Open Enrollment Ahead: Which Health Insurance Plan Should You Pick?
If you have multiple health insurance plans to choose from, your first consideration should be overall cost. The most comprehensive plans likely mean less money out of your pocket for co-pays and deductibles, but you'll pay higher premiums to get that coverage. By contrast, less inclusive coverage may force you to pay your doctor more for every visit, but you'll have less money taken out of each paycheck.
Obviously, it's impossible to know in advance exactly how much you'll need to pay in medical expenses. But based on your past medical history, you should be able to get a good idea of what you've typically spent in prior years. With that information, you can project what your costs will be under each plan and make an informed decision.
Conversely, if you have adverse health conditions that require frequent treatment, then higher-cost coverage may well be worth the price. Even small savings in co-pays and deductibles can add up if you visit your doctors often enough.
The other decision involves setting money aside in a Flexible Spending Account. For plan years starting in 2013, workers whose employers offer FSAs can set aside up to $2,500 per employee in pre-tax money for medical expenses. That's down from $5,000 this year due to limitations imposed by the Affordable Care Act, but it can still save you hundreds of dollars in tax liability.
The danger with FSAs is that whatever money you set aside in them must be spent on health care expenses by the end of the year (or shortly thereafter in plans with grace periods). Otherwise, you forfeit the savings. So in deciding how much to save, be conservative -- it's much better to save too little than too much and end up losing it.
It can be tough deciding on health insurance and other benefits. But with a whole year's worth of costs riding on the decision, it's smart to take some time and figure out the best answer for you.
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