professional development
ANNUAL ENROLLMENT:
HEALTHCARE AND FINANCIAL CARE By Cindy Perry
I
t’s that time again! Annual enrollment season! It’s the time of year when the benefits professionals at organizations around the country are missing office parties and happy hours in an attempt to get you to read the materials and make your benefit elections before the dreaded “deadline.” As a benefits professional with over 20 years in the game, I can tell you that we are very proud of what we do and we want you to read everything that we write. We know that if you do, you probably won’t have that many questions for us moving forward.
You have probably spent hours flipping through the pages of benefit charts and texts trying to determine the difference between a CDHP and PPO, HSA and HCFSA. You do all that research to find yourself picking the same plan without thought or using the eenie, meenie, miney moe method of choosing your benefits plan. Not giving serious consideration to this choice could result in you spending thousands of dollars of unnecessary cost and missing out on opportunities to grow your savings. But we want to help you secure your financial future. I will give you a few tips that I hope will help you better navigate this annual rite of passage and be on your way to a better benefits future. Choosing your benefits is a financial decision – Many large employers will offer a choice of different plans. These plans are administered by the same insurance company (or carrier/administrator). The choice that you’re making when choosing a plan is less about care and more about how you prefer to pay for care. These health plans explain why you need benefits, and who you prefer to pay in the event you don’t need benefits. The key word is “pay.” You are going to pay for access to healthcare. Who and how you pay is up to you. This is one of the main differences between a PPO (Preferred Provider Organization) plan and a CDHP (Consumer
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Driven Health Plan). Which brings me to the next point. PPO plans usually have a higher pay-check deduction than consumer driven health plans (more commonly known as high deductible plans). In addition, there is a lower out-of-pocket cost when you see a doctor. But what happens if you don’t use the plan? Do you get that money back? Nope. So consider paying yourself. Participate in a CDHP that lowers your paycheck deductions. A CDHP will also allows you to contribute tax-free money to a HSA (Health Savings Account). You can use that money to pay for eligible medical expenses if you have them. If you have lower paycheck deductions and money saved – it’s a win, win! More expensive care does not equal better care – If your company offers a health plan navigator tool, use it. It can save you BIG dollars and help you find quality care at the same time. Contribute to the healthcare FSA – Only if you know you’re going to spend the money. If you’re contributing to the HSA, your contributions to the FSA plan can only be used for dental and vision expenses. If you need to get that crown, pay for it with tax-free dollars while leaving money in your HSA to grow and earn interest. Let that money roll over from year to year. Unless your company is changing carriers/insurance companies, annual enrollment is not about what doctors you can go to, it is about how you’re planning to spend your hard-earned money in the upcoming year. All plans have nuances and details that must not be ignored. You should review your plan materials carefully and attend any information session available to you. Whatever you do, take the time to review the numbers as well as the other information and make the best decision for you and your family’s physical and financial health! u
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