It’s open enrollment season—the time where employers present workers with their health insurance options for the next calendar year. If your expected costs for 2013 are higher than what you’re currently paying, don’t be surprised. After all, a recent survey by the Kaiser Family Foundation and the Health and Education Trust found that the average annual premium for family coverage through an employer sponsored health plan is $15,073 (single coverage costs $5,429). That’s up 4 percent from a year ago—and a whopping 97 percent increase from a decade ago. So while forgoing coverage is not an option, what can you do to keep your costs as low as possible?
Sign up for a flexible spending account (FSA) or health savings account (HSA).
Hands down, this is the easiest thing you can do—and you’ll save hundreds, if not thousands of dollars, each year. These accounts allow you to spend pre-tax dollars on items such as doctors’ visits, prescription drugs, and medical supplies. (Click here for a full list of eligible items and services or go to FSAstore.com, an online retailer that only sells FSA-qualifying products.) For 2013, you can elect to set aside $2,500 in an FSA; for an HSA, the annual contribution limits are $3,250 for an individual and $6,450 for a family. And much like a 401(k), the money will be withdrawn automatically from your paycheck.
Consider a high-deductible plan.
Many companies are now offering this option (also called a consumer-directed health plan), which has a costly deductible—the amount you must spend out-of-pocket before your insurance coverage kicks in. But in exchange, you’ll pay a lower-priced premium than if you signed up for a typical PPO, POS, or HMO plan. (For 2013, the IRS has set the minimum deductible amount to $1,250 for an individual and $2,500 for a family.)
So who should think about signing up? If you’re healthy (i.e., you have no chronic conditions), don’t take medication regularly, and rarely go to the doctor for more than annual checkups (preventative care visits are covered by insurance under the Affordable Care Act), high-deductible insurance coverage could be a cost-effective choice for you.
Participate in healthy-living programs.
According to Rebecca Madsen, UnitedHealthcare’s senior vice president of consumer strategy, “many companies are promoting wellness programs that reward employees for making healthy choices and being more engaged in their own health.” These programs vary between employers, but most typically require you to first fill out a risk assessment, which will evaluate your current state of health. For doing so, it’s likely you’ll receive a monetary cash incentive, a reduction in the cost of your health insurance premium, or rewards points that can be redeemed for prizes. From there, you could enroll in additional activities—such as weight-loss programs, biometric screening, smoking cessation programs, nutrition classes, to name a few—to lower your costs (and improve your health) even further.
Use a cost estimator.
It’s impossible to guess exactly how much you’ll spend on healthcare and medications. (After all, who knows that they’re going to fall down the stairs and break their arm?) But if you’re planning to have non-emergency surgery or have a baby, for example, in the coming year, using one of these tools can be helpful in calculating just how much money you should set aside into your FSA or HSA, says Madsen.Ashley Tate is the money editor at Real Simple, a women’s lifestyle brand that focuses on making life easier.