Graduated Learning: Life after College

I got my degree, I got a job…now what?

Open enrollment returns November 17, 2013

You would think I’d pay attention to deadlines.  But I’m not the best at that.  So that may explain why I finally picked my 2014 benefits at around 10pm before my midnight deadline a few Fridays ago.

I went through this whole ordeal last year.  I also reviewed a bunch of the jargon related to health insurance plans. The  available options changed this year, so I needed to take another look.

I still had a similar question: Would I rather pay more up front (in premiums) so that I get cheaper coverage immediately than pay less but then have to pay most out of pocket?

I had 3 options this year.  They eliminated the option I went with last year (the Exclusive Provider Organization (EPO)), so I was left with the Point of Service (POS) plan and two “high deductible” options with HSAs.  Last year, I picked the option that allowed me to not think about things as much, i.e. the EPO.  Basically, if I was sick, or needed to see a specialist, I looked up a doctor in the network, and the price of the visit was just a copay.  No need to shop around for the doctor or facility that would be the cheapest.

With the High Deductible Health Plans (HDHP), or as they’re often called, Consumer Driven Health Plans, the idea is to put the spending decisions in the hands of the consumer.  The idea scared me last year, as I mentioned above, because I didn’t have a good way of knowing how much any doctor visit would cost.  For both of the plans, the coverage is a bit different.  Instead of paying a set amount per doctor visit/surgery/etc., the process can be a bit more involved.  You’re encouraged to shop around (which is often not possible if, say, there’s an emergency), and prices can be a bit confusing.  Many websites have started offering cost estimators, like the one at FairHealthConsumer.org, or through your insurer’s website.  There’s another collection of lookup options from this article in the LA Times or this article in the Wall Street Journal.  The insurance usually negotiates a discount, but then you are left responsible for some (if you’ve met the deductible) or all of the remaining cost (if you haven’t met the deductible yet).

The assumptions I’m making about my medical needs for next year:  hopefully don’t need many visits, and definitely not enough to meet the high deductible ($1500 for one, $2000 for the other).

All the plans have an out of pocket maximum, so the range between the “total expenses” for me (premium + out of pocket maximum) is $4-5k.  That’s the total amount of money that would be gone (granted much of it paid with pre-tax dollars).  Hopefully, it wont come to that, but it’s good to know that I wont go into debt forever if something bad were to happen to me (medically speaking).

I went with the plan with the lowest premium.  Then I set my HSA contribution to the difference between the lowest premium and the highest premium, so I wouldn’t feel so bad about having to spend the money on medical expenses.  This plan also includes a $750 contribution from my employer into my HSA.  So, I might use all this, or more of it, or less, but any money I don’t use can be kept in my HSA from year to year.

Another thing to consider:  Once my fiance and I get married, we can (and should) reevaluate our benefit elections.  It’s considered one of the many “qualifying life changes” that allows for us to modify our benefit elections.  It might be cheaper for one of us to join the other person’s plan.  We’ll see how the first half of the year goes, and see which of the plans works for us.  Knowing that I can change my health plan does help me feel a little less worried about my insurance choice.

So, which plans are you looking at?  A co-pay based system?  A high deductible plan with an HSA?  Has all this insurance stuff been confusing?  Are you one of the people in the individual market trying to navigate the options through the Affordable Care Act?  What questions did you ask yourself (or HR) to figure out what plan was best for you?  Let’s talk health insurance!

 

Benefits Open Enrollment: The Decision Looms November 9, 2012

Filed under: Personal Finance — Stephanie @ 8:36 am
Tags: , , , , , , ,

Every year I know I have to do this.  And every year I just pick something last minute and hope it works out.

Like many companies, my employer offers a bunch of different benefits.  I know I’m lucky in some respects, because not all companies provide as many benefits or coverage.  Every year, we get a packet with information, along with links to a few sites that help you compare options.  This year, we have the choice between a Point of Service (POS) plan, an Exclusive Provider Organization (EPO) plan, and two different High Deductible Health Plans (HDHP) that include a Health Savings Account (HSA).  Yeah, it’s basically an Alphabet Soup of Health Plans.

