1st page - Medical Coverage
July 6, 2009 – 8:18 amWelcome back!
Be prepared for managed care to become a part of your life. Assuming your employer offers a choice between an HMO and a PPO, take a hard look at the HMO. It just might save you some money. Though your premiums may be slightly higher, HMOs typically carry no deductible and charge patients minimal co-payments (as little as $5) for doctor visits. Because they are so affordable, and limit your access to specific medical providers, HMOs are best for workers with average medical needs and for families with young children requiring routine, periodic checkups.
To cut costs in managed-care programs, insurers want you to use the pre-approved doctors in their networks. You’ll start by selecting a primary-care physician: a general practitioner who will see you for routine checkups. If your doctor is not on the pre-approved list, you are going “out of network”. Be prepared for limited reimbursement – as little as 50% in some cases. Similarly, when you need a specialist, you generally must seek a formal referral from your primary-care physician. Failing to do so will limit your reimbursement or wipe it out altogether. One tip: Managed-care plans require you to be a card-carrying member, so always carry your ID card. That way, if you have to make an emergency trip to the doctor or the pharmacy, you’ll be charged only what the arrangement requires. Without the card, you could be forced to pay in full, up front.
Almost half of large U.S. Companies now offer so-called flexible spending accounts (FSAs), which let you pay certain unreimbursable medical costs with pretax dollars. Here’s how they work: you decide how much you’d like to place in your FSA during the year (typically between $2,000 and $5,000), and the amount gets zapped from your paychecks in equal installments before taxes. When you need access to the funds (for such costs as health deductibles, prescription eyeglasses, even cab rides to your doctor’s office), you simply fill out a claim form for reimbursement. Best of all, with an FSA you can withdraw the maximum amount pledged even before you’ve paid in the cash for it. Anyone with significant out-of-pocket medical bills -more than a few hundred dollars a year -definitely ought to consider enrolling in a tax-saving FSA, if one is available. Need proof? A married worker with a $50,000 salary who spends $1,000 on health care can expect to save about $350 in taxes by opening up an FSA. Incidentally, If one spouse makes over $65,400 and both have access to an FSA, the one with the lower income should fund the FSA. Aside from avoiding federal and local taxes, he or she will be able to shield some pay from the 6.2% Social Security tax on incomes up to $63,600.
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