NEW YORK (MONEY Magazine) -
Fall is open-enrollment time, your once-a-year opportunity to switch your health plan and sign up for other valuable benefits.
Pay attention. Chances are the insurance plan you have is changing (and costing more). And like it or not, you now have more choice when it comes to allocating the growing portion of your paycheck that goes toward medical expenses.
Here's how to spend those dollars wisely.
Review your health plan
- Workers pay twice as much for health insurance as they did four years ago -- an average of $1,481 a year vs. $733 in 2001, according to Hewitt Associates.
- You may see co-insurance instead of co-pays, which means you pay a percentage of the cost of care, not a flat $10 or $20 per doctor visit.
- More tiered networks of doctors and hospitals -- each tier carries a different out-of-pocket cost for you.
- To lower your premium, you may have to pick a plan with a high deductible ($1,000 or more).
The good news More insurers are covering 100 percent of the cost of preventive care.
Best move Don't automatically pick the lowest premium or assume the most expensive plan will give you the best coverage. Many employers provide an online tool that lets you find a plan that matches your needs. Use it.
Consider an HSA
What's new Two years after Congress created health savings accounts, these tax-sheltered plans are starting to show up at work.
A Buck Consultants survey forecasts that the number of employers offering HSAs will quadruple to 32 percent in 2006.
How it works To be eligible for an HSA, you must have a high deductible insurance plan ($1,000 for singles, $2,000 for families).
You can save up to $2,650 a year ($5,250 for families) and withdraw the money tax-free for health-care expenses -- or let it keep growing. You don't owe taxes on contributions. If you leave your job, you can take the HSA with you.
Contribute to an FSA
- You're healthy.
- You have low yearly medical expenses.
- You want to save more money tax-free.
What's new Previously you had to use your flexible spending account money by Dec. 31 or you'd lose it.
A recent Treasury Department ruling extends the deadline to March 15, all the more reason to set aside pretax dollars for out-of-pocket health-care or child-care costs. The catch: Your boss must change your plan rules as well.
Best move Start by saving a small amount, say $500, that you're confident you'll use up.
Fund a Transit Account
How it works You can save up to $105 a month to cover the cost of commuting on public transportation and $200 a month for parking. The money can be rolled over to the next year if you don't spend it.
Why now more than ever With gas hovering around $3 a gallon, you need all the help you can get with transportation costs.
Click here for more of our special report, "Your Job 2005."