Every year, I think I pick the same plan (or the closest available option).  I’m not sure it’s actually the best plan for me.  There’s a questionnaire on my company’s benefits page that you can fill out and it tells you what plan is the best for my needs/wants.  According to the questionnaire  I should go for the slightly pricier HSA plan, where I pay a bit more for the plan, and the company puts $500 into my HSA (versus $750 into an HSA for the cheaper plan), where I pay a smaller percent of every medical expense than the cheaper HSA.  Confused?  Yeah.

My other options (the EPO and the POS) both have set copays rather than the coinsurance percentage that you have to pay for each service for the HSA plans.  And that’s part of the reason I’m shying away from the HSA-based plans.  I have no idea what anything costs.  I understand that HSA plans are great because they enable a patient to take control of their expenses and are especially good for people who don’t have a lot of medical expenses or problems (the young and healthy).  But with the current health care market, I have no idea how to shop around for medical services.  I have no idea how much a specialist at one practice charges versus another, or how much tests costs.  Granted, for most things, there’s probably a phone number I could call, and maybe I could track down a price.  But to be honest, I don’t want to deal with that.

Things to consider:

Premium costs:  This is the amount I’ll be paying for my insurance plan for the year.  For me, the range is $930/year for the “cheapest” and $1660/year for the most expensive.  Interesting to note, with the cheapest plan, my company will contribute $750 to my HSA, which does make that plan look a lot more appealing.  Other interesting note about premiums:  in my company (and many others) you can pay for the premium with pre-tax dollars.  Which does take a little bit of the sting out of the price.

Deductible:  This is the amount I pay on medical expenses out of pocket before my plan will pay for benefits.  Before you reach the deductible, you pay 100% of your medical costs.  Beyond that, the insurance either covers most or all of the costs, but you usually have to pay a set dollar amount or a percentage of the cost.  That cheapest HSA plan I mentioned comes with a $2000 annual deductible, which means if I need any medical services (beyond a few expenses that are covered 100% before deductible, like preventative care and some maintenance drugs listed on the Treasury Guidance list / Preventative Therapy Drug List [pdf]) I’ll have to pay for all of it either out of pocket or with the money in my HSA.

Maximum Out-of-Pocket:  This is the maximum amount of money I’ll have to spend in a year on medical expenses.  This is where it really acts as an “insurance”.  Heaven forbid something bad happens to you.  Disease, accidents, other scary things like that.  Well, the Maximum Out-of-Pocket amount means a $40k hospital bill will only cost you up to your maximum (for my plan options the maximum is anywhere from $1500 to $4000).  This is the kind of thing where you would be glad to have your HSAs, FSAs, and of course, your emergency funds.

In Network vs. Out-of-network requirements:  For the EPO plan, I’m only covered if I go to a doctor that’s “in network”, which means there’s a list of approved doctors/facilities that I can go to.  I haven’t had a problem with this in the past, except when it turned out only some of the members of the medical practice were in my network, so I had to go to a different doctor within a practice.  For the POS plan, it’s similar to the EPO plan, in that you have copays for each visit.  But you have the option of going to out-of-network doctors.  However, it is more expensive to go out-of-network than it is to stay in-network (i.e. the insurance covers a smaller percentage or requires a higher copay for the out-of-network services).

The other considerations I needed to make was my expected medical expenses (checkups (though some of those are already covered at 100% regardless of plan I choose) specialist appointments, prescriptions, etc.).  And I need to consider what is covered for anything unexpected (small things like sprained ankles or strep throat, or big bad diseases or accidents).  What will I have to pay for those?

So, what did I pick?  I went with the EPO plan.  That’s the one with the highest premium, but I know there are certain healthcare expenses I’ll be incurring and the way the plans are set up, this looks to be my best option.  Plus, this plan has the lowest Maximum out of pocket (and max + premium ends up being the lowest out of all 4 options).  Also, with the high-deductible plans, I feel like there’s a bit of a disincentive to visiting the doctor.  And since I’m already pretty bad at going to the doctor when I should be going, I don’t want the money issue to make things worse.

