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What does “Deductible Waived” on Co-Pays Mean (And Is It a Good Thing)?

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When you see what your health plan’s co-pays are, it’s easy to tell how much you’d pay for a doctor’s visit, lab test, or x-ray. But what does it mean when the “Deductible is Waived” for the co-pay? And will this cost you more or less in the end?

Normally, you are responsible for paying your full deductible before your insurance pays anything towards your health care. However, some plans will waive the deductible for certain services, usually office visits or emergency care if you’re admitted to a hospital.

Let’s say your co-pay for a doctor’s visit is $25 and your deductible is $1,500. If the doctor charges $200 for a visit, you would normally pay the $200 yourself and it would be applied to your deductible. If the co-pay is waived, you’ll just pay $25.

 

Sounds like a good deal right?

Maybe, maybe not. Waived co-pays can be a great deal if you are pretty healthy and do not expect to meet your deductible. They’ll allow you to skip over paying the full charge and only be responsible for the co-pay. They can also save you a lot of money if you are ever admitted to a hospital from the emergency department.

But if you would meet your deductible anyway, this feature doesn’t really save you money in the end. It might actually drag out how long it would take you to meet your deductible, just shifting the out-of-pocket cost to other services. Or even worse, some plans will not apply that $25 co-pay you just paid to your deductible, so you won’t get credit for the money you just spent.

 

And keep in mind that many preventive care benefits are 100% covered anyway, regardless of whether you met your deductible.

So your best bet? Enjoy the waiver benefit if you have it. But be wary of paying a higher premium for the feature if you use a lot of health services–it might not be worth the cost. And always check on exactly what costs are applied to your deductible if you expect to meet it!

 

Saving Money with the FSA Grace Period

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Did you miss out on spending down your FSA last year?

Hold on, all might not be lost. FSAs and HRAs are “Use it or lose it” accounts, meaning if you do not spend the funds by the end of your plan year, the money disappears.

But did you know that some employers have a grace period for FSA and HRA spending? Federal tax regulations allow them to extend the time for incurring expenses by 2 and ½ months into the new year. The extension is optional (not all employers have to offer it), but if you do have the opportunity, it’s a great way to make sure you don’t lose any of the money you’ve already set aside for medical expenses.

How do I know if I have a grace period?
Talk to your HR Department or benefits administrator. Remember, the grace period must be a benefit they have established in advance–it’s not a last minute change they can just throw in!

What if I don’t have any funds left in last year’s FSA or HRA?
If you’ve already spent down your 2012 FSA or HRA, the grace period doesn’t affect you. You’ll just continue spending your 2013 funds as usual.

If I have expenses for services I got in 2013 during the grace period, how will the money be deducted?
Employers will apply the expenses to your 2012 balance first, and then your 2013 balance (assuming you also elected an FSA or HRA for the current year).

What if I have an HSA?
The grace period doesn’t apply to HSAs because money in these accounts always rolls over year to year, so there’s no deadline to spend it.


How to Start a New Health Plan Off on the Right Foot

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Welcome to a new year, with new health benefits. You just chose a new health plan and now it’s in full effect. But most people don’t have a full understanding of how their benefits work. This means that many of them end up losing money in their spending accounts, paying more for care, or getting claims denied.

Follow these tips to make sure you start off 2013 right.

Plan for your Deductible
Guess what–deductibles have gone through the roof over the years, so that often means more cash out of your pocket. If you are one of the 65% of people who have a high deductible health plan, it’s especially important for you to plan your spending. High deductible health plans (HDHPs) come paired with Health Savings Accounts (HSAs), or accounts where you can save money just for medical expenses free from taxes. To be best prepared, you should plan to save at least the amount of your deductible in your HSA as soon as possible.

Network It
Most health plans have some restrictions on what providers you can see or they cover much more on visits to in-network providers. Find out the type of plan you have and whether you have a provider network. HMO plans are the most restrictive–don’t even think about going to a non-network provider unless you want to pay the full cost. PPOs have some more flexibility, but services in-network will be less expensive. POS plans give you more freedom, but often involve more paperwork for out-of-network visits. And finally, FFS plans allow you go to any provider you want, but few companies offer this option anymore.

