Health insurance and your finances go hand in hand. With the cost of health care on the rise, it’s more important than ever to understand how health insurance coverage impacts your bottom line. And with open enrollment upon us, selecting the wrong health insurance plan could cost you big time—both in your physical and financial health.
Don’t just opt for the same plan.
Check in each year to make sure things haven’t changed. It’s not unusual for a copay or deductible to increase, so blindly electing the same coverage could lock you into an undesirable plan for a year. Revisit your plan to see if there have been any changes and pick the one that fits your health as well as your bottom line.
Consider a health savings account (HSA) or a flexible spending account (FSA).
These accounts allow you to set money aside to help with medical expenses like prescriptions or a trip to the dentist. Typically, contributions to these accounts are deducted pretax, meaning you’ll save more in the long run. However, check with your HR team to discuss the details of these accounts, like whether the funds roll over, what they cover, and how much you can contribute.
Plan for the unexpected.
Disability insurance is a benefit that could help you save because it covers your income in case you’re hurt or sick and can’t work. This coverage could really come in handy if you can’t work and need income to help pay bills. Cancer, critical illness, or accidental death and dismemberment insurance are additional types of coverage to consider, especially if you have a family history of certain medical conditions. Financial assistance for medical costs to treat an illness or potential accident could come as a big help in a time of need.
Consider your budget and health.
In general, plans with lower monthly premiums have higher deductibles, and plans with higher monthly premiums have lower deductibles. So if you choose a cheaper plan, your monthly cost for health care coverage will be relatively low. When you actually need services, however, you’ll end up paying more in medical costs. Think about your current and future health care needs, then pick a plan that provides adequate protection.
Nothing can ruin your finances like an unexpected emergency, but you also don’t want to get caught paying for unnecessary coverage. Talk with your human resources department to ensure you understand the different types of coverage and policies and consider what your current health care needs are. Doing this will best equip you to make informed health and financial decisions.