Have you had to sort through all these confusing different medical plans?  Or are you given one option?  Do you have an employer-based plan, or are you shopping on the open market?  What impacted your health insurance decisions?

 

Going to the Dentist December 12, 2010

Filed under: Personal Finance — Stephanie @ 1:36 pm
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I’ve got a weird past when it comes to going to the dentist.  I went plenty of times when I was a kid, and I even went every once in a while when I was home from college.  But once I was officially on my own (insurance and housing-wise), I completely failed.  I think it was a combination of laziness, confusion about dental/health insurance, trying to find a dentist, and scheduling.  To be honest, I didn’t go to the dentist until right after I had lost my last job.  They were still covering my medical and dental insurance for a month, and since I had all the time in the world, my schedule was wide open for a visit to the dentist.  That was in 2008.  I had gotten used to getting email or postcard reminders from my old dentists, so I assumed I was now going to be on a mailing list for every 6 months.  Wrong.  Apparently if you don’t schedule an appointment when you’re there, they don’t assume you’ll be back.  And since I really didn’t know that at the time, I was mildly oblivious.  Flash forward to 2010.  I finally remind myself to go to the dentist.  Set up an appointment and go.  When I arrive at the front desk to check in, they do the usual paperwork, then inform me that I owe them copays/balances from 2008.  I didn’t think I owed anything, and they never contacted me or sent me to collections or anything.  I would have paid up front back in 2008 had I known.  Who knows if I actually owed them, but I paid off my balance in full.  Interestingly, they also forgot about me in the waiting room.  I feel like this dentist office isn’t really big on following up on people…or at least not on new patients.  Seemed like most patients were regulars.

At any rate, when all was said and done, my dentist told me that I should probably get one of my wisdom teeth removed.  He gave me  a referral and my x-rays and sent me on my merry way.  Of course, again, me being lazy/not a fan of calling for appointments, I didn’t follow up until a few weeks ago.  But I had no clue how much this would all cost, and what my insurance would cover, or what exactly the surgery would entail.  So they actually were able to squeeze me in the Saturday right after I called them for a consult to figure out what to do.

When my name was called in the waiting room, they led me to a small room where they made me watch an “educational video” that was part advertisement, part educational, and part scary.  The video basically said, “you should probably get all of your wisdom teeth out ASAP, just in case, because the older you get, the worse things could get, and the probability that your wisdom teeth will cause trouble is pretty high”.  So, besides getting a bit squeamish, it also got me a bit worried…are all my teeth going to fall out and I’m going to have horrible diseases if I don’t get this taken care of right away?  The oral surgeon came in, looked at my x-ray really quickly, eyed my mouth, prodded around briefly with his gloved hands, and declared that I should get all four wisdom teeth removed.  Great.  How much is that going to cost me?

Well, when I checked out, they told me they’d run the numbers to see how much my surgery would cost and how much my insurance would cover.

Here’s where all the personal finance stuff really comes into play.  While waiting to hear about what my insurance would cover, I had a lot of questions:  Do I hold off a few more months, wait until the new calendar year for a better dental plan to kick in?  I could get a better dental plan, plus I could calculate how much to put into an FSA to cover the cost beyond what the insurance might cover.  But is this being pennywise, pound foolish?  Will holding off for a few more months mean my mouth gets all messed up and I have even more expensive problems to deal with in the future?

The good news?  All those worries were for naught.  Turns out, my health insurance would cover everything (except a copay).  So that meant $30 for the whole surgery.  WHAT?  I had to sign a form when I got my surgery that said that I agree to pay the copay, and it showed me how much it would have cost.  $2,100.  Another reason I’m glad I have health insurance.

I got the surgery this past Thursday, all 4 wisdom teeth were taken out, and have been eating pudding and applesauce ever since.  It hurts, but I know it’s important that I got this taken care of.

