Health Insurance: What Families Can Expect Next Year

(MoneyWatch)  Open enrollment season is upon us and this is your company's annual opportunity to tweak its benefits and try to save some money.

In yesterday's post, I outlined the health insurance changes that await you for 2010, including higher out-of-pocket costs and fewer plan options to choose from. Today, I'd like to focus more attention on some of the strategies employers are using to save money on family coverage. To get a better handle on the issue and how it could affect your bottom line, I spoke with Tom Billet, a senior consultant with benefits consulting firm Watson Wyatt.

First, it's helpful to understand that on average about two thirds of those enrolled in an employer's health plan are dependents, says Billet. So it only makes sense that companies would look more closely at this large group when trying to trim expenses.

For quite some time companies have penalized workers with spouses and children by subsidizing their insurance premiums at a lower rate than their single employees. While a single worker typically pays just 17% of his total insurance premium, those with family coverage are asked to hand over 27%, according to the Kaiser Family Foundation. But as the recession continues to squeeze firms, employers are now starting to implement more creative ways to cut back on their dependent spending.

Here's a brief summery of the trends Watson Wyatt noted for 2010 and how they may affect your family:

Dependent Audits
On average, 5 percent to 8 percent of covered dependents on a company's health plan aren't actually eligible for benefits, says Billet. Carrying those extra bodies is expensive and can easily cost larger firms millions of dollars each year. So what are employers doing about the problem? Some plan to audit their health insurance rolls and weed out those who don't qualify.

Who will this affect? Parents with older kids. Although some states have passed laws requiring companies to extend benefits to more mature children, many still only insure those who are full time students and under the age of 23. So if your son or daughter recently graduated from college or dropped out, he or she may no longer be eligible for coverage and will have to go out on his or her own to purchase a policy. The good news is that young, healthy people tend to be fairly cheap to insure on the private market.

Spousal Surcharges
Companies are tired of covering spouses who have access to health insurance through their own employers. Firms are hoping if they start charging working husbands and wives a surcharge between $600 and $1,000 a year that they will start opting into their own companies' plans.

If only life were so simple. As we all know, some employers offer the gold standard in health insurance and others provide little more than catastrophic coverage at an extremely high price. So if you or your spouse's firm offers poor coverage, it still may make sense to stick with the better plan even if it costs your family more money each year.

Pricing Based on Family Size
Historically, pricing was pretty straight forward. Single workers paid one premium for coverage and those with dependents paid another. Now, however, companies are beginning to consider setting premiums based on the number of children their workers have, says Billet. It's still unclear how much a family of four versus, say, a family of six would have to cough up. But one thing is clear: Those with more kids will be penalized.

Do you think these changes are fair? How will they affect your family's budget?

Medical Exam Bed image by Extremeezine, CC 2.0.