Healthcare open enrollment is upon us. Here are some things to keep in mind.
1. Medicare Advantage Plans vs. Medigap Plans: Medicare Advantage plans wrap all of Medicare into one plan. Medigap, also known as Supplement Insurance, plans are separate from Medicare and help pay for medical care not covered under traditional Medicare. The premiums are charged in addition to Medicare Parts A, B, & D and are usually more expensive.
2. Take Advantage of a Health Savings Account (HSA) or Flexible Spending Account (FS). HSAs have higher contribution limits–$3,350/year for individuals and $6,750/year for families. The money in an HSA will roll over year after year; money not used in an FSA is forfeited. FSA contributions are limited to $2,650/year. To qualify for an HSA, you must be enrolled in a high-deductible health plan. Earnings and withdrawals are not taxed in either account as long they are used for qualified medical expenses.
Contributing to an HSA can be as advantageous as contributing to a retirement plan. Since the money in an HSA will roll over every year, you can use it in retirement to pay for eligible medical expenses.
3. Know the Dates of Open Enrollment! Affordable Care Act open enrollment is November 1st through December 15th. Employers often have their open enrollment around this time as well.
4. Take Advantage of Wellness Incentives. Health insurance providers often have incentives. They can be as simple as going to the doctor for a general health assessment. Incentives may include additional HSA contributions, lower premiums, or even gift cards.
5. Compare Costs: High-deductible plans have lower premiums, but out-of-pocket maximums increase with high medical expenses. Other plans with higher premiums may cover more expenses because of the lower deductible and maximums. Make sure you weigh the pros and cons of each plan.