It’s open enrollment season for many healthcare providers and with spiraling premiums and deductibles, many employees may be looking to reevaluate their coverage. The one- to two-month period is the only time of the year –barring change in life status — employees can make changes to their healthcare plan.
Healthcare costs have increased by 33% since 2004, with the employee share increasing by 42%, according to Towers Perrin, a global professional services firm. The average corporate health benefit expenditure in 2009 will be $9,660 per employee, an increase of 6% over 2008 figures. The growth will make next year the fifth consecutive year of single-digit percentage increases.
If your insurance provider is cutting back while you are forced to pay more, don’t forget to look into a flexible spending account. “If you expect to spend the deductible, you can put money aside tax free [in an FSA],” says Devon Herrick, health economist at the National Center for Policy Analysis.
If the horrid specter of more deductions stands in your way, fear not. Since it’s pretax dollars, the deduction will bring you to a lower tax by the time Uncle Sam gets to your check. The difference in what you spend will be minimal. “Problem is, if you don’t use it you lose it,” Herrick says. Flexible spending account members have about a 75-day grace period at the end of the year.
For those who have access to a health savings account, there is a greater advantage. “It rolls over,” Herrick says. “That would be the way to set money aside because then you wouldn’t be forced to spend it.”
Also, check with your company’s human resource department to see what is available.
Renita Burns is an editorial assistant at BlackEnterprise.com.