Health Insurance: Time for a Checkup!

You do not want to wait until you are sick to pay attention to your health; that is why you get checkups. Well, your health insurance is no different. If you wait until you file a claim and see issues with your coverage, it is a much bigger headache than if you stop problems before they start.

With the year coming to an end and new enrollment periods upon us, now is the perfect time to take a thorough look at your insurance costs and coverage. Here are a few key aspects of your plan that you should consider during your review.

Make Sure You Have Adequate Health Insurance Coverage. If you and your family do not have adequate medical coverage (referred to as minimum essential coverage), you may be subject to a penalty. Medical insurance provided by your employer or through an individual plan purchased through a state insurance marketplace generally qualifies as adequate coverage. The penalty amount varies based on the number of uninsured members of your household and your household income. If you have three or more uninsured household members, the penalty may be $2,085 or more for 2016, depending on your household income. This amount will likely be slightly higher in 2017.

Take Advantage of Flexible Spending Accounts (FSAs). If your company has a healthcare and/or dependent care FSA, before year-end you must specify how much of your 2017 salary to convert into tax-free contributions to the plan. You can then take tax-free withdrawals next year to reimburse yourself for out-of-pocket medical and dental expenses and qualifying dependent care costs. Watch out, though – FSAs are “use-it-or-lose-it” accounts. You do not want to set aside more than what you will likely have in qualifying expenses for the year.

If you currently have a healthcare FSA, make sure you drain it by incurring eligible expenses before the deadline for this year. Otherwise, you will lose the remaining balance. It is not that hard to drum some things up: new glasses or contacts, dental work you have been putting off, or prescriptions that can be filled early.

Consider a Health Savings Account (HSA). If you are enrolled in a high-deductible health plan and do not have any other coverage, you may be eligible to make pre-tax or tax deductible contributions to an HSA of up to $6,750 for a family coverage or $3,350 for individual coverage—plus an extra $1,000 if you will be 55 or older by the end of 2016. Distributions from the HSA will be tax free as long as the funds are used to pay unreimbursed qualified medical expenses. Furthermore, there is no time limit on when you can use your contributions to cover expenses. Unlike a healthcare FSA, amounts remaining in the HSA at the end of the year can be carried over indefinitely.

Health insurance is a subject most of us prefer not to think about. But a little research and tweaking now can save you a lot of time, money and inconvenience later!

All content provided in this article is for informational purposes only. Matters discussed in this article are subject to change. For up-to-date information on this subject please contact a James Moore professional. James Moore will not be held responsible for any claim, loss, damage or inconvenience caused as a result of any information within these pages or any information accessed through this site.