Economic uncertainty has many of us digging out the financial fine-tooth comb to search for savings. Where you might not have thought to look is in that fat open-enrollment package that's landing in employee mailboxes around Minnesota.
A survey released this week by Aetna and the Financial Planning Association found that 59 percent of respondents plan to spend less than one hour -- or no time at all -- reviewing their health benefits options during open enrollment.
That would be a mistake, especially as more companies are adopting high-deductible health care plans -- an option that will save some employees money and cost others plenty. Read more about the survey at www.planforyourhealth.com.
For those of us used to the familiar copay structure, these new health plans are tough to figure out. A rule of thumb is that high-deductible plans are generally a good deal for people with low expenditures as well as those with expenditures that exceed the out-of-pocket maximum. Fortunately, most companies offer modeling tools that help you to decide which plan best fits your needs. Or try the health-care cost calculator www.bluecrossmn.com.
Human resources consulting firm Hewitt Associates recently estimated that workers will spend $3,826 on health insurance and out-of-pocket costs in 2009 -- up 8 percent from 2008. Mark Bilderback, group and health care office practice leader for Watson Wyatt in Minneapolis, says we need to train ourselves to think about how to save money on medicine the same way we try to save money at the grocery store. "Know your plan, know what it can do, and capitalize on it," he said.
Smarter shopping
In addition to picking the right insurance, experts say to reduce your health spending by using generic drugs and trying a mail-order service -- two tips you can use year-round, not just during open enrollment.
Some companies are also offering wellness incentives for heading to the gym, taking a smoking-cessation class, or filling out a health assessment form, the idea being that healthy behaviors reduce health care costs. Incentives take the form of premium reductions, an employer credit into a health savings account, or even cutting an employee a check, said Shawn Patterson, Blue Cross & Blue Shield of Minnesota marketing vice president.
Then there are the tax-advantaged benefits that will help you save for health care, child care, retirement and even commuting costs by setting pretax money aside from your paycheck. That reduces the amount of your pay that's subject to income tax, meaning more money in your pocket.
Health care flexible spending accounts (FSAs) can be used to pay for many health care costs, including over-the-counter drugs. But just one in four workers offered an FSA takes advantage of it, Patterson said. He suspects that's because if you don't use the money in a given year, you lose it. If you're in that camp, why not calculate your expected costs and set money aside for just those? And for those who tried an FSA in the past and were buried in paperwork, many companies have streamlined the process with health spending debit cards or online filing, so give it another try.
Dependent care accounts for working families with small children or dependent adults such as elderly parents who need daytime care work similarly. Chances are your costs will far exceed the $5,000 maximum, but any savings count. Check with your employer or read IRS publication 503 to see what kind of care qualifies. They'll have details about any tax-advantaged retirement plans and transportation accounts as well.
Finally, did you know that you may have a benefit that will not only help you understand your benefits, but also will counsel you on financial and mental health issues, review your will and help you find child care as well? More than two-thirds of employers offer such employee assistance plans (EAPs) at no cost to workers with no signup required.
"EAPs are one of the most underutilized benefits out there," said Watson Wyatt's Bilderback. Use the EAP to address issues you might take to a mental health professional, and you will likely save yourself some out-of-pocket medical costs, he said.
Call volume is up at Bloomington-based Ceridian LifeWorks because of stress brought on by debt, foreclosure and other financial concerns. Employers offer EAPs to increase productivity and reduce absences. "If we can help them get through [their issues], then they don't have to worry about it on the job," said LifeWorks Service Delivery Manager Brian Kadlec.
Because Ceridian considers the current financial crisis to be as stress-inducing as a natural disaster, it is offering free public access to Web chats and other tools relating to money at www.ceridian.com.
Did you find ways to improve your financial health during open en- rollment? Tell Kara McGuire at 612-673-7293 or kara@startribune.com.
