By Anne Kates Smith, from the September issue of Kiplinger's Personal Finance
If you're lucky enough to still have a job and benefits to choose from,you may soon find a stack of paperwork on your desk courtesy of thehuman-resources department. As open-enrollment season arrives, resistthe urge to default to last year's selections, especially when it comesto health insurance.
Choose carefully because your costs will likely rise again thisyear, from 7% to 12%, according to Sara Taylor, at Hewitt Associates.The old rule of thumb -- that employers pick up 80% of premiums and youpick up 20% -- is now closer to a 70-30 split, says Scott Ziemba, asenior consultant with benefits giant Watson Wyatt. With higherdeductibles and co-pays factored in, you're approaching 60-40.
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That's reason not to gravitate toward the "Cadillac" health-careplan -- the one that covers everything, has the lowest deductible andreimburses the most. A plan with lower premiums that comes with ahigher deductible and higher co-pays -- especially one that's coupledwith a tax-advantaged health savings account -- keeps more money inyour pocket each month and may prove sufficient for your medical needs.These days, more such plans cover up to 100% of preventive services,such as physicals and immunizations.
Take advantage of more freebies this year, plus incentives to stayhealthy. You may get discounted premiums or a gift card in exchange forundergoing a health-risk assessment or for participating in programs tostop smoking or step up exercise, for instance.
Expect your spouse to be asked to undergo a risk assessment, too, ifhe or she is covered by your plan, and don't be surprised if the planis audited to weed out ineligible dependents. Health-care reform mightresult in some bennies being taxed, but probably not next year.
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