Get Spent
Did you sign up for an FSA or HRA? Don’t forget about the money in your account. These funds disappear if you do not spend it by the end of the year. Do some planning now by finding what eligible expenses you expect this year so that when they come up, you’ll know to pay with your FSA or HRA, insteading of other funds. If you have an HSA, the same “Use it or lose it” rule does not apply. Your savings will roll into the next year.

Practice Prevention
All health plans must cover a list of dozens of preventive care services, all free of cost. Get your money’s worth by checking out the list and asking your physician what they recommend. Even if you have a high deductible plan and you have not met your deductible, you can still get these services completely covered, as long as you don’t have a pre-existing condition that already required one of these tests or screenings. Learn more about preventive care here.

Have a Non-Emergency Plan

What do you do on the weekend or in the middle of the night when you’re not sure if a medical condition is serious enough for the ER or can wait for a doctor’s appointment?  Most health plans have a variety of options for these uncertain situations such as nurse advice lines or extended-hours urgent care. Know your options so that if you’re caught in the situation, you can choose to avoid an expensive ER visit. Of course, always go to the ER if you are having a life-threatening emergency.


Costly Medicare Mistakes to Avoid if you’re Still Working

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Age 65 is kind of a magic time where the health insurance world changes. But many people are continuing to work beyond 65 these days. What should you do when you become eligible for Medicare but you’re still covered by your employer’s health insurance?

 Avoid these common mistakes that can lead to higher premiums, penalties, or missed enrollment opportunities.

1)   Paying for Part B when you don’t need it

While Medicare Part A is free if you have been working in the U.S. for most of your life, Part B comes for a monthly premium (in 2012 it was $99 for most people). If you have health insurance through your employer, you’re allowed to defer Part B. Otherwise, there is a late enrollment penalty (10% of the premium for each year you didn’t have Part B). Contact Social Security to delay Part B but remember to sign up as soon as you retire or you could be hit with the penalty.

2)   Using your Medicare first

As long as you’re working and covered by your employer’s plan (or your spouse’s plan), Medicare considers that coverage to be your primary insurance.* That means Medicare won’t pay for anything that your primary plan doesn’t cover. They’ll only pay a portion of the bill after the primary plan pays a portion (yes, odd Medicare rules, right?).

So let’s say your employee plan is an HMO, and you go outside your physician network. Don’t expect Medicare to cover anything. However, if you do go to a network doctor, your primary insurance will pay first, and then Medicare will pay a portion, up to the Medicare benefit level. Bottom line? The two sources of coverage aren’t interchangeable. Rely on your employer insurance, and think of Medicare as a bonus, not an alternative.

3)   Not Getting Part D when you should

A lot of people put off enrolling in Part D when they have prescription drug coverage through their employer. And that’s usually just fine. You’ll run into trouble however, if your drug plan is not considered “creditable coverage.” That means Medicare has decided the plan meets certain standards of being equivalent to a Medicare Part D plan. Most employer plans are creditable, but you should still check with your HR department. If your plan isn’t creditable, you’ll end up paying a late enrollment fee  for every month you didn’t have Part D as long as you have Medicare.

You’ve probably noticed by now that Medicare is pretty strict when it comes to how employer health insurance coordinates. And that means little forgiveness if you don’t follow the rules. Questions? Contact Medicare Coordination of Benefits.

Or need more individualized help with Medicare?  SHIP, the State Health Insurance Assistance Program, is a federal program that provides free one-on-one Medicare assistance. Search for the one in your area through Medicare.

 

* If you work for a small employer (20 or fewer employees), the rules are a bit different for you. Medicare is always your primary insurance!

 

5 Mistakes To Avoid During Open Enrollment

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 This post originally appeared on the Mint.com blog. 

The last few months of the year usually mean time to think about choosing new health benefits. Some people think about Open Enrollment as an opportunity—it’s your chance to switch plans! But for most, it’s a looming headache: time to stress about choosing the right benefits.

It could be that there are just so many more options today than ever before. Several years ago, most employers just gave you a choice between a low-cost HMO and a more expensive PPO. Now the options have multiplied into an extended family of acronyms. To make things worse, employers and health insurance companies are pushing more costs onto consumers, so it’s even more important to make sure you’re getting your money’s worth.

As you approach your Open Enrollment period, here are 5 common mistakes, and how to avoid them.

