Reuters Money

After watching healthcare costs double over the past decade, most of America’s insured employees are bracing for another dose of pain in 2011.

As October once again brings open-enrollment season — the annual check-up to see how much more of our paycheck will go to health benefits — workers are anticipating higher premiums, bigger deductibles and more coinsurance.

They’re right to worry. Even as the economy recovers, containing costs will remain a corporate imperative. Employers expect healthcare expenses to increase nearly 9 percent in 2011, according to a National Business Group on Health (NBGH) survey released in August.

Much of that jump will be passed along to workers: two-thirds of firms reported they expected to increase the portion employees will contribute to premiums, and nearly half will hike up deductibles or out-of-pocket costs — or both. “Most companies are doing what they can to keep underlying costs as low as they can,” said Helen Darling, NBGH’s president. “But they do expect workers to share in more of the burden.”

That burden, for many employees, comes in the form of consumer-driven healthcare and the low-cost, high-deductible “value” plans that have become increasingly popular. About 10 million Americans are currently signed up for such plans, and more and more consider the option each year.

That’s not necessarily a bad thing. Certain workers, for instance, don’t use a lot of healthcare each year, and the price of an occasional doctor visit is less expensive than a hefty payroll deduction. Or even for larger families with higher medical needs. “If they burn through their deductible very quickly, they often find the benefits on the other side far more generous,” said Sara Taylor, health & welfare solutions leader at human-resources consulting firm Aon Hewitt. “It’s important to assess healthcare usage annually and make sure you’re not overpaying.”

Equally critical is to avoid leaving money on the table. Nearly all corporations now offer price breaks or cash back to encourage healthy habits, such as disease or weight management programs. At New York’s North Shore-LIJ Health System, its 42,000 employees can save as much as $30 per pay period by agreeing to quit smoking, go for an annual physical or answer a health-assessment questionnaire.

For workers who make all three pledges and choose a value plan, the result is no premium deduction for 2011. “If you’re already a non-smoker, all you have to do is agree to see a doctor once a year and spend a couple hours on paperwork and your take-home pay goes up by hundreds of dollars this year,” said Joe Molloy, director of benefits. “Don’t, and your premiums are probably going to go up.”

Another easy way to save is adding to a flexible spending account (FSA). Workers can contribute pre-tax monies to pay for health-related expenses — including deductibles or co-pays — and some employers even match these funds. In 2011, there is no limit on how much can be added to a FSA. “With taxes rising this year, this is essentially a gift from the federal government that everyone should take advantage of,” Darling said. “Doing so could mean more than 30 percent more pay in certain tax brackets.”

Annual contributions will be capped at $2,500 in 2013 under the Affordable Care Act (ACA), the health reform passed by Congress last March. Another change ends FSA reimbursements for over-the-counter medications without a prescription.

Parents will find a bonus in their benefits package this year thanks to the reforms. ACA now requires that adult children up to age 26 be eligible for parents’ employer-based plans. This applies no matter where a child lives, if they are financially dependent or even married. (Though their spouses aren’t eligible.) Open enrollment period is the time to sign for this coverage at most companies. “Be sure you can provide proof of eligibility, such as a birth certificate,” Taylor said.

Lifetime or annual maximum payouts have also been prohibited, and all new insurance plans are required to provide free preventive care, such as mammograms, flu shots and cholesterol tests. Citing the high cost of such reforms, some companies have threatened to scrap insurance coverage altogether for employees. Others are muddling through, trying to determine how the new regulations affect them. Some plans will be “grandfathered” in for the time-being, Darling said. “Employees shouldn’t automatically expect to see all these changes right away.”

Since August, Molloy and his colleagues have striven to get the word out on how benefits will – and won’t — change in 2011, communicating with North Shore-LIJ employees several times a week leading up to open enrollment this November. One newer feature in this year’s campaign is a blog for employees to ask questions, which has already received more than 100,000 hits. Other firms also offer cost calculators and ample educational resources online.

“We want to empower everyone to make the best choice for both themselves and the corporation as a whole,” Molloy said. Still, he admitted, “Every year we are calling those holdouts in the last week who still haven’t signed up for anything.”

Indeed, many employees delay making open-enrollment decisions or opt to make no changes at all. Updating retirement accounts is likewise neglected. In the vast majority of cases, Taylor stressed, that can be a costly misstep. “Studies show people put more thought into buying a microwave oven than their health benefits,” she said. “As with any purchase, it’s in your best interest to shop around.”

Photo: REUTERS/Jessica Rinaldi