When I think of winter and the holiday season, I have to admit that my mind usually turns to holiday celebrations and cozy nights with the family. Practical, financial matters are often the farthest things from my mind. I should, however, make a little time to think about our family’s insurance needs.
You see, in our household (like many households) our medical insurance features an open enrollment period for a few weeks each year. This open enrollment time gives us the option to change our plan (between an HMO and PPO option), change our contribution to a flexible spending plan, and to add or drop dependent coverage. Since we have to live with our choices for an entire year, we have to give the matter careful thought each year.
We usually begin our evaluation by looking back over the previous year and thinking about what worked and didn’t work in our healthcare needs. Did we contribute too much or too little money to our flex-spending plan? Did we visit a doctor that wasn’t in our HMO plan and get hit with a big medical bill? This open enrollment opportunity gives us the chance to change our plan to fit these types of situations.
Next, we try to think about upcoming changes in our family. Do we see large medical or dental bills coming this year? Maybe one the kids will need braces. If so, we should increase our flex-spending contributions to cover these increased costs. Will one of us be traveling a great deal this year? In this situation, coverage in a PPO plan may be a better option in case that person gets injured while away from our HMO’s coverage area.
Spending a little time evaluating your insurance needs before your open enrollment period begins allows you to get the most out of your insurance coverage. Rather than sticking with the status quo because the deadline is looming and you don’t know what to do, you can take advantage of your head start and investigate your options. Asking a few questions and spending some time thinking about the answers you get could save you a lot of money over the next year.
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4 responses so far ↓
1 Mari // Oct 30, 2009 at 6:27 pm
It is crunch time – simplifying and thinking about what you need and don’t need is essential in these days.
2 David/Yourfinances101blog // Oct 31, 2009 at 9:23 am
This is all great advice. However, without the benefit of a crystal ball it seems all to speculative to me. Of course, if there is an obvious event arriving in your life, then of course, plan for it.
My mother worked in the insurance industry for a long time, and she broke it down to me like this.
She said, “All insurance is a gamble. The insurance company is gambling that you stay healthy (or that your car or home does, depending), and if you opt not to have it, then so are you.”
3 Lydia@help braces // Nov 10, 2009 at 6:18 pm
Good points. For example if the kids DO plan to get braces, it is always good to get additional coverage on time. Example: http://dentalservice4less.com/braces_insurance.shtml
4 Melissa // Nov 12, 2009 at 6:14 pm
Just a note on setting aside money in an FSA for braces. Check your specific plan provisions before setting the full amount aside – many FSA plans do not allow for full reimbursement up front for coverage that is going to span longer than the calendar year the money is set aside for. Even if you pre pay, you may have to set aside a portion for each calendar year the treatment is occurring. Each plan is different, so check with your HR staff before submitting your election.
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