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Annual Benefits Enrollment: My Cost Increasing 10%

This article was written by in Career and Work. 19 comments.


The open enrollment period for my company’s 2010 benefits came to a close yesterday. My procrastination came to an end when I logged into our benefits management website, reviewed the options one last time, and decided to stick with the same plan I’ve had since I joined the company, an HMO plan offered by Aetna and a dental PPO plan offered by the same provider.

Overall, including my other benefits such as long term disability, the cost of the deductions to my paycheck will increase 10% in 2010 over the cost in 2009. Part of this is due to a change in my company’s subsidy formula. In 2009, the company has been paying for a certain percentage of the total cost of my benefits on my behalf, but next year, the percentage is decreasing.

This is a big increase when considering the Consumer Price Index looks like it’s heading towards a rate of 3.4% this year according to the Bureau of Labor Statistics. This increase is the latest in a line of similar increases over the past several years. The price increases spurred me to consider High Deductible Health Plans and Consumer-Directed Health Plans this year, but after reading through the details, I decided the HMO continues to be the best option for me.

Even my 10% increase is overshadowed by the increases other people are seeing. Without dependents, some might say I have it easy. I can afford the increase. Well, I can afford it right now, but there is always the threat of that ability disappearing in the future. Consumers do not normally agree to pay an increasing amount each year for a service that stays the same, or in some cases, for a service that decreases.

I’ve also recently begun pricing how much I would pay for similar health benefits as a self-employed individual. To have a plan that is even remotely similar to the benefits I have now, I would be paying about twelve times my current premium. The more reasonably priced health insurance plans offer incredibly low benefits and high deductibles. I may have more affordable options by qualifying as a small business rather than self-employed, but that is going to require more research.

What is your annual enrollment story? Are your costs going up?

Photo credit: ZaldyImg

Updated January 16, 2010 and originally published November 25, 2009. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Luke Landes, also known as Flexo, is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about him and follow Luke Landes on Twitter. View all articles by .

{ 19 comments… read them below or add one }

avatar Smithee ♦1,358 (Quarter)

Amazingly, my health care insurance doesn’t have a direct affect on my paycheck, but like you, that’s only because I’m not covering a spouse or any children. Covering a “family” on my plan would cost something like $900 a month. I don’t see how anyone could afford that.

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avatar KC

Actually costs are going down this year. But so are benefits. However my husband works for a health care company and we get very good service even with reduced benefits. Plus working with doctors has some benefits – I can see just about anyone quickly if necessary – but we don’t abuse that. But his previous job had nightmare health care costs. Two 35 year olds with no underlying health problems and we were paying close to $600/month for crappy coverage. It was a small private practice so they didn’t have the negotiating power or the ability to match employee costs of the larger companies.

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avatar RainyDaySaver

Amazingly in this day and age, my benefits are free. As long as I don’t put anyone else (husband or dependents) on my plan. Payroll deductions for my husband’s plan went up 30% for 2010 overall. And because I don’t know how secure my job is in the coming year, he added me to his plan, just to be safe.

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avatar AL

RainyDaySaver-Why would you do that?

Keep your free plan. If for some reason you lose your job (hoping you don’t, however), that should be a qualifying event to add you to your husband’s plan.

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avatar Financial Samurai

If my insurance stayed the same, I’d be annoyed. But, I changed everything around completely for 2010 and go more benefits and insurance b/c I plan to go to the doctor and check out every body part due to all the injuries I sustained via Basketball and Tennis this year!

I hear what you are saying though about the 10% increase. Imagine if you were a student at UC Berkeley and saw a 32% increase??

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avatar Betty Kincaid

Flexo,

You say that the 10% increase includes a decrease in your employer’s subsidy so technically your benefits increased x% and your compensation decreased y% for a combined decrease in your net take home pay of 10%. It’s actually a little less than that because your withholding will decrease but you get the picture.

CYC has a small business policy with a high deductable & an health savings account (HSA) option. Premiums run $250 p/month for healthy (non-smokers) in their 40s. We each throw $50-$100 p/month into our HSA.

Betty

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avatar Steve

I don’t understand how inflation can be so low when both healthcare and housing (as well as education) costs have been increasing at a rate higher than inflation for decades.

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avatar Erica Douglass

Having a small biz plan typically requires you to have at least 5 people who work at least 20 hours a week and want to participate in the plan, and even then, it won’t save you much over the typical individual plan.

I’ve bounced from not having insurance to having insurance for many years. I’m currently covered under Richard’s plan. When I was self-employed, I got denied for insurance for things such as “having a prescription” (yes, ONE prescription, that runs about $35/month), so I went without insurance for years.

