Today’s post comes at you in the form of a PSA-style announcement. Even if you don’t have benefits, hopefully some day you will and it just makes good sense to have some kind of awareness of what you’ll be dealing with.
For a lot of companies, this is the time of year when open enrollment strikes. I won’t get on my high horse and rant about how people typically handle it like I did last year (though I feel the same way, trust me).
With the rise in health care costs and general economic woes, there has been a heavy increase in the interest in the High Deductible Health Plan (HDHP) and the accompanying Health Savings Account (HSA). No idea what I’m talking about? Here’s a quick rundown of the highlights:
- HDHPs have significantly higher deductibles (as the name suggests) than traditional PPOs and HMos that you need to reach before the insurance coverage kicks in
- Because your deductible is so high, the premium tends to be much lower than those PPOs and HMOs
- You can put money into an HSA on a pre-tax basis that’ll help you hit that deductible and pay for other health care stuff, but whatever you don’t use will roll over from year to year, accruing interest all the while (and in some cases, you can invest it if you choose!)
- Some employers (like mine) will contribute money to your HSA
Who does it work best for? Well, in my company, we have two core groups. The first is made up of those bullet proof 20- or 30-something singles who don’t ever have to go to the doctor. The second is the 55+ folks who are already maxing out their 401(k) and looking for another tax shelter – they can max out their HSA contribution and pay out of pocket for health expenses.
As we head toward the new year, like I mentioned, it’s generally a good idea to get more familiar with your benefits. Most non-HR people aren’t so entertained, but they do affect you directly, so it’s worth getting a little more knowledge about them.
Have any random benefit questions as we head toward the New Year? Drop me a line and I’ll be sure to answer them.