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Vital tips about health care open enrollment

However you slice it, chances are you’re paying more for health care.

If you’re one of the 11 million Americans who receive health insurance from an Affordable Care Act exchange, you’re likely facing stiff premium increases and fewer coverage options as large insurers like Aetna (AET) and Humana (HUM) exit the ACA marketplace.

Earlier this week, the vastly larger group of 150 million Americans covered by employer-sponsored insurance got a glimpse of how they’re doing.

On first look, it seemed like good news. Premiums for employer-sponsored family coverage rose only 3 percent for 2016, down from increases that were almost twice that much in the previous year, according to research from the Kaiser Family Foundation.

But there’s a twist. Premiums are lower in part because employers have been consistently shifting more health care costs onto employees via higher out-of-pocket costs, including bigger deductibles. The Kaiser survey found that workers are paying deductibles that are 50 percent higher than they were five years ago. 

Four out of five people with employer-sponsored coverage pay an average of $1,500 each in deductibles. For those working at smaller companies that average is $2,100.

All this is revealed just as workers are about to get bombarded with open-enrollment materials for the 2017 benefit year, said Tracy Watts, senior partner at Mercer benefits consulting firm. Before that big packet (or pdf) of information hits your desk, here are some ideas from Watts on how you can keep out-of-pocket health care costs as low as possible.  

Don’t assume most expensive is best. Employees often choose the plan with the most bells and whistles and stay there, whether they need it or not, Watts explained. That’s fine if you’ve done the math. But it’s important to compare plans every year (including those available from your spouse’s or partner’s employer) because coverage changes. 

You may find that when you take into account premium discounts and other incentives such as wellness discounts and Health Savings Account (HSA) contributions, the high-deductible plan will cost less in the long run, depending on your health status.

On the other hand, if you have significant health care needs, you may find that a lower-deductible option (if you have one) makes more sense. Watts pointed out that 20 percent of large employers offer only a high-deductible choice, but as much as half of all employers offer two or more options.

If the idea of doing the math to figure out what option is best makes your head spin, check your benefits package or ask your benefits department if your company is one of the many offering online decision-making tools that can make this job easier. Some of the more sophisticated tools automatically plug in your claims data from last year, giving you a baseline to make your calculations. Others ask questions that can help you estimate what your health care costs will look like in the next 12 months.

Take advantage of an HSA. Most people who are covered by a high-deductible plan are eligible to contribute to an HSA. (For 2016, the maximum contribution was $3,350 for individuals and $6,750 for families.) These accounts are portable, meaning if you change jobs or stop working, the money stays with you. 

More important, they’re triple tax-advantaged: Contributions are pretax, earnings on the account balance grow tax-free and withdrawals for qualified health care expenses are tax-free. “With this many advantages, you can’t afford not to consider an HSA,” Watts said.

An increasing number of companies will kick in contributions to employee HSA accounts hoping the money will be an incentive for employees to choose the lower-cost option. This is free money and should definitely be part of your calculation and decision, Watts said.

Look closely at prescription drug coverage. The uproar over EpiPens clearly shows the controversy surrounding rising prescription drug costs. That’s why you need to take a close look at your upcoming prescription drug coverage for 2017. It’s likely that even if your employer offers two or more health insurance options, your prescription drug coverage is probably the same for both. 

If you take any drugs regularly, particularly a high-price specialty drug, be sure to call your insurer, potential insurer or Rx drug coverage company to make sure your medicines are still on the formulary, Watts suggested. If they aren’t, you’ll need to plan for the extra co-pay expense you’ll likely incur.  

New support services can be a big help. In an effort to keep health care costs down and make sure employees are getting the information they need to help achieve that goal, employers are beginning to contract with independent companies to offer a variety of support services. These include companies that help workers comparison-price shop for prescription drugs and other health care services, advocates that aid patients with billing and claims issues and independent experts who review diagnoses and treatments.

“These extras aren’t always obvious,” said Watts, “You’ll need to ask your benefits department what’s available.”