Do you hear that? That’s the sound of money being wasted! There are about 2 months left to the end of the year and the start of a new insurance policy for many Americans.
So, we’re answering some frequently asked questions to make sure you get the most out of your policy and budget!
Question: I haven’t gotten close to reaching my deductible or out of pocket max – anything specific I should do?
Congratulations, you’re healthy! First, be sure to have your annual physical and ladies, get your mammogram (click here to read our recent about the importance of these things!). If you have vision and dental insurance, get your eye exam and cleaning. All of these preventive services are covered under most insurance policies, so if you don’t do it, you’re wasting your hard-earned cash!
Question: I need to have a non-emergency procedure that will cost some $$, and….
….I’m nowhere near reaching my deductible.
If it’s truly a non-emergency, don’t do it now – wait until the first of the year (or the beginning of your plan year). Let’s say you have it done in January instead. You’d have time to plan it, budget it, schedule it - and you could meet your deductible and/or out of pocket max in the first few months of the year, leaving the rest of the year’s medical expenses fully paid for by your insurance. At the least, the costs will go toward your deductible and out of pocket max for the rest of the year.
….I’ve reached my deductible
This doesn’t necessarily mean that every medical expense is covered from here! Be sure to look at your policy for the difference between your deductible and your out of pocket maximum. Then, get an estimate on the cost of the procedure to see if it makes sense to do it now or wait until next year. You’ll probably still want to have it done now since insurance will likely be paying for the bulk of it. To get a cost estimate on a procedure, ask around or use a Medical Health Advisor service with experts that can help.
….I’ve reached my out of pocket max?
Get it ALL taken care of before the end of the year since your insurance will be paying for it. A few tips:
**Tell your doctor you’ve reached your out-of-pocket maximum for the year and ask if there’s any follow-up care that can be booked and billed prior to 12/31.
**Book your procedure NOW! Many people are doing last minute procedures for this same reason - you could say it’s like Christmas for hospitals. If you can’t get a confirmed booking, ask to be on the cancelation list.
**Be sure to keep all your receipts and check with your tax preparer or accountant – high medical expenses can be tax deductible.
Question: I still have $$ in my FSA, so what?
FSAs (Flexible Spending Accounts) are a “use it or lose it” situation. In other words, if you don’t spend every dollar by 12/31 (or the end of your plan year), *poof* it all goes away. If you saved a little extra this year for a procedure and haven’t done it, NOW is the time.
If you have money in the FSA account but no foreseeable medical expenses to use it on, here are a few ideas: an extra pair of glasses, stock up on contacts, have some dental work done, refill some prescriptions, get a hearing test, try an alternative treatment like acupuncture or chiropractic, etc. Aetna has created a simple chart you can scan for other ideas on how to spend that money burnin’ a hole in your account!
Question: I still have $$ in my HSA, so what?
An HSA (Health Savings Account) can roll over to next year and the next year and so on. It’s like an IRA for your healthcare, so let it roll over and build up so it’s there when you really need it.
Since the money is tax-deferred, putting more into your HSA at the end of the year can be a good investment vs. paying taxes on it as income. Check with your tax preparer or accountant to see if it’s a good idea for you!
Question: I still have $$ in my HRA, so what?
An HRA (Health Reimbursement Arrangements) is a program some employers provide for employees. If you have an HRA, your employer probably adds money to the account each year to help you pay for healthcare expenses. Here’s the deal: that money is owned by your employer and you can only use it as long as you’re employed there.
Are you considering a job change? If so, use the money before you leave! Once you walk out the door, the funds are no longer available to you. If you’re planning to stick around at your job for a while, let it roll over to the next year and use it when you have more of a need.
Some employers specify which medical expenses the HRA funds can be used for, so be sure you know your employer’s rules (for instance, they could say they only want it used for medical expenses – vision and dental expenses are excluded).
What tricks do you have for getting the most bang for your insurance buck at the end of the year? Any tax tips you’d like to share? Comment below and let us know!