As the year draws to a close, many people wonder how to manage their health insurance benefits. There are a lot of factors to consider, but there are some guidelines that can help you make the most of your benefits.
If you have a flexible spending account (FSA), you need to spend the balance before the year’s end, because these plans don’t have a roll-over provision. It is certainly a use-it or lose-it situation. There are a few expectations regarding $500 rollovers and extension grace periods, but unless you know with certainty that your plan includes this flexibility, you need to spend the dollars now.
Fortunately, these funds can be used to pay for nearly anything health-related, including therapy services, eyeglasses and more. If you’re concerned about what is covered, there is a comprehensive list on the IRS website.
The funds in your health savings account (HSA) can roll over from year to year, which allows you to save towards an expensive procedure. These funds can also be used to pay for Medicare B and D premiums once you are 65 years old. If you have an HSA, you don’t have to do anything to protect this benefit, and you might want to let the money grow from year to year.
A deductible is an amount that you are required to pay for your own healthcare before insurance begins to cover a larger portion of the costs. For most insurance plans, the deductibles accumulate from January through December, and a new deductible period starts the following January 1st. By year’s end, you may have met or not met your deductible, and your healthcare strategy will be different depending on this situation.
If you haven’t met your deductible than great, you had a healthy year. Don’t rush to get uncovered services addressed, but make sure that you have maximized your fully covered service such as physicals, mammograms, etc.
If you have met your deductible, you might consider having a non-emergency procedure that you have been putting off. Before making that decision, check to see if you have reached your out-of-pocket maximum. If you have, it probably makes sense to do it this year. If you haven’t met your out-of-pocket maximum, you may want to wait until next year, when the cost of the procedure can go toward meeting both your deductible and your out-of-pocket maximum.
The out-of-pocket maximum is the most you will have to pay for covered services. You reach this threshold by paying deductibles, copayments, and coinsurance. Once you have paid the out-of-pocket maximum, the insurance pays all covered services at 100% of the costs of covered benefits. If you have reached the out-of-pocket maximums, discuss the situation with your physician to see if there is any follow-up care or recommended procedures that could be done now.
It is important to act quickly to take advantage of this situation because all services must be booked and billed prior to December 31st. Scheduling can be challenging because everyone who has maximized their out-of-pocket expenses is trying to do the exact same thing.
Most employers allow you to change your benefits during this time of year. Review your past healthcare needs and anticipated procedures for the coming year, and adjust your coverage accordingly. You don’t want to pay for insurance coverage that is too broad, but you also don’t want to get stuck with significant out-of-pocket expenses because you didn’t plan for both the expected and unexpected.
Whether you need personal, family or group health insurance, Medicare, or dental plans, Alliance can tailor coverage that is right for you. Contact us today for a free quote or to learn more about how we can help you protect yourself and your family.
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