If you haven’t heard of it yet, you may in the future. This type of plan is most commonly offered from employers who offer insurance with high deductibles. It will probably be used more often in the future because it is more affordable. I had never heard of it until my husband’s employer gave us this choice. It is more flexible and less expensive per check. So we weighed our options to see if it was worth it for us since we have five children. Here is how it works:
At the beginning of the year, a health fund is set up for you to use for health expenses throughout the year. You can use this money for anything that is health related, including prescriptions. You can’t go over the amount that is in your fund. Most of the time, preventive care is covered automatically so it doesn’t count toward your fund. Because you need to watch every dollar that is spent, you would probably be more cautious about going to the doctor. Once the money is all spent in your fund, you will need to pay for the remaining expenses yourself until you meet your deductible.
Most of these plans require a deductible that you need to meet. If you meet your deductible and use all of your fund money, the expenses will be covered at 100%. Once you meet your deductible and if your company offers in network providers, you will usually have nothing to pay out of your pocket for the remainder of the year, but if you use an out of network provider, you will be expected to pay a percentage of the charge.
If you are offered this type of insurance, there are a few things to consider. You may want to think about the year before and how much you had to spend on health care. Estimate how much you think that you would spend in health care this year, keeping in mind that if you have children at home this year but didn’t last year, you may spend more. Compare how much your estimate is with how much you are allowed in your health fund. This should help you determine if this kind of plan would be right for you.
Always remember that health insurance that is offered through an employer will usually have what is called Open Enrollment one to two times a year. This is a certain time that you have to change your policy or to enroll or close your current policy. Ask questions if you are not sure.
Families.com Blogs are for informational purposes only. Families.com assumes no responsibility for consumer choices. Consumers are reminded that it is their responsibility to research their choices properly and speak to a certified insurance professional prior to making any decision as important as an insurance purchase.