Take closer look at health plan this year

BALTIMORE -- Many workers during open enrollment usually stick with whatever medical plan they had the year before, but health care reform may change that.

About two-thirds of consumers recently polled by insurance giant UnitedHealthcare said they will look more closely at their choices during enrollment season thanks to the debate over the new law.

This extra level of scrutiny can pay off. If you don't look into the details, you might be tempted to go with the plan with the lowest premium. But that might not be the cheapest in the long run if it requires you to pay more for prescription drugs or other benefits you regularly use.

Open enrollment season usually occurs in the fall. Employers haven't made major changes this season, largely because of uncertainty on how the health care law will shake out, benefits experts say. Still, you may expand coverage after seeing the impact of reforms that kicked in early. Employers also are continuing wellness efforts to encourage you to stay healthy.

And you likely can count on health care costs going up, and more of the burden being shifted to you

A study by benefits consultant Aon Hewitt last month found that average overall health care costs are expected to rise nearly 9 percent to $9,821 for each employee next year. Workers on average will pay $4,386 in premiums and out-of-pocket costs next year, up $486 from this year.

Here are some things to look for as you select a plan:

HEALTH CARE REFORMS: Several reforms that took effect last month won't be felt until the new plan year, which for many starts in January.

Under the new law, for example, preventive care, such as mammograms, immunizations or prostate screenings will be 100 percent covered. Your share of the cost won't be higher if you go outside your plan's network of doctors and hospitals in emergencies.

And young adults will be able to stay on a parent's plan up to their 26th birthday. An adult child doesn't have to be financially dependent on the parent or even live in the same state. These children also can be married and on the parent's plan, although their spouses won't be covered.

As always, there are exceptions.

Employers have the option of maintaining a "grandfather status" for one or more of the plans they offer, said Melissa Jimeno, a principal in benefits consultant Mercer's Baltimore office.

This allows them to postpone certain reforms until the entire health care law takes effect in 2014. The hitch: Grandfathered plans can't significantly raise employees' deductibles and out-of-pocket limits or substantially lower the employer's contribution.

A Mercer survey of nearly 1,100 small-to-large employers in July found that a little more than half expected their plans to be grandfathered. But that number may drop after employers calculate insurance costs and how much they are willing to absorb on their own, Jimeno says.

Your employer must tell you if the plan is grandfathered. Among the consequences: The new preventive care and emergency services provisions won't apply, and young adults don't have to be permitted on a parent's plan if they can get insurance at their own job or a spouse's.

FLEXIBLE SPENDING ACCOUNT: For years, you could set aside pre-tax dollars in this account and use the money to buy over-the-counter drugs, such as cough syrup or pain relievers. Health care reform changes this, even in grandfathered plans.

Starting next year, you must get a doctor's prescription for over-the-counter drugs if you want to get reimbursed, said Timothy Morgan, a director with CBIZ Benefits & Insurance in Columbia, Md. This provision also applies to health savings accounts and health reimbursement accounts where tax-sheltered money is set aside to pay health care expenses, Morgan says.

Here, too, there are exceptions. For example, you won't need a prescription to buy insulin, denture adhesives, first aid supplies and contact lens solution, Morgan said.

Be aware, too, that if your flexible spending account comes with a debit card, you won't be able to use it to buy over-the-counter drugs, Jimeno said. In these cases, you will have to submit a separate claim because of the prescription requirement.

INSURANCE LIMITS: Health care reform eliminated the cap on lifetime benefits starting with new plan years as of late last month. It also gradually phases out annual caps over a few years. The annual limit for the new plan year can't be less than $750,000. This applies to grandfathered plans, too.

THE MORE, THE COSTLIER: Under family coverage, couples often pay the same rate if they have two children or two dozen. That's changing. A small number of employers are adding more tiers to the family rate, such as charging extra for every child, Jimeno said.

This is expected to become a trend in the next couple of years.

Employers are looking for ways to lessen the cost of more young adults enrolling in the plan because of the health care law, Jimeno said.

But Karen Frost, a benefits expert with Aon Hewitt, says employers see this as a fairness issue. Two workers can earn the same salary, but the one with kids ends up receiving more in total compensation because the company contributes a higher sum toward the family's insurance, Frost said.

WELLNESS PROGRAMS: Employers for years have been luring workers with gift cards or cash rewards to fill out a health questionnaire or enroll in a disease management program so they stay healthy.

"Now, they're ready to take it to the next level," Frost said.

It may be a little more stick than carrot. Workers, for instance, might have to pay more for insurance if they don't fill out a health risk assessment, Frost said.

Men's clothier Jos. A. Bank added a wellness program in April.

The Hampstead, Md.-based retailer's annual insurance costs have been going up by double-digit percentages for the last few years, and the company wanted to get employees more involved in curtailing costs, said Bob Hensley, executive vice president of human resources.

Employees earn points by doing certain activities, such as getting a flu shot, exercising or enrolling in a smoking cessation program. As they rack up points, their premiums go down. It's possible for workers to accumulate enough points so that they will pay less for insurance now than a year ago, Hensley said.

As you shop for a plan this season, consider how you have used insurance in the past. Don't just look at the premiums.

"It's important to look at what your maximum out-of-pocket costs can be," said Cheryl Fish-Parcham, deputy director of health policy at the advocacy group Families USA.

Check the deductible and whether you can afford to pay it, she said. Look at co-payments and calculate how much you could end up paying if you get sick. And don't overlook how much you might have to contribute toward prescription drugs, mental health services or other benefits you routinely use.