It’s annual enrollment time. Yay, how fun, NOT!
I have about 10 choices to pick from my employer’s plan. That’s a bit absurd, but I guess it’s better than having only 2 or 3 choices. This year, I’ll sign up for self + child and Mrs. RB40 will get insurance from her employer.
The plans broke down to 4 basic flavors.
- CDHP – Consumer Driven Health Plan. The company pays the first $3,000 of medical expenses. Once the expenses exceed $3,000, then I pay a bridge of $1,800. After the bridge is satisfied, then there is a 10% copay for in-network providers. A Flexible Spending Account (FSA) is also available. FSA is pretax deduction that you can use toward medical costs, but you have to use it all in one year. Cost $52/month.
- HDHP – High Deductible Health Plan. First I pay $2,400 out of pocket. After that, I copay 10% in-network cost. HSA is available. HSA is a pretax deduction that you can use toward medical cost. Any money left at the end of the year carries over to next year and if I leave the company, I can take the HSA with me. Cost $0/month.
- Coinsurance Plan. First I pay $1000. Then 10% after that. FSA is available with this plan. Cost $47/month.
- Various Traditional Plans. I pay a copay for each visit. Cost from $133 to $160/month.
I’ve been using CDHP for the last few years and it seems to work well enough. If we stay under $3,000, then the only cost out of pocket is the $52/month fee. Vaccinations are covered for no additional charges to employee. This is great because the vaccinations probably cost over $1,000 this year.
Many young people like HDHP because if you don’t visit a doctor, then you don’t have to pay anything. The HSA is also a very nice benefit. I haven’t used it though, so I don’t know if you get any interest or anything on your balance. Some of my friends like not having to pay tax, but I’d rather use that money to invest.
The Coinsurance plan is new to me and it seems like a compromise between CHDP and HDHP.
I used traditional plans before, but the monthly fee has gone up quite a bit over the last few years so it’s not as cost effective as the consumer driver health plans. If I have a chronic health problem, I would pick the traditional plan.
For 2012, I’ll stick with CDHP. It worked pretty well for my situation and hopefully we won’t go over $3,000 next year. For 2011, we are already $400 over the $3,000 limit because I had a little unexpected procedure earlier this year. I contributed to the FSA so that $400 to the hospital is pre-tax $. All in all, I’m quite happy with how it works out so far. As long as I or baby RB40 do not have a big hospital bill over these last two months, the expense is acceptable.
Annual enrollment is also a good time to review your life insurance coverage. Now that we have a kid, I increased all my life insurance coverage to the max. Here are the payout numbers:
Life insurance – $930k
Accidental Death & Dismemberment – $814k
Business Travel Accident – $581k
So if my plane accidentally crashes on the way to a business meeting, then the family would get a cool $2.3 million dollars. Nice! It’s not a good feeling to be worth more dead than alive. I’d better work harder and accumulate more than $2.3 million dollars so Mrs. RB40 doesn’t get any bright ideas.
How about you? Have you calculated out how much you’re worth dead? (By an accident of course.)
Did you have fun with annual enrollment? Why must it be so complicated?
photo credit – flickr quinn.anya