1)   Doing nothing

Almost 9 out of 10 of us just keep the same benefits we had last year. That’s not necessarily a problem, especially if you’ve done your research and your needs haven’t changed. Just make sure nothing substantial has changed about the plan either. Sometimes premiums increase or  benefits get cut, and over time, the plan that was once a good deal may not be the best one for you anymore.

2)   Shopping only by the premium

It’s easy to focus on how much health insurance will cost you each month because it’s a clear, predictable expense. But don’t overlook what you’re paying for or you may find yourself facing big costs later on, such as high deductibles or co-insurance.

3)   Over-insuring

It’s possible to have more insurance than you need. While good-for-you from a health perspective, this might not be that great from a financial perspective.

This doesn’t necessarily mean choosing the cheapest plan if you are a healthy individual—because we are all at risk for those unexpected medical events. But it might mean choosing a plan that has a more limited network, like an HMO if you are not seeing any specialists. Or choosing a high-deductible plan if most of your visits are routine preventive care.

4)   Under-insuring 

Of course, you don’t want to go too far in the other direction choosing too minimal of a plan either. If you choose a high deductible plan, you should be able to pay the deductible at any time if needed. In an ideal world, you’d have lots of time to save up cash to cover your deductible in an HSA linked to the plan. But if you enroll in a high deductible plan, and suddenly have some medical bills before you’ve accumulated enough in your HSA, you could be in trouble.

5)   Ignoring the savings accounts

FSAs (Flexible spending accounts) and HRAs (Health reimbursement accounts) pretty much mean free money on the table. But there are estimates that as few as 20% of people set up an FSA when it’s offered.

If you’re turned off by the idea of keeping receipts and faxing photocopies, give these savings accounts another chance. Now, most issue debit-like cards and many merchants are set up to automatically recognize FSA or HRA eligible expenses—so you can spend easily. You should still keep receipts as proof, and you might still need them for certain expenses. But the tax savings are well worth the work.

 

 

65 Free Preventive Care Benefits to Take Advantage Of

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It’s been said that nothing is free – even with health coverage.

But if you’ve already paid your premiums, now is the time to take advantage of all the 100% covered benefits.

Health plans are required to completely cover 16 free preventive services for adults, 22 for women, and 27 for children. That means you won’t pay any co-pays, co-insurance, or deductibles on any of these 65 services.

Here’s how you can make the most of those free benefits.

Get your basics done.

Aim to get an all-around profile of your health with screenings or wellness counseling.

  • Breast & colon cancer screenings
  • Diabetes, blood pressure, cholesterol, STD, HPV, & depression screenings
  • Vaccines for flu, pneumonia, measles, polio, meningitis
  • Annual check-ups for women
  • Counseling to quit smoking, lose weight, stop drinking, or on HIV and STDs, domestic violence, or breastfeeding.

Here is a complete list of services.

Tell your doctor

The next time you see your doctor, mention that you want to take advantage of your preventive care benefits.

If your doctor has record of you asking about them, they’ll not only be able to start you off, but they’ll see it in their notes whenever you come in and follow-up with you.

Basically, put it on the record: You’ll be more likely to get things done when someone else is part of the plan.

Know the limits

“Free” doesn’t necessarily mean, “always free.” The key is the word “preventive.”

If you’ve had a past medical history that now requires care that would normally be free, it doesn’t count.

For example, if you had a breast cyst, a mammogram would no longer be considered a preventive care benefit.

The same thing happens if the service is aimed at diagnosing a specific illness: if your doctor orders a colonoscopy because you’re having stabbing abdominal pain, the preventive care benefit wouldn’t apply.

Check your bills

For your health plan to treat a claim as a free preventive benefit, it needs to be coded with the right medical billing codes.

For example, a mammogram for a breast cancer patient will have a different code than a mammogram for a perfectly healthy woman.

Doctors and insurance companies make mistakes, so you should review your bills to make sure you weren’t charged. If you’re billed for a service you think should be free, call your health plan or ask your doctor about it.

 

This post first appeared on Mint.com. 

