Medical Coverage - continuation
July 8, 2009 – 5:01 amWelcome back!
Now, here’s the catch with an FSA: You lose any funds that you pledge but don’t use during the year. That’s worth repeating. If you tell your employer to put $2,000 into your FSA and then use only $500 of the money, you will never get the other $1,500 of your pay. So before signing up for an FSA, carefully gauge how much you think you’ll incur in out-of-pocket medical costs during the year ahead. You might jot down a list of last year’s outlays with an eye toward new expenses in the year ahead. Don’t forget to include these expenses (if you expect to have them): deductibles for medical plans; transportation costs to and from your medical appointments; prescription eyewear, hearing care and alternative medical treatments, such as acupuncture.
Roughly 90% of large U.S. companies offer dental plans, picking up the bills for between 50% and 100% of all work. As firms search for ways to trim the fat from their medical plans, however, dental plans seem a prim spot for drilling. Increasingly, employers are axing their traditional dental plans and replacing them with managed-care options. Often referred to as dental HMOs, these plans charge no deductible (versus $25 to $50 under traditional plans) and limit your choice of dentists to a pre-approved list. Although you may have to switch dentists to use one in the plan, a dental HMO can be financially attractive. This type of plan will pay the full cost of many routine services, such as tooth cleanings and fillings, as opposed to 50% to 80% reimbursement for traditional plans. Should your employer offer you a choice between a standard plan and a dental HMO, you may be served best by an HMO if preventive services such as tooth cleanings are covered free; waits for emergency services are held to under four weeks; and its dentists are members of the American Academy of General Dentistry.
Chances are, if you’re married, both you and your spouse have access to health plans at work. Which one is best? To find out, you’ll need to comb through the provisions of each to see how you can get the best features for the least amount of money. When scrutinizing plans, consider each of these important factors:
- Deductibles. Count on shelling out anywhere between .3% of your annual salary and 5%. Remember the general rule about these deductibles, however: The higher the deductible, the higher your reimbursement.
- Out-of-pocket maximums. If you anticipate high medical bills, compare the maximum amount each plans requires you to pay before it picks up 100% of the tab.
- Choice of providers. Just because one plan may have more doctors doesn’t necessarily make it a better choice. You’ll want to make sure that the doctor you’d use in any managed-care network is not oversubscribed. You can find out how harried physicians are by calling the provider or the doctor directly and asking how many patients he or she has. Don’t forget to see which hospitals, labs, and pharmacies are affiliated with each plan. If your favorite pharmacy or the hospital you prefer isn’t in the group, you may not want to join the managed-care plan.
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One Response to “Medical Coverage - continuation”
You made some great points here, but what if you are completely healthy and have no medical problems? How do you plan for unexpected injuries or illnesses?
By Stephanie on Jul 27, 2009