When it comes to dealing with healthcare, many of us may feel like the character Larry from the show “Curb Your Enthusiasm“. In the show, Larry goes through daily life and inadvertently runs into dozens of little inconveniences. He tries to stay calm, but it’s not always easy.
A lot of us can feel like that about health insurance premiums. Not only do they go up every year, but they also usually rise above inflation.
While you might not be able to curb your enthusiasm, here are two ways you might be able to curb your premiums.
The secret way to reduce your premiums
You don’t need to be a healthcare guru to reduce your premiums. You just need to sign up for the right benefits.
Don’t believe us? Take a look at the two examples below.
Reduce your premiums with an HSA
One of the best ways to reduce your premiums is with a Health Savings Account, or HSA. These accounts require that, before enrolling, you sign up for what’s known as an “HSA-compatible plan”. You can find out more about the particulars here, but in short, HSA-compatible plans come with a ‘high’ deductible.
What’s a deductible again? A deductible is related to your insurance plan. It is the amount you have to pay before your insurance covers expenses.
So how does a higher deductible reduce your premiums?
In many cases, health insurance plans with a higher deductible come with a lower premium. Now, you may be thinking that even if your premiums are lower, you’ll still be paying a high amount out of your own pocket if you have a higher deductible.
Here’s the catch: You are guaranteed to have to pay your premiums. But, you might not hit your deductible. Also, the amount you save in premiums helps to pay for your deductible.
If you want to lower your healthcare costs, a plan with lower premiums, including most HSA-compatible health plans, may be worth further investigation.
On top of HSA-compatible plans offering lower premiums, they are allow you to pay for deductible costs with your HSA. That’s the equivalent of a 25 percent to 40 percent discount* on your deductible and other out of pocket costs.
Beyond an HSA-compatible health plan, you can save with an HRA.
Reduce your premiums with an HRA
A Health Reimbursement Account (or Arrangement) is a strange bird. This employer-funded account can help employees save on a variety of healthcare related costs. However, an HRA doesn’t come with a special plan requirements that an HSA has and can be more flexible.
So why is it on the list?
If a company offers its employees an HRA, it helps employees pay for out-of-pocket expenses. It can also be offered with a higher deductible to provide premium savings, but employers have more control over what is or isn’t included in the plan benefits.
In that way, it can be an excellent tool to manage the normally high cost of premiums and overall costs for employees. While it may not always directly lower the cost of the premium, it prevents the brunt of the expense from falling on the employee.
If your employer offers an HSA or HRA, ask them when your company’s annual open enrollment is so you can look into signing up for one of these premium-reducing accounts.