Choose a healthcare plan that's right for you
With all the healthcare plans available, it’s important to understand the options your employer may provide.
Understand the types of healthcare plans
Many employers offer just one type of health insurance. Others let you choose from two or three.
Here are the most common plans:
- Health Maintenance Organization (HMO). Often the least expensive option — and the least flexible. You choose a primary care physician within the HMO. Most nonemergency care that is covered by the plan must be administered by your primary care physician or another health-care professional within the HMO, based on a referral by your primary care physician.
- Preferred Provider Organization (PPO). Premiums might be higher than with an HMO, but you generally don’t need a referral from your primary care physician in order to see a specialist or other health-care provider.
- High Deductible Health Plan (HDHP). With lower premiums and higher deductibles, HDHPs are designed to protect against catastrophic health care bills. These plans usually include a provider network (similar to PPO plans). Your out-of-pocket medical expenses are typically lower when you visit participating PPO providers.
Things to consider when choosing a healthcare plan
- If you’re married, compare the terms of your healthcare plan to your spouse’s plan.
- If your employer offers a choice of health plans, make sure your preferred healthcare providers are included in the one you choose.
Try to manage healthcare costs
Research if your employer offers benefits that can help you manage healthcare costs, or provide extra income protection for you and your family. These options might include:
- Flexible Spending Account (FSA). An FSA allows you to set aside money on a pre-tax basis to pay for eligible health care or dependent care expenses. Look at your expenses for the past year to estimate how much you’ll want to put aside in the coming year. The downside of an FSA is that you lose any money you don't claim within the benefit period (usually 12 to 15 months).
- Health Spending Account (HSA). An HSA is available to any individual covered under a qualified HDHP. Contributions are not subject to federal income tax. HSA funds can be used to pay for qualified medical expenses for you and your dependents without tax or penalty.
- Life and disability insurance. Many employers provide a baseline level of life and disability coverage to employees. Look at the terms of the policies and decide if you need to supplement them with additional insurance.