Save on Health Care With Open Enrollment

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If you’re lucky enough to have health insurance at work, keep an eye out for notices of the “open enrollment” period, a chance to change policy options for the coming year. At most firms, open enrollment periods are in November or December.

Miss the deadline and you’ll probably have to stick with your current plan for the next year. You might end up paying more than you need to, or not getting the type of coverage that suits you and any dependents.

When assessing your health care options, also decide on the best way to set cash aside for out-of-pocket healthcare expenses that could rise. At a minimum, cash should be stored in a checking account with a debit card so you don’t have to use a high-interest credit card.

But if you could face very large out-of-pocket expenses, it could pay to buy a series of certificates of deposit with varying maturities, to squeeze a little more interest earnings out of cash you’re not likely to need very soon.

It’s no secret that health insurance costs are rising, and most employers are passing increases on to employees. But the open enrollment period is an opportunity to select the plan that seems most likely to meet your needs at the lowest possible cost.

In many cases, workers have a choice between paying a large premium with little or no out-of-pocket expenses, like co-pays for visits to the doctor’s office, or a low premium with high co-pays. If you and any dependents are in good health, the low-premium option could be the best choice. People who see the doctor a lot might be better off with the large premium and low out-of-pocket costs.

Before switching plans, check to see that the new plan’s network includes the doctors and hospitals you prefer, and decide how important that is to you. Most people can't really tell whether one doctor is better than another, and it may not make sense to stick with an expensive plan just because your doctor has a good bedside manner or slightly better location.

If you are married or have children, make sure the new plan will cover them and find out the cost. Some firms require employees to pay extra to cover spouses who have access to health insurance through their own jobs, and some reports say more and more employers require verification when an employee says a spouse does not have his or her own plan.

If it will be very expensive to cover a spouse and children, use the Banking My Way search tool to price private insurance policies. It’s usually cheaper to cover dependents through a group plan than a private policy, but it’s worth checking into.

In weighing plans, look carefully at any exclusions for pre-existing conditions. These aren’t as common with group plans as with private insurance, but it’s important to check.

While you’re at it, see if your employer offers a flexible spending account for health care. FSAs allow the participant to set aside pre-tax money for health-care costs, providing the same type of income-tax break one gets with a 401(k).

This fund can be used for deductibles, co-pays, co-insurance and other qualified expenses not covered by the health insurance plan. But the money not spent during the year is forfeited, so it’s important not to put more into the plan than you’re likely to spend. FSAs also have enrollment periods, generally in the fall.

—For the best rates on loans, bank accounts and credit cards, enter your ZIP code at BankingMyWay.com.

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