Ask About Your 2012 Health Benefits

Many U.S. employers will drop a bunch of health-care options in their workers' laps in the next few weeks, if they haven't already. If you're one of those workers, unless you change jobs or lose your job, the choices you make will stick with you and possibly your family for all of 2012, so it's important to scrutinize and compare health-plan options.

You may be tempted to automatically re-enroll in the same plan you have now, but that could cost you. Many plans are shifting costs and benefits around and some employers have introduced new ways for workers to save money, experts say.

"If an employee blows off open-enrollment communications, the employee could pay more because they're missing incentives to pay less that are tied to participation in wellness activities," said Eric Parmenter, vice president of consulting for High Roads, a benefit consulting firm in Nashville, Tenn.

For next year, employers generally aren't as interested as they've been in recent years in raising workers' premium contributions, but they're finding other ways to pass on higher health-care costs, said Michael Thompson, principle in human-resource services at PricewaterhouseCoopers in New York.

"There's not as much focus on increasing premiums for workers as much as there is on increasing the amount of cost-sharing workers have at the point of service," he said.

People who use their health plan might feel more of a squeeze than those who don't, said John Asencio, senior vice president of Sibson Consulting, a human-resource consulting firm in New York.

"If you had a $15 copay, you'll probably see those go up to $20, $25 for physician office visits," he said.

The good news is underlying benefit-cost increases are expected to be moderate, compared with earlier in the 2000s when double-digit premium spikes whipsawed employers and employees alike.

Though they still far outpace general inflation and workers' wage gains, health-benefit costs are on track to rise 5.4% on average next year, the lowest rate of increase in 15 years, according to preliminary survey data from Mercer, a consulting firm in New York. If employers did nothing to manage the cost increase through plan-design changes, the increase would be 7.1%. The overall trend of the past five years has been about 9%, according to Mercer's findings.

Use of health-care services declined last year as people were left with less disposable income in a struggling economy and more workers faced higher out-of-pocket medical costs, said Beth Umland, director of research for health and benefits for Mercer in New York.

"If money is tight and you've got a $1,000 deductible, you might think twice about going to the doctor if you also think you could put it off," she said, noting the average deductible has doubled in the past five years.

Here are five bottom-line questions to consider as you compare your 2012 options:

1. What's new this year? As part of the health-reform law that kicks in more comprehensively in 2014, most employers already extend coverage to workers' adult children up to age 26 even if they're married or in school. And they have to offer free preventive care for a number of services such as colonoscopies and mammograms. For 2012, many employers are offering what are called consumer-driven health plans, which have high deductibles and often attached savings accounts. They're trying to control costs before 2014, when they have to extend coverage to part-time workers putting in at least 30 hours a week, among other anticipated costs, Umland said.

For 2012, the minimum annual deductible required for high-deductible health plans to be coupled with health savings accounts (HSAs) is unchanged at $1,200 for self-only coverage and $2,400 for family coverage. But the annual maximum for workers' out-of-pocket expenses is going up $100 to $6,050 for single coverage and rising $200 to $12,100 for family coverage next year, according to the Internal Revenue Service. Out-of-pocket expenses include deductibles and copays but exclude premiums.

Workers with HSAs for themselves only can contribute up to $3,100 to their accounts in 2012 compared with up to $6,250 for workers with family coverage in a high-deductible health plan. Those limits are slightly higher than for 2011.

2. What would the plan cost me? If your plan is shifting to coinsurance, where you pay a percentage of the total instead of a flat fee, you may have to think differently. "If you had a $10 or $20 copay, it was easy to understand what it was going to cost you when you went to the doctor," Thompson said. "If the plan now has coinsurance and a deductible, that visit may cost over $100 if you haven't met your deductible."

In making a total estimate of what a plan might cost you, first take stock of the premiums, the amount you contribute each month out of your paycheck, which will likely be higher for more a comprehensive benefit plan than for a bare-bones one. The second part relates to your out of pocket costs. For this, consider your recent history of health services. If you see a doctor or need blood work drawn frequently, for example, your copay or coinsurance amounts could make a big difference in your overall spending projections.

Next, if you're considering a health plan with a savings account such as an HSA, factor in what, if anything, your employer contributes to that account that may offset your costs. Your monthly premiums will likely be lower, but don't forget unpredictable and intangible costs. "How much am I saving for sure vs. how much might I lose if I actually use the plan?," Umland suggested asking. Plus, are you OK with managing another financial account? Try to find out how many extra administrative tasks you may need to do to use the HSA funds. Some offer debit cards you can swipe, but others may force you to submit and track claims for reimbursement.

3. What happens if I get really sick or injured? Try to run a worst-case health scenario under each of the plan options to see how financially exposed you would be among them should you or one of your covered dependents have a grave accident or illness. Know what expenses are counted in the out of pocket maximums. "How much would I be out of pocket in this option vs. this option if I suddenly need $50,000 worth of care?" Asencio said.

4. Are my meds covered? If you're on maintenance medication for a chronic illness, check to see if any plans will waive your copay or coinsurance on certain prescription drugs, making them effectively free to encourage you to keep taking them, Thompson said. You may have to talk to a health coach or participate in a disease-management program to get the free meds, but more employers are trying this option to get a handle on their long-term health costs. Some plans also offer a separate out of pocket maximum for prescription drugs, he said.

5. Am I leaving money on the table by failing to participate in wellness programs aimed at making or keeping me healthy? Whether it's a game-oriented workplace exercise competition, private dietary counseling, talking to a health coach or taking classes to help you quit smoking, you may not be able to afford to ignore your employer's 2012 wellness offerings. "While these programs have been around for a while, employers are really taking them seriously now as a way to manage costs," Umland said.

You may not have to do much work to score a break on your health-care costs. In fact, some employees may end up paying $25 to $50 more in premiums per month or hundreds of dollars more in deductibles if they don't complete a health risk assessment or other activities meant to gauge their general health status, Asencio said. "Companies are getting more aggressive around these issues."