The greatest time of all – enrollment period.
Technically it’s a rolling enrollment period for my health insurance and FSA, but I did finally get the email to start the process. I also hope you can taste the sarcasm – there are a few other things I’d like to do than work through insurance and FSA enrollment but you gotta do what you gotta do (quite a first world problem as well since almost 10% of Americans are uninsured).
While we shared a little bit about an HSA (the pros and cons really), you have other opportunities like an FSA (what I currently have) and also some choice around employer sponsored health insurance. We can dive into them a bit more now so you are prepped for PSL season… uh sorry I mean enrollment season.
Quick Refresher: HSAs, FSAs, and HRAs
A Health Savings Account (HSA), a Flexible Spending Account (FSA, also called a “flexible spending arrangement”), and a Health Reimbursement Account (HRA) are all accounts that are designed to help with healthcare costs. There are tax benefits to some (HSAs and FSAs) and others are completely funded by your employer (HRA).
HSAs: To enroll you need to participate in a high-deductible health plan (HDHP) offered by your employer and use the money for qualified health care expenses (generally excluding your premiums). An HSA may also earn interest or other earnings, which are not taxable. These do have contribution limits.
FSAs: To enroll your employer must offer up an insurance program. You have a contribution limit that can potentially roll over if your employer allows it or if they give a grace period. These are used for qualified health care expenses (generally excluding your premiums) and are also pre-tax like the HSAs.
HRAs: Only employers can only contribute to HRAs and these amounts do roll over. If the employee leaves the company then the funds are no longer accessible.
The choices are…
…really up to the health insurance you choose OR that’s available through your employer. Ideally the idea of earning interest on your cash laying around reserved for qualified health care expenses makes the HSA attractive. Yet the FSA is also a good option if you don’t have a HDHP that still can give you some tax incentives.
If either of these are available to me (I’ve used both) I’m going to use it purely based off of the tax incentives.
Health Insurance can get even more challenging…
Health Insurance probably deserves it’s own newsletter and post, but we’ll give the TL;DR version here. By choosing the right plan (although you are limited in your choices if you just go by what your employer offers) you’ll be giving yourself another way to battle healthcare costs you might run into.
The types of Marketplace plans are (starting with the two I’ve used before):
1) Preferred Provider Organization (PPO): The plan where you pay less if you use providers in the plan’s network. You can also see doctors outside of the network without a referral for an additional cost.
2) Health Maintenance Organization (HMO): The plan that usually limits coverage to care from doctors who work for or contract with the HMO. Normally it doesn’t cover out-of-network care except in an emergency (defined how?). This plan also requires you to live or work within the service area to be receive coverage. The bonus is that HMOs typically provide integrated care and focus on prevention.
3) Point of Service (POS): The plan where you pay less if you use doctors that belong to the plan’s network. POS plans require you to get a referral in order to see a specialist (Pain Management, Neurologist, etc).
4) Exclusive Provider Organization (EPO): The plan where services are covered ONLY if you use doctors in the plan’s network (except in an emergency).
Then there are the levels to each plan
Each plan has levels of what coverage they’ll offer from bronze to platinum. So you could have a PPO just like your friend but the coverage is very different. The big differences between the levels of plans are:
1) The details in what’s covered. Platinum covering 90% on average of your medical costs where you pay 10%. Bronze plans cover 60% on average of your medical costs with 40% covered by you.
2) When 100% of the healthcare costs kick in. The deductible (the amount before insurance pays 100%) varies with the least expensive carrying the highest deductible. Remember that HSA conversation we just had?
If you haven’t been to the Olympics or won a medal before the 5 levels of plans are Platinum, Gold, Silver, Bronze, and Catastrophic (yeah I know that’s not a metal). Platinum has the highest coverage with Catastrophic having the highest deductible before really helping out.
Scratching your head yet?
Same. I’ve been in medical sales battling with EOBs and deep discussions with providers over what we’re in network with and I still get confused on what is being covered with my personal insurance. Next week we’re going to finish out this series with a detailed run of the health insurance plan types (not the metals haha) and then we’ll be off to battle enrollment period.
The goal of insurance, HSAs, FSAs, etc. is to battle rising healthcare costs. In some cases it really does help, but at the end of the day if you don’t know how to use sword (your insurance or HSA) how will you actually use it to protect yourself (battle healthcare costs)?