IT’S that time of year again. In a few weeks, if you have health benefits through work, you will probably receive e-mail messages and brochures from your employer about your benefit options for 2010.
Once again you will have to decide whether you want to switch to a new health plan. Or finally enroll in a flexible spending account. Or take that biometric test your company has been urging you toward. (More on that below.)
If, like many people, you typically default to your current options, I have one word of advice: Don’t. Health insurance costs will be higher, and doing nothing could potentially cost you hundreds of dollars.
My job today is to highlight the main trends this year in employee health benefits. Over the next few weeks, my colleague Walecia Konrad and I plan to delve into more specific elements of open enrollment, including the pros and cons of high-deductible health plans and how to select a new health insurer.
This year, as you face higher prices on insurance premiums, brand-name prescriptions and more, your employer will be nudging you to take more interest in managing your health and your health insurance. Sometimes those nudges might feel more like shoves.
What you probably won’t see are many major changes to your health plan’s overall design. That is mainly because employers are waiting to see what shakes out from the health care debate in Washington before they take any big cost-saving steps, says Mike Miele, president of the benefits consulting firm, GBS Healthcare Analytics in Princeton, N.J.
But here’s a rundown on the changes you probably can expect.
YOU’LL PAY MORE — AGAIN Health care costs keep going up and up, and the slow economy and rocky job market have not helped.
Last year, the recession jolted many employees into get-well-quick frenzies. Fearing layoffs — and the loss of health coverage — employees got check-ups, teeth cleanings and various long-deferred procedures at a higher-than-normal pace.
That use-or-lose stampede translated into a spike in medical costs for employers — which they are now passing on to those still fortunate enough to have jobs, according to Joan Smyth, a principal with Mercer, a health and benefits consulting firm.
If you are in an H.M.O. — a health maintenance organization — or P.P.O., a preferred-provider organization, your out-of-pocket costs, including premiums and co-payments, will probably rise by about 10 percent in the coming year.
In addition, many companies will raise deductibles by $50 to $100 — some even more.
DEPENDENTS? DEPENDS … Even if your spouse or other dependents have been on your health plan, be sure to look for changes in the coverage rules. Some companies are raising premiums for working spouses — or even eliminating coverage for spouses and dependents.
FEWER CHOICES Many large companies with employees in a number of states are consolidating their health plans into one or two national carriers, rather than various regional ones.
In the same vein, some companies will jettison inefficient H.M.O.’s and either replace them with more efficient ones or get rid of them altogether, replacing them with lower-cost plans, either P.P.O.’s or high-deductible plans.
PUSHING HIGH-DEDUCTIBLES More employers will be nudging workers toward high-deductible health plans because they cost less — about 20 percent less than a P.P.O. or an H.M.O. — and they force employees to take more responsibility for their health care.
Here’s a mini-refresher on how high-deductible plans work: Typically, they have a high annual deductible, of $2,500 to as much as $5,000. Many employers may put $500 to $1,000 into a health savings account for you to offset that high limit.
If you spend all the money in the health savings account, you then have to dip into your own pocket to pay your medical bills until you exhaust the deductible. But if you don’t spend the money, it stays in the account for next year’s expenses.
To push workers toward high-deductible plans, employers may raise the premiums on P.P.O.’s and H.M.O.’s even more than the underlying cost increase might warrant.
GOING GENERIC In another move to steer employees toward lower-cost health care, many employers will increase the co-payment on brand-name medications, while making generics more affordable. Some plans, in lieu of co-payments, may even require that you pay a percentage of the cost of brand-name drugs.
Let’s say you now make a $30 co-payment when filling a Nexium or Lipitor prescription. Next year, your co-payment could rise to $40 — or even higher if your plan requires you to pay a percentage of the actual cost.
At the same time, though, some plans may lower the cost of maintenance drugs (say, for asthma) that have been proved to reduce overall health costs, according to Tom Billet, a senior consultant at Watson Wyatt, a benefits consulting firm.
WELLNESS AND MORE Prepare to be doctored. Employers are determined to make you healthier and, thereby, less expensive to insure.
“Employers are not backing away from wellness programs,” Mr. Billet said. “They are a core component of their long-term strategy to control costs and improve productivity of their work force.”
Your employer will probably suggest that you (and your spouse if she or he is covered on your plan) fill out a detailed health risk questionnaire, including your height and weight and your family history for several diseases. The company might even reward you with cash or some other incentive for doing so.
Many employers are also strongly urging their workers to get biometric tests — blood work-ups that identify whether a person is at risk for diseases like diabetes or atherosclerosis.
The results of these tests and exams are sent to your insurer or a third-party administrator, and your employer is not supposed to have access to the information.
BEWARE THE AUDIT As another cost-saving strategy, more companies are conducting audits to ensure that only eligible dependents are covered by their health plans.
You may get an e-mail message or letter that asks you to verify the ages of your children or the marital status of you and your covered spouse. Completing the audit may be as simple as calling an 800 number and answering some prompts, or it may be as complicated (and annoying) as sending in copies of birth and marriage certificates to your insurer.
Remember, most policies cover your children only until age 19, or 23 if they are in college.
Why are companies going to all this trouble? Audits routinely reveal that 5 to 8 percent of covered individuals are actually ineligible, according to Mr. Miele, who expects his audit business to double in 2010.
Typically, the issue is one of confusion rather than fraud. “Employers have not done a great job of explaining who is covered,” says Mr. Miele, who adds that most of the people who get “kicked out” are college grads still living at home. You can also expect to see much more specific coverage guidelines in 2010.