Most of the new rules mandated by the health insurance law aren’t scheduled to take effect until 2014. So your employer’s benefits menu during open-enrollment season this year is likely to look a lot like it did last year. Use these strategies to maximize your benefits.
Compare plan costs. Employers expect health-benefit costs to rise by an average of 7% in 2013, according to the National Business Group on Health’s annual survey of large employers, and 60% of employers plan to boost premiums to cover the increase. They’re also shifting costs to employees in less-obvious ways -- charging extra for dependent coverage, for example, and increasing deductibles and out-of-pocket maximums. Some plan to increase coinsurance rates (the percentage of the cost you pay) for buying drugs at a retail pharmacy or receiving specialist care. If you have a choice of plans, compare premiums, coinsurance rates and deductibles. With any plan, try to find in-network providers and pharmacies.
Consider a high-deductible plan paired with a health savings account. HSAs let you make tax-deductible contributions and use the money tax-free for medical expenses. And employers are making larger contributions to HSAs. To be eligible for an HSA in 2013, you must have a high-deductible plan (at least $1,250 for individual coverage or $2,500 for family coverage). Some employers give cash -- an average of $500 for 2013 -- just for picking the high-deductible plan; others require you to participate in a wellness program.
Even if you don’t have an HSA, wellness incentives may be worth $400 to $500 for the year. Some employers hand out money just for signing up, but others reward specific health outcomes. About one-fourth of employers plan to apply surcharges to employees who don’t participate.
Make the most of your FSA. For 2013, the maximum contribution to a tax-free medical flexible spending account shrinks to $2,500 (from $4,000 with many employers). But most employers offer a grace period until March 15 to use up FSA money from the previous year. And you can use the entire amount you plan to contribute to your FSA in 2013 anytime after January 1 -- even though you haven’t set aside all the money from your paychecks yet. If you have a balance left over from 2012, that can give you an extra-big stash of FSA money to use for major expenses from January to March 15, 2013.
Take advantage of all benefits. Many employers have been offering long-term-care policies to employees at a 5% to 10% discount during the open-enrollment period. But insurers are leaving the group long-term-care business and may shut off new enrollment in the future. If your employer still offers coverage, this may be the year to take action (but compare the cost with individual policies, especially if you’re healthy).
Your employer may offer a good deal on disability insurance to fill any gaps in your current coverage. But buying extra life insurance through an employer isn’t always a good deal; healthy people may find lower-cost policies on their own.
You may be able to put a dent in your commuting costs by setting aside up to $240 per month for qualified parking expenses and $125 for qualified transit passes and vanpooling expenses.
This article first appeared in Kiplinger's Personal Finance magazine. For more help with your personal finances and investments, please subscribe to the magazine. It might be the best investment you ever make.