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Better Together: Keeping Families Under One Health Benefit

When it comes to household budgets, the general goal is to lower monthly expenses. If you find a better option for something, you make the change and save money. Pretty simple, right? Well, not always. Did you know that two thirds of bankruptcies in the U.S. are related to medical expenses? While there are several uncontrollable factors in this, one factor that can be managed is keeping families all on one plan.Many people take insurance offered by their employer instead of joining what’s available through their spouse’s employer, or vice versa. This strategy, however, results in the doubling of family exposure without even knowing it. Below are steps to evaluate spousal plan options in order to keep your family’s overall exposure as low as possible.

1. Look at the Summary of Benefits for both plans

If you feel confused by your Summary of Benefits, you’re not alone! A recent study showed that 96% of Americans struggle to understand insurance terms like this. 

Thankfully, there is one standard SBC form you can learn. Once you get the hang of it, you’ll be able to more accurately compare both plans side by side.

2. Calculate your worst year

The next thing to do is calculate your “worst” year for each plan. This means you’ll want to find the total amount your family could spend during your worst medical year. 

Start by reviewing how much these three monthly options would cost: everyone on your plan, everyone on your spouse’s plan, or splitting between the two.

Next, we want to look at your max-out-of-pocket amounts. This is not your deductible. That number is misleading because your actual risk is in row 5 on that standard summary of benefits form from above.

Go through those three options again: everyone on your plan, everyone on your spouse’s plan, or splitting between the two. Add those numbers to the total monthly costs to determine your worst medical year.

When you look at the amount of risk you could eliminate by increasing your monthly expenses, you will see that the cheapest option is not always the best option.

3. Confirm the “rules” to join either plan

There are two potential problems with combining you and your spouse on the same healthcare benefit.  

The first problem is what’s called a spousal carve out. This means, with some employer-sponsored plans, a person cannot join their spouse’s plan if they are offered a plan by their employer. If this is the case, then you won’t be able to consolidate healthcare plans.

The second problem are spousal surcharges. Though the provider may not refuse a spouse (who is offered a plan by their employer) to join their spouse’s plan, they may add an extra charge to discourage this decision.

While these instances do not always affect everyone, it’s imperative to confirm this information before you start making plan decisions.

4. Verify open enrollment dates

Often, open enrollment dates vary from plan to plan. Many healthcare benefits are open for enrollment in the fall for January 1 effective dates, but not all of them. Make sure you check the enrollment timeline for the plans you’re comparing; it’s possible you have missed the deadline.

If you’re unsure, be sure to reach out to your HR representative or the person who oversees healthcare options at your employer and ask for those dates along with all the rest of the details for the plan (costs, summary of benefits, network, etc).  

Timing is everything when it comes to changing plans, so pay close attention to those details in order to avoid going uninsured!

5. Get your Special Enrollment Period (SEP)

If you missed the enrollment deadline, you won’t be able to make changes to your employer-sponsored plans until the next enrollment period rolls around. However, there are some scenarios that can actually qualify you for a Special Enrollment Period (SEP).

These scenarios are called a Qualifying Life Event (QLE), which then opens up an SEP for you. Things such as marriage, the birth of a child, death in the family, etc. can open up the chance to re-evaluate your choices.

One common QLE that we currently see in the U.S. is the large number of layoffs. As a result, many are losing their existing healthcare coverage. Thankfully, they have 60 days to start looking at new options. 

6. Determine what’s best for your family

People often think that a plan is “bad” if it doesn’t have copays for a doctor visit, or they think a plan is “good” because it’s a PPO instead of an EPO. 

The reality is, you can actually save money (tax-free) and pay your medical bills (tax-free) with that HSA plan that doesn’t have a copay and saves you money each month. And as far as EPO’s go, sometimes you can actually keep your doctor and pay less than your typical PPO.  

The point is that healthcare is not one-size-fits-all. The plan option that works best for your family may look different than it does your neighbors. 

Once you start walking through all of these steps, you will develop a full picture of what best suits your family. Maybe at the end of the day, staying on the same plan is still best for you. But maybe you are sitting on something better without even knowing it?

Pro Tip:  While it is generally not best for families to be on separate plans, when it comes to Medicaid, Medicare, and certain sharing ministries, it can sometimes be advantageous to mix those options. But be sure to connect with an expert to learn more about the details or about your spousal plan options.