“We’re giving you a 3% raise, and were raising the cost of your health insurance benefits by 10%... good luck!”
-- Most Companies
Quick survey: Who likes paying 10%-15% more money for the exact same health care coverage as last year?
While choosing your healthcare plan can be tedious and boring it matters because you could be taking that money and directing it towards something else. But, the words healthcare are so exciting that most people just go with their gut on picking their benefits and move on.
Let’s talk about some options that could free up some money and allow you to be strategic in other areas of financial picture.
The goal isn’t just to save money on insurance! Sometimes the cheapest or best value isn’t always the best fit for your personality. You have to know yourself.
Have YOU considered high deductible health plans?
(Again the conversation already sounds boring, but fight through it… it can make a difference. I believe in you.)
Why You Should Do It: High deductible health plans cost less in premiums which means your out of pocket is higher, but you pay less per month. If you took the extra money you save monthly and put it into a HSA (Health Savings Account), you’re almost always better off.
The funds contributed to an account are not subject to federal income tax at the time of deposit.
Unlike a flexible spending account (FSA), HSA funds roll over and accumulate year to year if they are not spent. There’s no time limit, it goes with you if you leave your job and you’re building a long term health medical savings account.
That’s flexibility... aka the bedrock of any financial planning.
Why I Don’t Use One: It became a pain. We have regular medical things come up with three kids. If I were a single guy or married with no kids, I probably would choose a high deductible, but for my situation it was worth it to not have the headache. Oddly enough, it’s not always all about the money when it comes to financial planning.
It would have saved us some money… but it was driving us crazy! You have to know you.
Are you a detailed person who is administratively always on it? Are you a single person who rarely goes to the doctor? You’d probably be a great fit!
Choose the HSA and save it up; however, if you know you get overwhelmed with 6 different bills from the office then maybe that’s not a great fit. If you get so stressed out that it ruins your year, but you save some money then maybe it’s not worth it. That’s the way financial decision are sometimes.
What about when they mention company-provided Life Insurance?
The basic insurance your company gives you is fine when you’re young, but the older you get the more you need to consider additional plans.
Companies price their life insurance plans based on your age. If you’re 25 it’s super cheap to get life insurance through your company, but if you’re 65 the price will raise. They base it on the general health of 65 year olds, which means you might be paying a lot more for insurance than if you went to a private insurance company and bought private life insurance.
If you’re in really bad health and a private company would turn your down, then group insurance is awesome! You don’t have to go through medical records or a physical. Private life insurance gives you portability. Group life insurance isn’t very flexible.
Let’s Talk About some of the Extras and if it’s worth it
Extra’s in a nutshell: long-term disability is usually best to get through your company, life insurance is best bought privately and when it comes to health insurance the best bet is to know yourself.
I usually don’t purchase things like AD&D (Accidental Death and Dismemberment Insurance) because the odds of something happening are slim. This is why they make it super cheap, but it’s far better to take the money you would have put into a cancer policy or AD&D policy and put it into a private life insurance policy. Always ask yourself: What is the most flexible option?
wake up! It’s time for you to Rock Your Open Enrollment Meeting This Year!
Don’t plan to “get it over with” and check the box in the upcoming company meeting. Sit down and really think through your options and situation. Your decision can:
Free up your monthly budget.
Give you financial flexibility.
Help you move toward your dreams.
Winner! Still have questions? (AKA I feel asleep.) We would love to meet with you and help you with this and anything that could move you closer to your dreams.