Decision Time

It's that time of year!  Not only is it the time to begin planning for the holidays, it is also time for many people to make choices on their benefits.

Whether you are still employed and it's Open Enrollment time at work, or you are retired and deciding what Medicare Advantage plan to select for the next year, here are a few key points to consider.

Most plans run on the calendar year, which means all deductibles and out of pocket maximums reset to a starting balance of $0.  If your plan does not have a renewal on January 1, this will happen on the date that your plan renews.

If you are employed, your options may be limited to the choices offered through your employer.  If you purchase your own insurance, there are many options available and here are a few key tips and definitions.

Let's start with a few definitions.

A deductible is the portion of the expenses the insured must pay before the insurance plan begins to pay.  There are some exceptions to items considered to be preventative.

An out of pocket maximum is the maximum amount you will pay in a plan year with the exception of prescription and doctor visit co-pays, which do not go away.

A co-pay is a payment made by the member for a prescription or a doctor visit.  A primary care physician normally has a lower co-pay than a specialty physician like a cardiologist.

The premium is what you will pay for the benefit.  It can be based on a weekly, bi-weekly, monthly, or in another time period.  Many employer sponsored benefits are taken on a pre-tax basis, allowing your salary to be reduced before taxes are taken.  Also, most employers pay most of the premium as a benefit of employment, leaving the employee to pay a small portion.

An aggregate family deductible requires all family members to "contribute" to the overall deductible before the total is reached.  The total can be reached by one person or multiple family members. An embedded or "per individual" deductible means that family members must each satisfy a portion of the family deductible before the overall deducible is reached.

When selecting a medical plan, whether you are doing it on your own, through an employer, or if assisting an older family member looking for a Medicare Advantage plan, look at the options available, always verify the following:

Are your doctors and your hospital of choice in network?  A network exists for lower costs to you when your providers join a network.  You will pay the in network co-pays and portion of the insurance until you reach the deductible.  If a provider is out of network, your portion increases.

In what tier are your medications?  If you take a brand name medication, it may be in a higher tier for the co-pay.  If a generic medication is available, request it to save money.  Look at the co-pays for each tier.  Using a mail-order pharmacy plan can save you money for a prescription you take on a daily basis.

If your employer offers additional benefits including a 401k or retirement plan, an FSA (flexible savings plan), and ancillary benefits (disability, life, etc.), take the time to carefully review these additional options since you can only enroll during open enrollment or for some if a qualifying event (marriage, death, new child) occur during the year.  Take time to review the paperwork, ask questions, and consult with professionals if necessary when making your decisions.