Not having insurance just means you do things differently. You negotiate cash payments and discounts with providers, you seek out alternative practitioners, and you become quite conscious of your own health. At least I did. My Celiac disease diagnosis this year was done with no traditional providers and no health insurance. It ran me about $1500, all told. Traditional providers might still be trying to figure it out.

-Erica

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avatar Betty Kincaid

Erica,

We only have 2-4 (depending on business flow) employees covered under our policy.

If you work with an independent insurance agent you’ll have better luck finding a plan to fit you. Of course, you’re limited by your state guidelines. For instance some states don’t allow high deductible catastrophic insurance which means you’re paying more out of the gate.

One advantage to a group over an individual is the “pre-existing condition” issue. I had an employee with Celiac disease who couldn’t get individual insurance but was accepted under our group plan during the open enrollment period.

For the past 3 years my primary physician hasn’t taken any insurance. I know what he charges for every service before it’s performed and the price is always reasonable. Lab work & prescriptions are still covered under my insurance so I’m not really paying that much more than I was before but the difference in care is astonishing.

Of course, what do we know…we’re not in Congress :-)

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avatar RJ Weiss

We switched my wife to an HRA this year. Saved us a little money but not that much.

We’re young and maintain a healthy lifestyle. We both use high deductibles plans as a way to save.

Going w/o insurance is just to risky for us. One broken bone could deplete our emergency fund pretty quick.

BTW…our office works with small group health insurance.I asked around and the highest renewal we have seen for 1/1 is 42%!!!

RJ

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avatar John DeFlumeri Jr

I am expection a similar increase, even though I am using cobra benefits at present.

John DeFlumeri Jr

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avatar Tyler Karasewski

My health insurance costs are increasing slightly, but I really just don’t care. I pay about $210/month for fantastic health insurance for my wife and I. I think it’s going up to $225 or something next year. Doesn’t bother me. It’s fantastic insurance, it covers pretty much anything from pretty much any doctor I want to see.

If the costs doubled I’d still pay it without much complaining.

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avatar Kimberly

Our premiums were going to go up by about 20% so my employer switched insurance companies. Now it will be going down a couple bucks a month and our deductible (HDHP) dropped from $2000 to $1200.

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avatar MommyMel

My costs have increased from $54 (select PPO) per paycheck for medical, dental and vision to $138 (standard PPO) for myself and 3 children. We will no longer have copays but will “co-share” the cost of insurance by paying 20% of the visit with the emphasis on using an in network doctor to benefit from the negotiated cost. Of course, we must now first meet the deductible as well-$600 for my family. For RX, if you have a maintenance medication, i.e. an rx filled more than 3 times consecutively, the 4th fill that is done at the pharmacy and not through mail order will have us paying 75% of the cost.

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avatar Orguy

Due to a life change, I’m one of the rare exceptions to increasing costs. My youngest turned 22 in 2009, and so is no longer covered under my family policy. Starting January Im switching from family to single coverage. My premiums will go down about $3,200 in 2010, compared to 2009.

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avatar H Lee D

Since I insure only myself on my plan, mine hasn’t changed. However, our benefits changed at the start of the fiscal year. We went from no deductible to a $2000 deductible, our copays went up, our prescription prices went up, and something else changed, but off the top of my head, I can’t remember what it was. Being in the throes of follow-up care for Hodgkins, this has been costing more than I care to spend. We also took a 3% pay cut this year (again, beginning in July). My husband is in a similar situation.

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avatar Jane

I just ran the numbers on mine and my contribution is up 17%. (my employer pays about 75% of it) Luckily my contribution itself is still rather small, less than what I spend on cable.

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avatar Patrick

My premiums increased 33% this year, after a 30% increase last year. The numbers amazed me, and I didn’t have time to find an individual health insurance plan before the end of the open enrollment season. I just applied for an Anthem plan that I found through eHealthInsurance.com and I should save a couple hundred dollars per month. The plan is different though, because I am going from an HMO to a high deductible plan with an HSA. But my max total out of pocket is only a couple hundred above the premiums I would have paid, and that doesn’t include copays for office visits, prescriptions, etc. that I currently pay. At worst I would basically break even, at best I will save a couple grand.

You normally need a qualified life event to change your health coverage, so I hired my wife, added her to my payroll, and will offer the plan to her through my company, which should satisfy the requirements.

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avatar Bill

Our cost for medical and dental combined will jump 25% next year.

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