Health insurance premium increases at large U.S. employers are running 5% for 2017, according to the National Business Group on Health. That seems like a deal compared to the much larger increases individuals are facing on the Obamacare exchanges, but it’s still more than twice the rate of inflation and wage increases, so it behooves employees to tackle rising costs. Here’s a rundown of trends and opportunities for savings during sign-up season and after.
Don’t wait until the last day to deal with open enrollment — that window in November or December when you sign up for your employer health plan offerings for the next year. Many employers have more choices on the menu this year, and they’re charging more to include coverage for dependents, and tightening prescription benefits, changing the calculus for which plan covers your anticipated needs at the lowest cost.
“You have to take the time to do comparison shopping,” says Karen Frost, senior vice president of health strategies at Aon Hewitt. “Automatically saying, ‘I’ll take what I had last year,’ without doing your research, you wouldn’t do that if you were buying a TV or a cellphone.”
For example, it’s easy to just put your whole family on one plan, but that could backfire, Frost says. A neighbor sent his kid to college in a different state. He had an HMO plan with a network of local doctors. His wife’s PPO plan included full out-of-state coverage. Dad kept his plan, but instead of signing up for family coverage, he elected coverage just for himself. Mom signed up for her employer’s plan, adding their child as her one dependent. “The old paradigm of ‘put everyone on one plan’ may not be the best choice,” Frost says.
Consider a consumer-directed health plan (the ones with high deductibles). Most large employers offer three to five health plan choices, including at least one high-deductible plan. In some markets, you might see local plans like Kaiser on the West Coast, or accountable care organizations starting their own plans, Frost notes. If your employer has a new offering this year, check it out. A third of employers offer employees no choice but a high-deductible health plan, but even then, there are usually tiers of deductibles you can choose among—putting you in charge.
If you’re married, look at both spouses’ plan offerings. You’re comparing your full out-of-pocket costs, taking into account premiums, deductibles, and co-insurance. One thing to look for is whether there is a surcharge to cover your spouse if he or she has access to coverage to their own employer (a third of plans in the NGBH). Another is wage-based cost-sharing—some employers kick in more for lower-paid employees, so it might be a lot cheaper to go with a lower-paid than higher-paid spouse’s plan. Some employers extend this wage-based assistance to premium contributions, health account contributions and out-of-pocket maximums, even deductibles.
Compare Rx benefits. Putting limits on pharmacy benefits, in particular specialty pharmacy benefits, is one of the top tactics employers are using to counter rising healthcare costs. For example, you might have to pay the difference between a brand name drug and the generic, or certain brand name drugs might be excluded altogether. So If you have specific prescription needs, make sure you…
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