Marriage tips you likely don’t know
Few couples consider about how health insurance factors into their future. However, you need to know that marriage can add an extra layer of complexity to health insurance choices, and the right health plan can help a life-long partnership get off to a financially solid start.
eHealthInsurance.com provided the following FAQs for newly engaged couples about health insurance. Many of these tips can help you and your spouse save a bundle of money:
Question 1) “Neither of us currently have health insurance. What are our options?”
Answer: First of all, don’t go uninsured. Health insurance is about more than getting access to medical care when you want it. It’s also about limiting your financial liability for medical costs. With the cost of medical care on the rise and medical bills among the most common reasons for personal bankruptcy1, a quality health insurance plan can help provide the financial security you need.
If neither of you are currently eligible for employer-sponsored health insurance, consider buying individual or family coverage on your own. In most states you’ll find lots of individual and family health insurance options to choose from, with a broad range of deductibles, copayments, and monthly premiums. It may be more affordable than you imagined. A recent survey2 conducted by eHealth, Inc. found that two people covered under a family plan pay an average of $328 per month for coverage – and in many states quality health insurance plans are available for substantially less.
If you discover that you cannot afford health insurance at all, we recommend that you contact the non-profit Foundation for Health Coverage Education to learn about the government-sponsored options available. Visit them online at www.coverageforall.org.
Question 2) “Isn’t it always best to add my spouse to my employer’s health insurance plan?”
Answer: Not necessarily. Covering both of you under an employer-sponsored group health insurance plan is a popular solution. But you may want to do a little research first. Talk to your Human Resources department or benefits administrator and find out how much your employer contributes towards monthly premiums for dependents. (It’s often substantially less than they contribute for employees.) Then take a look at quotes for individual and family health insurance policies in your area. How do monthly premiums for individual or family plans compare to the amount that would be taken out of your paycheck? How do the deductibles and copayments compare? Which plans cover the services you value most, and which would require you to pay for benefits you’ll never use? Those are the kinds of question you should ask yourself.
Talk with a licensed agent like eHealthInsurance for more help understanding your choices. You may find that it makes more financial sense – and better meets your coverage needs – to cover one or both of you under an individual or family health insurance plan rather than through an employer plan.
Question 3) “Does it ever make sense to keep separate health insurance plans?”
Answer: This is a little like the question of whether or not newlyweds should keep separate bank accounts. It works for some people. Being covered together under a single health insurance policy isn’t going to strengthen your relationship or prove your love for one another. In fact, you could save money by going separate ways for health insurance.
In the previous question we’ve already identified one scenario in which it might make sense to keep separate health insurance policies. But even if neither of you have employer-sponsored coverage options, it may still make sense to apply for separate individual health insurance plans. Get quotes for health insurance plans in your area and compare your options. And ask yourself: do you both need the same kind of coverage? For example, if maternity or chiropractic or prescription drug benefits matter for one of you but not the other, then mixing and matching health policies might help you save money.
Question 4) “We’re planning to start a family right away. Does that change the way we should look at our coverage options?”
Answer: Yes. Not all individual and family health insurance plans come with maternity benefits. Some states require it, but others don’t. And you may find that some plans offering maternity benefits only allow that coverage to kick in after you’ve been on the plan for six months or more. When reviewing your health insurance options, make sure to find a plan that provides maternity coverage you can afford. How much will pre-natal care cost you? What will your labor and delivery costs look like? If you have questions, talk to a licensed agent to help you understand how specific health insurance plans distribute these costs.
The other thing you’ll want to look at is sometimes called “well child” or “well baby” care. This is preventive care for the baby and may include everything from checkups to immunizations. If you’re going to add the newborn to your individual and family plan, you’ll want to make sure that medical care for junior is affordable.
Question 5) “Can we combine our health insurance policies without medical underwriting?”
Answer: If you’d like to add your spouse to your employer-sponsored group health insurance plan, no individual medical underwriting is required. If you’re worried about being declined for pre-existing medical conditions, you can breathe easy. No one can be turned down for coverage under a group health insurance plan for that reason. Talk to your Human Resources department or benefits administrator about adding your spouse to your plan.
However, if you’re both covered under separate individual health insurance policies that you bought on your own, even if they’re with the same insurance company, the answer is, “Probably not.” Call your health insurance company to find out. In most states, applicants for individual and family health insurance may be declined coverage based on medical history. If this is a concern for you, talk to a licensed agent to learn which insurance companies may be more flexible in their approval standards. You may be able to find something that works for you. If not, consider the government-sponsored options available in your area. (See the answer to Question 1 for more information on where to turn for help.)
Question 6) “What if we currently each have our own individual (that is, not employer-based) HSA-eligible health insurance plans?”
Answer: Consider your options carefully. There could be a modest benefit in covering both of you under a single HSA-eligible health insurance plan, but there are risks as well.
First the benefit: In 2010, individuals covered under HSA-eligible health insurance plans can fund their Health Savings Accounts up to $3,050 for the year3. With separate HSA-eligible policies, then, you and your spouse are eligible to fund your Health Savings Accounts to a combined total of $6,100 for the year. These funds can be used to help offset the cost of annual deductibles or pay for other qualifying medical services on a tax-deductible basis. By contrast, if you’re both covered under a single HSA-eligible family plan, you may contribute up to a maximum of $6,150 for 20103. That’s a modest gain of fifty dollars.
However, there are risks involved in shifting from separate HSA-eligible plans to a single HSA-eligible family plan. First, in order to apply for a new family HSA-eligible plan, you may have to undergo medical underwriting. If one or both of you have been diagnosed with a medical condition, there’s a chance you could be declined for coverage.
Second, most HSA-eligible family plans don’t split out deductibles individually, like standard family plans, but require that the deductible for all family members is met before the health insurance company begins paying for covered medical expenses. What this means is that if one of you is more likely to receive a lot of medical treatment this year, you may be able to save money by keeping separate HSA-eligible health plans.
An example might help make this clear: Say you have separate plans with deductibles of $3,500 a year each. If your spouse sees the doctor more frequently than you and fulfills his or her deductible, the health insurance company will begin paying claims regularly after that first $3.500. However, if you’re both covered under a single plan with a deductible of $7,000, you’ll have to pay the full $7,000 out of pocket before the insurance company begins to pay on claims for either one of you.
1 SOURCE: American Journal of Medicine, August 2009: http://www.amjmed.com/article/S0002-9343(09)00404-5/fulltext
2 SOURCE: eHealth, Inc.’s 2009 Report: The Cost And Benefits Of Individual And Family Health Insurance Plans Report:http://news.ehealthinsurance.com/pr/ehi/document/Cost_and_Benefit_Report_2009.pdf
3 SOURCE: http://hr.blr.com/HR-news/Benefits-Leave/Healthcare-Benefits/IRS-Sets-2010-HSA-Contribution-Limits/