5 Ways to Lower Your Group Health Care Plan Premiums

If you are like most employees, when you first started your current job, you likely took a cursory glance at the group health plan offered and signed up for it. Most employees don't look at their plans again. However, it makes sense to review your coverage and premiums every year to make sure you're not overpaying. Most plans have an open enrollment window every year where new employees can sign up and current employees can make changes to their plan.

As a former financial analyst for a life and health insurance company, I have reviewed many group health plan options, along with their costs and benefits- both to the insurance company and the employee. Here are five ways you can lower your premiums on your current plan. Choose the ones that fit with your coverage needs and start paying less.

Ditch unneeded add-ons.

Review all of the coverages included in your plan. You may be signed up for add-on coverage, such as drugs, eyeglasses or dental. Compare the cost of your premiums with the estimated expenses. You may find that that the premiums exceed the expected need. This is often the case with eyeglasses. If you are under 40 and currently in good health, chances are you are also paying too much for drug coverage. Cancel the drug coverage and put that saved premium into a flexible spending account that will cover most out-of-pocket medical expenses tax-free.

Increase the deductible.

The deductible on a group plan represents the amount you will have to pay in a year before any coverage kicks in. As your income increases and your debts decline, you have a greater ability to cover the deductible if you have a medical emergency. Consider raising your deductible as your means improve in order to lower your premiums.

Enroll in an FSA.

A flexible spending account (FSA) is a benefit offered by many employers that allows their employees to pay for out-of-pocket medical expenses tax-free. Part of every paycheck is deposited by the employer into the plan and tax deductions are not taken on those contributions. The FSA usually has a debit card attached to it so that the employee can pay for medical expenses directly. An FSA is a good alternative to expensive add-on coverage. It sets money aside for the possibility of unexpected medical costs and gives a tax benefit for doing so.

Consider an individual health plan.

In general, group health plans are less expensive than individual ones because the risk to the insurance company is spread amongst a pool of employees. Sometimes, however, this is not the case. Some group plans are based only on the health experience of the individual workplace so, for example, if you have a few chronically ill co-workers, you might all be paying high premiums. An individual policy is based only on your age, sex and health status. If you are young and generally healthy, you may find that you can get an individual policy for less than your group coverage. As an added bonus, you will be able to tailor the individual policy to your needs.

Undergo voluntary medical screening.

Some group plans allow employees to undergo medical screening tests to reduce their premiums. If you are healthy, consider doing that. If your screening checks out, the reduction in premiums could be significant. A secondary benefit is that it gives you a thorough check up for free. Any unknown or hidden conditions can be found while treatment options are at their best.