End-of-Year Health Insurance Action Plan
The familiar saying, “Don’t put off until tomorrow what you can do today,” is a good one to remember as the end of another year approaches and many health insurance plans reset on January 1st. You can start by making a health insurance action plan to maximize your benefits before your deductible resets and out-of-pocket maximums restart.
Deductibles and Out-of-Pocket Maximums
Your deductible is the portion of medical expenses you are responsible for paying before your insurance will cover any applicable medical costs. At the start of every plan year, the amount paid on your deductible during the previous year resets to zero and the process begins again.
Your out-of-pocket maximum is the maximum cost you will pay during the calendar year once your deductible has been met. For example, your insurance plan may pay 80 percent of the cost of your care after you pay your deductible until you reach your out-of-pocket maximum.
End of Year Opportunity
“The last few months of the plan year are a great opportunity to schedule any procedure you’ve been putting off if you’ve reached, or are close to reaching, your deductible,” says Amy McCartan, senior director, Managed Care Contracting at Crozer Health. “If you wait for the beginning of the plan year, you’ll be on the hook to pay for procedures that would have been covered if you had them performed a few weeks or months earlier.”
Making the most of your coverage can save you money. If you’ve been thinking about having an elective (optional, or non-urgent) procedure performed, consider adding it to your end-of-year health insurance action plan. Common elective procedures include:
- Joint replacement
- Plastic and reconstructive surgery
- Hernia repair
- Removal of cyst (closed sac-like structure filled with fluid or semi-solid material)
- Screening colonoscopy
- Sleep study
Note: Some elective procedures may not be covered by insurance. Check with your plan for more information.
If you have not met your deductible and are not close to meeting it, consider waiting until the new plan year to have elective procedures done, if possible. Schedule more expensive procedures early in the year to meet your new deductible. That way, you’ll be covered for any healthcare costs during the remainder of the year.
“If you’re squeezing in a last-minute procedure for the year, be mindful that there may be secondary procedures, follow-up care, or physical therapy that won’t be covered if they come months later when your deductible has reset,” says McCartan. “It takes some planning and thinking ahead to take a look at your overall health and do your best to map out what, if any, care you’ll need in the near future.”
Flexible spending accounts (FSAs) provided through your employer are also “use them or lose them” benefits. Any pre-tax dollars set aside from your paycheck to cover eligible healthcare expenses must be used in the current calendar year.
Health Savings Accounts (HSA) have different rules. Money in an HSA account that is not used in the calendar year will be available for use the following year as well. Check with your insurance plan for more information about FSA and HSA accounts.
Planning End-of-Year Procedures
Scheduling elective procedures or surgeries at the end of the year may be easier than you think. “We see quite a significant increase in elective care procedures at the end of the year, not only due to people making the most of their benefits but also because people like to plan surgeries around the holidays,” says McCartan. Employers may be more flexible with granting time off, and you can save Paid Time Off (PTO) days by taking advantage of paid holidays.
Make sure to check with your insurance provider before planning or scheduling any end-of-year appointments or procedures to verify the status of your deductible or other specific requirements associated with your plan.
More information about financial obligations related to elective procedures is available in the Health Coverage Guide on Billing & Payment.