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Healthcare expenses can take a large chunk of your household budget. I've heard of families paying as much as $15,000 per year just for health insurance premiums, not including co-pays and co-insurance.
By studying the details of health insurance plans, learning as much as I can about health and insurance, and getting lucky with employer-sponsored insurance coverage, I've been able to control my expenses. My goal is to spend wisely without scrimping on services such as preventive care, screenings, and treatment.
Recent changes in my healthcare coverage choices compelled me to scrutinize offerings again, despite being happy with the prices and plans I've had in the past. During this process, I discovered ways to earn more than $3,000 through company and government incentives linked to healthcare coverage.
Background on Healthcare Insurance Changes
My family obtains healthcare insurance through an employer-sponsored plan. Last year, the company redesigned its insurance offerings and restructured the pricing of its plans. For example, coverage for entire families became higher than coverage for single adults. Previously, monthly premiums had been based on the type of provider network, not the number of people covered.
At the same time, a high-deductible health plan (HDHP) associated with the preferred provider organization (PPO) was introduced. In addition, the company expanded its wellness incentives, possibly to soften the impact of increased premiums overall and the possibility of higher costs associated with the higher deductible.
I wavered on whether the increased (potential) cost associated with a HDHP would be worth the benefits. Despite our efforts to stay healthy, my husband, young adult children, or I could develop a high-cost illness. Though HDHP premiums were lower than non-HDHP plans and there's a limit to out-of-pocket expenses, the HDHP could still cost more than a traditional, low-deductible policy.
Healthcare Plan Incentives
As I contemplated my choices, I noticed that the company sweetened the HDHP deal with an HSA contribution for those willing to choose this riskier option. So my husband and I decided to try this approach for one year.
Here are details on what we received and how we qualified for bonuses:
Open and Fund an HSA
My husband's employer offered a $1,000 HSA contribution as an incentive to choose the HDHP. This tactic worked for me. I figured the bonus could defray costs associated with the higher deductible. I also studied and compared the HDHP and non-HDHP plans and realized that the differences were minimal right now.
In addition, we'll receive tax benefits associated with HSA contributions. By funding an HSA, our taxable income is reduced by the amount of our personal contributions, resulting in a lower tax liability. We'll contribute the full amount plus the catch-up amount for taxpayers 55 and over. So, we'll contribute $6,000 ($7,000 maximum less the $1,000 company contribution). With a 22% tax bracket, we'll lower this year's taxes by $1,320. Plus, we'll sock away $7,000 in a tax-free account.
So, the total annual benefit linked to the HSA is $2,300 ($1,000 in company contribution and $1,300 in tax benefits).
Stay Active and Record Activities
In the past, the company offered cash bonuses of up to $150 to employees who participated in health screenings and achieved certain scores in key metrics. These included cholesterol ratios, blood sugar levels, and blood pressure. This incentive is still available but now translates into points on the Engage app.
This app also allows employees and family members to earn points for activities like sleeping, eating, and exercising (yes, even sleeping or rather sleeping and then recording the hours of sleep). Points can be redeemed for cash-like payments. Specific rewards include HSA contributions. a healthcare insurance premium reduction, and Amazon gift cards.
Basically, Engage encourages engagement with the app and raises awareness of fitness and related activities. Employees and family members can accumulate points daily by recording the following:
- Number of hours of sleep: 5 points per day
- Specifics of eating: 5 points per day
- Exercise: up to 10 points for 10,000 steps or an equivalency per day
I didn't want to figure out how to record my eating habits so I skipped this section as did my husband. However, I could easily record the hours I slept each night to earn 5 points daily. In regard to exercise, I entered the time spent riding my bike, doing yard work, lifting weights, etc. Certain fitness devices can be linked to the app but most of my activity wasn't automatically uploaded so I recorded this information myself. I've cycled over 2,000 miles this year and ran a half-marathon earlier in the year so it didn't take long to qualify for rewards.
After I accumulated my first 1,000 points, I redeemed them for a reward worth $360. Next, I earned what Engage calls secondary rewards. These are awards worth $25 each for earning 100 points, up to four times. For both the primary and secondary rewards, I opted for the Amazon gift cards as I shop there frequently (disclosure: I'm an Amazon shareholder). My husband is still working on earning and redeeming his points but he's on track for $460 from this process [$360 + (4 x $25) = $460].
The cash benefit for being active and recording activities is $920 [(2 rewards x $360 per award) + 2 x (4 rewards x $25 per award)].
The incentives combined for my husband and me total $3,220. Our premiums cost about $4,500 per year so these bonuses help control our healthcare expenses. We may have other expenses later in the year but, so far, we've accessed only preventive care, which is 100% covered and paid.
These types of incentives may not be available to everyone and even if they are, you may or may not want to fund an HSA and record all of your activities. Still, I'm happy to find ways to make the most of our healthcare benefits and guard our health at the same time.
How have you found ways to lower your healthcare expenses?