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If you have a health plan at work, you will be soon coming up on open enrollment. This is where you can could change your health care benefits. Unfortunately, this typically has meant that you had to go through many pages of baffling insurance terms in order to determine what it is you should do.
Better this year
However, it will be better this year as there is a new federal requirement that insurance companies give you an easier to read summary of the coverage of all your potential health plans. If you combine this with wellness plans that would reward you for staying healthy, you should be able to make better decisions about your benefits and save some money, too.
Are you making a costly mistake
More than half of insured workers who were recently surveyed felt they wasted as much as $750 a year because of errors they had made during all open enrollment. So what can you do?
Make sure you're getting your money's worth
The problem is that some people just don't take enough time to review their coverage because it's complicated and overwhelming. The good news is that many insurance companies are now presenting information about their benefits in a way that’s user-friendlier. For example, UnitedHealth has a website that allows visitors to travel through a virtual town, where they get advice and information about a different health plan from each person they encounter.
Thanks to the new federal requirement, it should be easier to navigate your open enrollment options because the insurance companies have to provide standardized 8-page summaries explaining all of the cost details and key terms of their plans. The purpose of this summary is to make it less difficult to compare different policies, benefits and costs.
Save money by staying fit
If you work for a large company, you may have a wellness program to help keep you healthy and, eventually, to reduce the company’s medical expenses. In fact, more than 81% of businesses who have 15 or more employees now offer one or more wellness benefits such as a gym membership, a quit smoking program or stress management classes. Some companies even offer gift certificates or cash to inspire their people to join in these programs. As an example of this, if you are employed in UnitedHealth's personal rewards program, you can reduce your premiums by up to $1000 per year by meeting some fundamental health baselines for cholesterol, blood pressure and other measures.
Flexible Spending Accounts
If your employer offers flexible spending accounts, this can help you save as much as 40% on medical expenses that are not covered by your insurance. This could be contact lenses, braces or glasses. What you need to do is estimate your out-of-pocket healthcare expenses and then have that amount taken out of your paycheck over the course of the year. The money you contribute to an FSA is not subject to payroll taxes, which would effectively lower your taxable income. However, do keep in mind that you must spend that money before the end of the year or you will lose it.
Use it or lose it
It is estimated that about 75% of all US employees could use a Flexible Savings Account. But only about 20% to 25% participate, mostly because they are concerned about the "use it or lose it" rule. However, if you are eligible to participate in an FSA, it's a great way to pay for those medical expenses not covered by your insurance and save money on your taxes at the same time.