So, this is quite a long post.  I’m impressed if you got all the way to the bottom.  But now my question for you:  Did you ever get your wisdom teeth out?  Have you ever made a health decision based on cost, rather than on the advice of a doctor?

 

Layoff Survival Guide: What’s this COBRA thing? June 26, 2009

Filed under: Careers,Personal Finance — Stephanie @ 3:55 pm
Tags: , ,

Hopefully you found my last post in my newly minted Layoff Survival Guide useful.  And if not, here’s another chance for some helpful advice!

So, like I said last time, a really good friend of mine lost her job, and is now dealing with all the issues I had to deal with a little over a year ago.  So I figured I’d help her out, and maybe help others out along the way.  Behold, the power of blogging!

Her question for me was about COBRA.  What is it, what does she need to do, what are her options?

Let’s start with a simple definition.  COBRA stands for Consolidated Omnibus Budget Reconciliation Act.  Yeah, that doesn’t mean a lot to me either.   But when you’re handed a severance package with all sorts of information, one thing you’re told about is COBRA (and if you didn’t get any info for COBRA, I recommend you contact your former employer to find out what’s up).

Basically, COBRA entitles you to continue your health coverage that you received through your employer.  Except you will be paying the premium (rather than your former employer).  However, recent legislation from The American Recovery And Reinvestment Act allows for assistance in your insurance premiums through COBRA.  As stated on this Department of Labor page:

“Eligible individuals pay only 35 percent of their COBRA premiums and the remaining 65 percent is reimbursed to the coverage provider through a tax credit. The premium reduction applies to periods of health coverage beginning on or after February 17, 2009 and lasts for up to nine months for those eligible for COBRA during the period beginning September 1, 2008 and ending December 31, 2009 due to an involuntary termination of employment that occurred during that period.”

There also is an income threshold that you need to be under in order to fully benefit for this program.  For more information, you can check out their Fact Sheet for COBRA Premium Reduction here.

If you don’t elect to continue your insurance from your previous job through COBRA, you still have options.  A friend forwarded me a link to a site that helps you pick out insurance options (in Massachusetts).  And the DOL has another good page telling you about how to attain health insurance.  You can search for a private insurance plan, or may be eligible for a government plan such as medicare.  Also, if you have a spouse with health insurance, you can get on his/her plan.  I’m not an expert on the different types of insurance, so you might have to do some searching on your own.  Also, there are apparently some tax implications with some health insurance premiums, that I’ll let you check out on your own (mostly because I’m not as familiar with these tax rules).

What did I do?  Well, luckily, my severance package included a month of health insurance coverage, so I was able to depend on that while figuring everything else out.  I ended up paying the hefty premiums for COBRA coverage, continuing the coverage I enjoyed while at my old job.  It may not have been the best decision, financially, but it was the “easy” thing to do.  I found it difficult to sort through all my alternative options for health insurance.

Why is it important to have continued health coverage?  There are a few reasons.  As I learned firsthand a month into unemployment, you never know when you might need insurance.  My boyfriend hurt himself mountain biking, and I drove him to the hospital.  Since he had health insurance, he wasn’t stuck with an enormous hospital bill.  Saving money by not paying for health insurance could end up losing you money if you end up requiring an expensive medical procedure.  Or you may have to decide if a procedure is financially worth it, even if it’s medically important.

Another reason you don’t want your insurance to lapse is because it might make it more difficult to prove that any condition you have down the road isn’t a preexisting condition.  I know that’s more of a worry/fear than an actual fact, so take that with a grain of salt.

So what do you need to do?  Decide whether or not you’re going to continue your insurance plan through COBRA (talk to your former employer/fill out the forms they gave you).

So, like I’ve said before, I’m not a legal expert or anything, so this is merely friendly advice.  But if you see any errors or omissions here, or have specific questions, let me know in the comments or via email.  And if you have other layoff-related questions, you can ping me with those as well!