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7 costly health insurance mistakes

1. Your doctor isn’t in the network

You’ll pay more to use health care providers who aren’t in your health plan’s network, so check to see if the doctors and other professionals you want are included.

A plan that tightly restricts you to a local network might be sufficient if you need care only in your area, but it won’t benefit a kid away at college or meet all your needs if you spend a lot of time on the road, says Pete Villemain, the president of Employee Benefit Services, which manages employer benefits plans.

Make sure any specialists you need are also covered by the plan, Rosen says. Don’t assume a specialist is in the network just because your primary care doctor gave you the name.

2. You pay huge insurance premiums to save a few bucks on the co-pay

“The mistake I see individuals make so many times is they focus so much on getting a low co-pay and they fail to look at how much extra premium they pay for it,” says Villemain.

He suggests evaluating how you’ll use your plan and comparing the costs accordingly. If you go to the doctor only a couple of times a year, is it worth hundreds of dollars extra on the premium just to get a lower co-pay?

3. The drugs you take aren’t covered

Some states require individual plans to offer prescription drug coverage, but in other states, many individual health insurance plans don’t cover drugs, says benefits consultant Michael Goodheim of Farsighted Strategies in Seattle.

If the plan provides prescription-drug coverage, check to see if your medications are included on its formulary, which lists the preferred drugs for coverage, Goodheim says. Expect to pay more if you take a drug that is not listed.

4. You’re overinsured

In addition to comprehensive health plans, many employers offer supplemental insurance policies, such as cancer or critical illness insurance, that pay a lump sum of cash after diagnosis. Such policies can provide valuable protection, but they might be unnecessary if you already have broad coverage under your medical insurance and short-term and long-term disability insurance, Goodheim says.

5. You can’t afford your share of the medical bills

Low premiums are an attractive feature of high-deductible health plans, but make sure you’re prepared to pay all the out-of-pocket medical expenses, Goodheim says.

Besides the deductible, check the maximum out-of-pocket expenses you pay. After you pay the deductible, many plans pay only a portion, such as 70%, of covered medical expenses. Your 30% share is called co-insurance, which you must fork over until you reach the cap on out-of-pocket expenses.

“Those dollars can really add up,” Goodheim says.

6. You’re expecting, but your policy doesn’t cover maternity care

Most employer-sponsored plans cover maternity and prenatal care, thanks to the federal Pregnancy Discrimination Act of 1978 and the Health Insurance Portability and Accountability Act of 1996, as well as many state health insurance mandates for group coverage. Some states also require individual health insurance plans to include maternity coverage, but in states where there is no such mandate, many individual health plans pay only a small portion of the costs or don’t cover maternity at all. Even if the plan includes maternity coverage, read the fine print to know exactly what is covered and whether there’s a monetary cap.

Starting in 2014, individual and small-group plans sold through state health insurance exchanges must include pregnancy and newborn care, along with other essential benefits.

7. You don’t check your health plan for changes

Scrutinize group health plan offerings from employers each year during open enrollment, Rosen says. Don’t assume the plan is still the same. Coverage levels, costs and networks could change from one year to the next, even if the plan is offered by the same insurer.

“If you’re not sure about something and it raises a flag in your mind, then check it out,” Rosen says.

This is the choice more and more small businesses are facing

According to a recent survey by the National Small Business Association, about 10% of small businesses are eliminating health insurance coverage over the next year. It’s either health insurance or jobs.

This isn’t the first decline in health insurance coverage over the past year. Only 38% of small businesses are providing health insurance coverage, down from 61% in 1993. About 19% of small businesses are planning on stopping coverage within the next 5 years.

Sheryl Weldon, owner of Texas-based Commerce Welding & Manufacturing Co. dropped coverage in December after seeing health insurance premiums for her employees increase by more than $600 a month in the last five years. Five years ago, Weldon was paying $200 per employee per month and this year premiums skyrocketed to more than $800. Premiums typically increase 8% to 16% a year for small businesses.

Kelly Reeves, president of KLR Communications, canceled health insurance for her three employees. Reeves said she had to choose between cancelling health insurance coverage and laying off an employee after losing a client that accounted for 50% of revenue.

Due to small businesses canceling health insurance coverage, more and more people are becoming uninsured. According to a report released by Families USA this year, approximately 86.7 million Americans were uninsured between 2007 and 2008. The report also found that nearly 75% of those uninsured were without health insurance for at least 6 months and almost two-thirds were uninsured for more than 9 months.

2009, a new President, and new health care buzz words are upon us. As one of the Principals of HealthPlanOne, Inc. (HPOne), we find ourselves in a perfect place to help so many people, and businesses nationally that have been subject to the wrong side of the bargaining table with insurance carriers.

Do you know how much your broker is earning in commissions on your benefits package? Is it worth the amount of work they do for you? Do they lower their fees/commissions when the amount of work they do diminishes, or do they continue to earn more and more as your premiums creep up?

These are all questions we have asked, and the answers have been disappointing lots of the time. Many brokers promise IT solutions, HR portals, and other services that you “pay for” and either never use, or they are never implemented. Does your broker then reduce fees? Probably not.

If you have not visited Health Plan One, you must. Whether searching for solutions to the part time staff you have, or to reduce dependent coverage, you owe it to yourself to check with us. All of the normal “blocking and tackling” of a benefits broker is the simple stuff, and we do that as well as anyone in the business. HPOne will do more work for you, for less commissions and will always keep its fees in line with your expectations. This is something ALL brokers neglect to bring to the table.

Please let me know if we can help in any way. As one of the fastest growing web brokers in the United States, and funded by 2 of the most well known venture capitalists in the world, we are here to help, when promises do not come true. We also have several former CEO’s on our board of directors that assist us when we must apply necessary leverage in the insurance marketplace.

Get what you pay for, choose HPOne.

-Chris Efthymiou

Small Group Business