It never fails. The dreaded once a year email comes to all employees and is from Human Resources: “Open Enrollment is Here!” screams the subject line. You remember last year as you wearily tried to make sense of the never-ending choices between plans.
Health insurance doesn’t have to be a dirty word! Employers realize that these benefits are of great importance to employees and offer them at a very affordable rate. Presented below are essential concepts of plans and what it ultimately means to you.
One of the common mistakes many people at Medicare places make with the Medicare Supplements insurance is the belief that there is an annual open enrollment period. This is simply not the case.
Many seniors believe that there is an annual period, and this is just the only moment of a year that you can sign up for supplements or change your current plan. However, you can change plans at any time, when it happens to Medigap plans – there is no set enrollment period.
One of the main reasons many people are mistaken about this is just that there iS an annual enrollment period for Medicare Part D (prescription coverage) and Medicare Part C (Medicare Advantage), which people often mistakenly refer to as the Medicare supplement. Also, it is just not a Medicare Supplement plan. For these types of plans, Medicare Part D and Medicare Part C, the enrollment period is currently November 15-December 31 of each year.
Even considering that the end of a year is still an excellent time to review your Medigap coverage and make any necessary changes. Medigap coverage does not alter on an annual basis like Medicare Advantage, and Medicare Part D. The plan coverage is the same over time; however, your rates can change on a yearly basis.
It is good to re-evaluate the Medicare Supplement / Medigap coverage on at least a biannual basis, as insurance is a rapidly evolving field that needs one to be aware of current rates and trends.
In the last year in many areas of the country, Medicare Supplement rates have gone down due to new companies entering the marketplace and developing new plans (Medigap Plan N). So, ultimately, although you just do not have to re-evaluate your plan during the upcoming annual enrollment period, now is a good moment to do that.
HEALTH PLANS –
HMO vs. PPO: In an age of acronyms, insurance plans seem to have cornered the market on these catchy abbreviations! Only speaking, HMO short form for “Health Maintenance Organization” plan and PPO stands for “Preferred Provider Organization.
Characterizations of HMO: Typically offers a very small, dollar flat rate for seeing a doctor or having a medical procedure done.
Qualifications for using HMOs: You must choose a doctor from a designated pool of physicians to be your primary care doctor. Your designated physician must coordinate all care on your behalf such as referring you to designated specialists or scheduling x-rays at a facility, etc.
Pros and Cons OF HMO’s: They are very affordable and do not require a filing of claim forms. The downside is that you must choose a doctor in a designated pool of other doctors. Your current physician may or may not come with this health plan.
Characterizations of PPO: Typically costs more than HMO plans, also usually offers a higher dollar rate for seeing a doctor or having a medical procedure done.
Qualifications for using PPO’s: You may use any doctor you wish, although you can avail discounts on medical care if you decide to use a doctor within the HMO physician pool.
Pros and Cons of PPO’s: You may have to file your claim forms for each doctor that you see. You may use any doctor or specialist that you wish, but the cost is usually significantly higher than the HMO.
There, that wasn’t so bad, was it? We shall continue looking at the various other types of plans that have gained popularity in recent years.
FLEXIBLE SPENDING ACCOUNTS OR FSA’S/HSA’S (Health Savings Accounts)- FSA’s: Your employer may offer these type of “savings accounts” designated solely for the purpose of health care or other IRS-approved expenses on a tax-free basis.
Characterizations for using FSA/HSA’s: Employees may begin contributing a specific dollar amount to these accounts for designated health care expenses. The dollar amounts provided are deducted from your gross payroll so that taxes are not calculated on this sum. Therefore, you have to pay taxes at a lower rate.
Qualifications for FSA/HSA’s: You must calculate your projected health care expenses carefully as an annual figure. Then, a set dollar amount is deducted from your pay in equal increments over the course of the year.
Pros and Cons of FSA/HSA’s: Typically, if you fail to use all of the monies that are set aside for healthcare expenses for the year, the employee LOSES that money! According to the IRS, it cannot rollover from year to year. So estimate your costs very carefully!
SHORT/LONG TERM DISABILITY
These plans are ideal if, for some reason, you have a temporary disability for a period. For example, if you are scheduled to have surgery or some other type of procedure that keep you from working, you may collect either a portion or all of your paycheck during your recovery. This benefit is crucial and your healthcare package includes it.
Dental Benefits follow the same scenario of treatment as the medical plans above and are usually offered at a very affordable rate.
Some employers offer life insurance at 1 1/2 times the annual salary of each employee. There are also options to “buy up” on life insurance which only means that you can increase the dollar amount of life insurance coverage so that your beneficiary will inherit a larger policy.
This is very beneficial to spouses and families as well as those employees that have critical/chronic illnesses. You can also call these plans as “portable” policies. In other words, if you were to leave your place of employment, you may take your plan with you as long as you pay premiums and complete the appropriate paperwork.
This is a very brief overview of the more common benefits available to most employees in the workplace today. The best advice to offer someone at Open Enrollment is if you may have any questions on benefits, see your HR representative or attend an Open Enrollment meeting.
It’s a guarantee that if you are confused about a particular plan, the odds are several others are confused as well. Don’t be afraid to speak up! Your health depends on it.