As the year comes to a close, many of us have money on our minds. Maybe you’re mulling how much to spend on gifts or how much to donate to your favorite charity. As you draw up your end-of-year accounts, one thing to consider is your health insurance benefits. If you’ve been putting off seeing your physician, optometrist, dentist or chiropractor, you may want to make an appointment before January. There are two reasons why December is a crucial time to plan for health care costs: 1) deductibles will reset in January and 2) it’s your last chance to use any money you’ve put in a Flexible Spending Account (FSA).
Understand your insurance coverage
Before you make any appointments, take a close look at your health insurance policy. Even if you’ve had the same provider for a long time, the details of your insurance coverage often change from year to year. Policyholders can expect to see variations in deductibles, co-pays or the percentage of costs covered. Take a look at the summary of benefits from your provider or contact them directly if you have specific questions about how your coverage may change next year.
Remember that your health insurance deductible will reset in January. If you’ve already met or are close to meeting your deductible, it’s likely worth scheduling a surgical procedure or other appointments before the deductible goes back to zero. Again, talking with your insurance company or reviewing the summary of benefits will help you understand the true costs.
Schedule dental work carefully
Dental insurance works a little differently than health insurance. While health insurance policies ask you to meet a minimum deductible before fully covering costs, dental insurance plans generally set a maximum amount they will pay each year. So, if you need dental work beyond a six-month cleaning, it’s important to schedule your procedure carefully. For example, if you’re already close to meeting your maximum, consider delaying your procedure until the next calendar year. On the other hand, if you anticipate major dental expenses, you may want to divide the procedures between this year and next (provided doing so wouldn’t negatively affect your health). For instance, if you need several fillings replaced, you can begin the work this calendar year and complete as much as will be covered by your dental policy. When your expenses reset to zero in January, you can get the rest of the fillings replaced.
Use up those FSA dollars
Many health insurance policies offer members the option of placing money pre-tax into an FSA or a Health Savings Account (HSA). The money that participants put into these accounts can only be used for health-related expenses. The range of services FSA or HSA dollars covers is quite broad: co-pays, prescriptions, first aid kits, hearing aids and more. You can also use this account to cover visits to medical professionals such as optometrists, chiropractors, physical therapists and dentists. That means if you’ve already hit your annual maximum in dental coverage, your FSA could cover the remainder of the costs.
There’s an important distinction between FSA and HSA accounts. While money in an HSA account can carry over from one year to the next, funds in an FSA account must be used within the calendar year—any unused funds will be wiped out. Some plans allow for a short grace period into the next year (usually up to 90 days), but the participant is responsible for planning their health care expenses accurately.
If you find yourself flush with FSA dollars at the end of the year, why not give yourself the gift of better health? Here are some ideas:
A better smile: While many cosmetic procedures aren’t covered, braces (including Invisalign®) are covered by FSAs.
New glasses: Visits to the eye doctor, glasses, contact lenses, reading glasses and prescription sunglasses are all covered.
New Year’s resolutions: If you want to quit smoking or lose weight, FSA accounts will cover expenses related to programs or products.
Fix aches and pains: If you tweaked your back hauling that 10-foot Christmas tree, FSA dollars can go toward visits to a chiropractor or physical therapist.
Sing Christmas carols in tune: Visits to the audiologist, as well as hearing aids and batteries, are approved expenses.
December is a busy time of year. The calendar quickly fills with holiday parties, school events and cookie exchanges. But as you make the most of the holiday season, don’t forget to make the most of your health care benefits, too.