Long-Term Care Insurance: When Health Insurance Doesn’t Cover It

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Providing care for an aging parent or loved one is truly a full-time job, as caregivers play a number of roles – from hands-on health provider and friend to surrogate decision-maker and advocate. When these roles are assumed in addition to typical workplace and family duties, they can prove very costly to both individuals and their employers. But until people experience it firsthand, most of us don’t realize the dramatic impact it can have on our finances, career, health and family. I certainly didn’t.

Planning for Long-Term Care

With limited information, I moved my father into my home when he was 75-years old. As his health declined, I missed more critical work time and it started costing more and more to support him. My husband and I worked extensive hours to provide for his growing need for care which was challenging since we also needed to care for two teenage kids.  The increased costs of caregiving inevitably altered our plans for retirement. Looking back, I understand how not being fully prepared to provide care can impact a family. I’m also convinced that planning for my own later years is a must for me and my family.

A hard truth that families often fail to realize is that government programs like Medicare and Medicaid will not fully meet their long-term care needs. The general intent of health care is to return a person to good health, so its focus is on restoring health. In contrast, long-term care focuses more on caring than on curing. Generally, long-term care provides custodial care. An easy way to remember is “Care vs. Cure.”

Medicare only covers limited skilled care if it improves a person’s health condition and no coverage is available for custodial care. Medicaid covers nursing home stays for poor and low-income citizens, which often requires a person to deplete his or her assets before qualifying for coverage.

The harsh reality is that health insurance may not cover all of the necessary expenses to meet your needs. According to the MetLife Mature Market Institute, the number of adults providing care for an aging parent more than tripled over the past 15 years. And as baby boomers continue to age, the need for long term carewill soon reach unprecedented levels. Long term care insurance policies offer options to help cover in-home care by a nurse or family member or to help pay for care in an assisted living facility. With more people falling into the “sandwich generation” – adults caught in the middle of caring for both their children and their parents – they will find value in the opportunity to plan ahead and prepare for their long-term care needs.

The demand for long term care insurance is on the rise and the cost of being unprepared is extremely high for both individuals and businesses. Now is the right time for you to do your research and sit down with your family to discuss the best plans to ensure your family has the best coverage possible.

 

This post was provided by guest author Dan S. at “Health Insurance Doesn’t Cover It.”

Health Insurance Doesn’t Cover It is a comprehensive website that provides tools and information to help people research the different types of supplemental coverages available to help pay for unexpected and unwelcomed surprises. 

 

How to Choose the Cheapest Health Plan that Still Meets your Needs

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This post appeared earlier on Mint.com. 

Maybe it’s Open Enrollment time or maybe you’re starting a new job that offers health benefits.  What’s the key behind all the terms – HMO, PPO, HDHP—and what can they tell you about how much that plan will really cost you?

The two most common terms, HMO and PPO, have to do with physician choice. And a HDHP is about the deductibles. As a general rule? HMOs will offer greater savings than PPOs, but at the cost of less choice and control. And HDHPs can save you even more money if you are healthy and don’t get frequent medical care.

So which plan fits you?

People with an HMO

  • Pay lower monthly premiums
  • Have to go through a primary care physician for everything
  • Have to get a referral for specialty care

People with a PPO

  • Pay higher monthly premiums
  • Can generally go directly to specialists
  • Will usually pay more for specialty care when they do get it

People with a HDHP (High deductible health plan)

  • Pay lower monthly premiums
  • Have a high deductible—you’ll be responsible for at least $1,200 out-of-pocket before your plan pays anything
  • Can open an HSA (health savings account) to save money specifically for health care costs with big tax advantages
  • Are usually younger and healthier

Some things are consistent across HMOs and PPOs – both have to cover preventive care at no cost to you (and that’s even if it’s an HDHP, and you haven’t met the deductible yet!), emergency care at out-of-network hospitals at the same level of coverage as in-network hospitals, and both have the same annual and lifetime out-of-pocket maximums.

Prescription coverage will vary by the plan.

If you’re overwhelmed about choosing the best plan for you, try focusing on two things: Physician choice and how often you need health care. Are willing to pay more to get easier access to specialty care when you want it? And are you willing to chance having to pay a higher deductible to have lower monthly premiums?

For many people, simplifying it to these two preferences will help lead you to the right plan.

Do you Need Supplemental Health Coverage?

