some insurance companies offer a cash stipend for filling out a survey about the general state of your health, called a “health risk assessment.”
- Others also offer employee assistance programs that help you do everything from balancing work and family to finding daycare for your kids.
Negotiate Outstanding Bills
Take this opportunity, while you're thinking about your health care costs, to negotiate any outstanding large medical bills, such as those more than $250. Alternatively, you can hire a service to do your negotiating for you, such as Medical Cost Advocate.
Get started with a free financial assessment.
Get started with a free financial assessment.
If you have large, complicated or ongoing health care costs, you can also hire a company such as MedClaims Liaison to follow up with insurance issues or incorrectly processed claims. According to a representative, the average MCL user with an annual subscription gets back $10,000 from claims negotiations and reimbursements. As you can see, you need to be spending a lot on health care in order to make this service worth it.
Save yourself the time and hassle of dealing with paperwork by storing your health insurance records online with a service such as Simplee, a website that lets you link your health plans so you can see your total spending, deductible status and FSA or HSA balances in one place. It’ll also alert you to any bills you need to pay or miscalculations in your paperwork, like if you were charged twice for the same service. And it’s free. Once you’ve linked your accounts, make sure you can access all of your statements. Then, consider shredding old records to reduce clutter. (Learn the best ways to go paperless.)
Once you’ve made your choices for the year, review your confirmation statement from your company and then make sure to save any new ID cards you get in the mail. Once all that is over, go do something fun to celebrate the fact that you won't be wasting hundreds of dollars on unnecessary health care expenses next year.