Posted on 11/14/2008 5:35:44 PM PST by RKBA Democrat
WHILE YOU'RE CAUGHT UP in watching the stock market ricochet or worrying about the current market value of your home, don't forget the mundane matters of your personal finances.
Yes, folks, it is open enrollment season for those who are still fortunate to have a job that provides decent benefits. During open enrollment, millions of employees make decisions about their employer-provided benefits. Miss this window or fail to make the right choices and you won't get a chance to correct it until next year, unless there is a change in your personal situation, such as the birth of a child or a divorce.
So is your open enrollment packet still sitting on your desk or the kitchen counter unopened?
It probably is, according a survey by Aetna and the Financial Planning Association. Eighty-seven percent of survey respondents said they were more worried about their finances this year because of the struggling economy. And yet the majority of people interviewed admitted that they will spend an hour or less, or no time at all, reviewing their health benefits options during open enrollment.
Hewitt Associates found in its open enrollment survey last year that the majority of workers default into the plans they selected in previous years. I wonder how much their inertia cost them.
When you review your benefit offerings, you will likely find that your employer is asking you to pay more for your benefits. It's been that way for the past several years. And so it will be for 2009, according to the benefits consulting firm Mercer.
In its annual survey of employer-sponsored health plans, Mercer found that the total cost for employees to renew their current health plans -- with no changes -- would increase nearly 8 percent on average. People working for small employers -- firms with 500 workers or less -- would see an even higher increase of about 10 percent.
Employee cost-sharing has risen sharply over the past five years. Between 2003 and 2007, the median family deductible for in-network services in preferred provider organizations, or PPOs, increased from $1,000 to $1,500, according to Mercer.
"While some employers are holding down cost growth with innovative methods of improving health care quality and efficiency, more typically employers struggling with increases they can't handle resort to the tried and true method of shifting cost to employees," said Blaine Bos, a senior health and benefits consultant for Mercer.
More than half of employers in cost-cutting moves will offer heath plans that increase deductibles and co-payments.
Nineteen percent of small employers in the Mercer survey said they would lower their 2009 costs by adding a high-deductible plan that's coupled with an employee-controlled spending account. These accounts are known as health savings accounts, or HSAs. An HSA works like a savings account, but in this case, the funds you deposit are pretax and can be used only for medical expenses.
Watson Wyatt Worldwide, a leading global consulting firm, found a few trends in its open enrollment survey this year:
Some employers are requiring that employees complete health risk assessments. In exchange for their participation, they receive an incentive award.
More employers are also replacing co-payments for prescription drugs with co-insurance arrangements in an effort to control costs. With a co-payment, you pay a specified amount depending on the type of medication you take or whether there is a generic form available. Co-insurance is when you share a percentage of the cost with the insurance company. A typical split is 80/20. So, for example, your insurance picks up 80 percent of the cost of your medication and you pick up 20 percent.
Nearly 30 percent of employers surveyed by Watson Wyatt and the National Business Group on Health plan to operate on-site clinics next year.
More employers are covering preventive medical care and even preventive drugs at 100 percent with no deductible.
To help you make better choices during open enrollment, Aetna and the Financial Planning Association have created "Plan for Your Health," a public education campaign for workers. I suggest you go to the Web site www.planforyourhealth.com, where you will find some very helpful tools and information. On the right-hand side of the home page you will see a link for open enrollment information.
In years past, you may have quickly looked over your benefits opting for what you've always had. Or maybe you forgot to do anything and your employer defaulted you into the previous year's selections. But this year, with the economy in such distress, you need to focus on which options are best because you'll need any savings you can get.
This is one thing that we never take lightly. We always review our expenses from the last year and see if we can determine what they’re likely to be for the next year and some for emergencies.
BTW, I really appreciate this ping list. It’s been very useful with lots of practical information. Thanks.
Please add me to the Surviving Socialism Ping List. Thanks.
If you find yourself not spending much just go with some amount that ends up at 500. Pick the best health plan and you are still pretty safe. The FSA is a benefit for chronic users and emergencies. The unspent money provides for the overall plan.
Looks like we may have money left over (I should have gone with my calculations rather than listen to my DH). My plan is to go on a spending spree at the drug store - stock up on first aid supplies, over the counter drugs that we may need, and whatever else I can find that is something we use, or might use, and is covered. It's our money and I'll be damned if I let them have it.
If you have the option, I strongly urge putting at least some money into a Flex Spending Account. The government will eat anything you have left over at the end of the year, but the co-pays on doctor visits and prescriptions add up to more than you’d think, and a lot of OTC is covered too - even cough syrup.
Have you had your eyes checked lately? That's good for using up extra flex dollars too. Even if you're sure you don't need glasses, it'll keep the money out of the government's hands. And you might be wrong!
We spend enough that we haven't left any money on the table in years, but I figured the tax savings are such that we only have to use half the account to break even anyway.
Good post, as usual. I love my Flex Plan. In fact, I’m going to thank my employer for it again this year, when I send him a Christmas Card.
We work in different cities, and yes, I can actually send a Christ-related Christmas Card, not a “Seasons Greetings” or a “Happy Holidays” card, to him and his family!
It’s so REFRESHING to work for a conservative, moral, God-fearing company/man. I wonder if that’s the reason we’ve grown each and every year for the past 101 years? *WINK*
My employer: http://www.jungseed.com
My proudest moment? When they pulled all advertising dollars (and it was in the tens of thousands each year) from Wisconsin Public Television for objectionable programing. Gotta love that! :)
Now that you mention it, I am due...thanks!
Don’t forget the scratch-resistant coating, the spare pair, and the sunglasses. See how easy?
“The medical flex plan always angers me. We have to be psychic and guess our medical expenses for the next year. Why not let people adjust the amount part way through the year?”
It is a pain, but I’ve found that by and large I underestimate. Going in for a dental exam and eye exam towards the end of the year can help with estimating what you’re going to need the next year. It can also spend some of any remaining amounts.
There are an amazing number of things that are covered. Air filters if you have allergies. Capital improvements such as handicapped ramps if you have a family member that needs it, etc.
I’m familiar with your company. I’ve received their catalog.
Actually, could I ask you a favor since you seem to be in the gardening field? I’m looking for a good, recent article on starting up a victory garden to share with the pinglist. What are the most economical ways to do so with small amounts of land, etc. You can post and I’ll ping, or just FR mail me a link to an article and I’ll do the rest.
“BTW, I really appreciate this ping list. It’s been very useful with lots of practical information. Thanks.”
You’re welcome. I learn quite a bit in doing it, so I’m glad to do so.
Spare glasses, if you wear them.
I’ve picked up baby motrin, teething medicines, and medical diaper rash cream if I had money left over, then used it in baby shower presents for friends.
Wow - that is a GREAT idea! I love this place...
And unlike the 15th cute newborn outfit, you know they will actually USE these items - and often at a frazzled 3 AM rush.
Thank you for the ping.
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