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With more and more people signing up for high deductible health plans, supplemental health policies have also become more popular. According to America’s Health Insurance Plans, high deductible health plan enrollment has grown by over 18% since 2011. Since these plans have deductibles of anywhere from $1,200 to $8,000, a supplemental policy to pad your plan can look very tempting.

Supplemental plans can either help pay your deductible and out-of-pocket costs, or they can pay out a lump sum of money either at one time or each day that you qualify for benefits.

The plans can be pretty inexpensive—as low as $12 a month for an individual and $20 to $30 a month for a family. But the benefits can vary drastically so make sure you know what you’re buying.

Considering supplemental health coverage? Ask these questions.

How much would an emergency would cost you?

Add up your deductible and the out-of-pocket you would owe for a few days in the hospital. Of course, you can’t be sure without knowing the actual costs, unless your plan has only fixed co-pays. But you can estimate: assume any major event would cost well over $10,000—how much would your co-insurance be?

Getting a rough idea will help you understand how useful a supplement might be.

Would you have other (non-medical) costs?

In an emergency, you might find yourself with other financial hardships such as lost wages, living expenses, or transportation costs. A supplemental policy can cover these expenses. Usually, the plan pays you a cash sum and you can decide how to spend it. One advantage of this type of policy is that it can help cover expenses that are not HSA-eligible.

What are the plan’s benefits?

Will the benefits cover enough of your likely costs to be worth it? A typical accident or injury plan may pay out $250 for each day you’re in the hospital, while a critical illness policy will pay a lump sum if you are diagnosed with cancer or have a stroke. If your day to day costs would far exceed the daily benefit, the policy is not worth the money.

How do you qualify for benefits?

It’s important to read the fine print here. A policy may only start paying benefits if an illness or injury reaches a certain degree of severity or may limit the days of benefits it pays. It may also pay much lower benefits for more common diseases—the times your most likely to need it. For example, one consumer was told his policy would pay $5,000 for cancer, but in reality, the $5,000 was only for internal cancer (breast or lung) and skin cancer was paid at $100.

The bottom line is, weigh the costs and benefits of supplemental health insurance carefully. If you have a typical health plan, you probably do not need an additional policy. But if you have a very skimpy or high deductible plan, you’re more likely to find a supplement to be helpful.

And most importantly, remember that these plans are meant to be what the name suggests—a supplement—and not a replacement for full health insurance.

 

Six HSA Tips for Beginners

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This post originally appeared on Mint.com. 

High Deductible Health Plans paired with Health Savings Accounts (HSAs) are one of the fastest growing types of plans.

Just opening an HSA or still trying to figure out how yours works? Many people find the idea of managing not just a health plan, but now a health plan with a linked savings account a little more daunting. How much should you save? What can you spend the money on?

An HSA doesn’t have to complicate life. If you can get behind a few simple tips, you could be on your way to big savings.

WHEN: Open your HSA right away.

Don’t wait until you have medical expenses. Any expenses that you incurred before you opened the account won’t qualify for reimbursement.

HOW MUCH: Max it out first.

In general, you can take advantage of the full tax benefits of and HSA by contributing the maximum allowed—within reason of your budget of course. HSAs have the best tax benefits compared to IRAs or 401ks. You never pay taxes for contributions, interest, or distributions, so put the maximum contribution in your HSA first. The exception is if your employer matches 401k contributions—then, it’s best to put your money in the 401k up to the matched amount.

WHO: Spend on you, your spouse, your dependents.

If you have family health insurance, you can pay for your spouse’s medical expenses with your HSA even if your spouse doesn’t share the HSA.

WHAT: Get your medical supplies.

Check out what purchases you already make that qualify as HSA expenses. You can use your HSA on items such as bandages, crutches, contacts and contact solution, or breast pumps and lactation supplies.

WHAT: Pay for premiums.

In general, you can’t use HSA funds on health insurance premiums but there are some exceptions:

  • COBRA benefits
  • Medicare premiums
  • Insurance premiums after age 65
  • Long-term care insurance.

WHAT: Finally, don’t spend it at all.

Instead, pay your medical bills with non-HSA money. Sounds counter-intuitive, right? Didn’t you save that money just so you could use it on health care? While this is the purpose of an HSA, you also have the option to just let the money grow. HSA funds grow tax-deferred, so you won’t pay any tax ever unless you use the funds to pay for non-medical expenses (at least until age 65).