The cost of health insurance premiums is something that all of us want to save on. But most people are not aware of the ways they can save money on health insurance. We have compiled a list of 7 Ways to Save on your Health Insurance for that very reason.
All these ways do not apply to an individual, some of them may suit you, and some may not. So read all seven of them, and see which ones are applicable for you. Make sure to bind these money-saving tips with your mind because you may need to tell someone.
- IRS Section 125 POP | Premium Only Plans | Cafeteria Plans
- IRC Section 105 Medical Reimbursement Plans
- Using HSAs with Social Security and Medicare | A Guide to Health Care
- Flexible Spending Account (FSA) Contribution Limits 2020
- IRS HSA Contribution Limits 2021
1. Put your Healthy Dependents on an Individual Plan
Many employers pay a large number of premiums to their workers, but they do not cover their dependents. If your spouse or children are in good health, you can probably get individual insurance for them at a cost much less than the costs of your coverage in your group plan.
According to an eHealth study, the plan purchased through the Affordable Care Act marketplace in 2020 had an annual health insurance premium of $5,472 for an individual and $13,824 for a family.
By comparison, the Kaiser Family Foundation found that the national average health insurance premiums for an individual in group health policies in 2020 were $7,470 and for a family was $21,342.
2. Ask your Employer For a Section 125 Plan
If you are already a part of an individual policy, there is a way for you to pay for it tax-free. You can ask your employers for a Section 125 plan, also known as a “cafeteria plan,” that will pay for individual insurance before taxes.
As it is free for your employer, so it’s not a problem to ask. Some states require employers to submit a Section 125 plan to anyone who inquires about it, so that’s your proper right.
Typical section 125 plane examples include:
- Premium only plans (POPs)
- Flexible spending accounts (FSAs)
- Health savings accounts (HSAs)
3. Contribute to a Health Savings Account (HSA)
If your employer doesn’t allow an HSA (Health Savings Account), you can still open one by yourself. You will be able to make current year additions as long as an eligible HSA plan covers you.
An HSA is a bank account into which you deposit money, and it will incorporate your medical expenditures tax-free. This is particularly helpful if you have a substantial-deductible plan that requires you to pay a large sum out of pocket before your coverage will cover anything.
4. Work With an Insurance Agent
While you are trying to save money, it may seem contradictory to seek professional help, but if you’re shopping for individual health insurance, the agent’s services will cost you nothing. This is because insurance agents are paid on a commission for registering new policyholders, not based on fees or charges directly from their clients.
With individual health coverage, the law requires insurers to charge the same price despite how the policy is bought, which means that the plan will never cost more because you decided to buy with an agent.
Additionally, licensed carriers know the market better than anyone else. They can help you look for all of your options and find you an affordable plan you may not be able to get on your own.
5. See If you Qualify For a Premium Tax Credit.
Premium tax credits are available to assist low-income Americans to purchase affordable individual or family health coverage through the health insurance markets organized by the Affordable Care Act.
Regardless of income, any American who buys health insurance on federal exchanges or state-run markets will give no more than 8.5% of their family’s income till the end of 2022.
6. Get Cost-Free Coverage If You Lost your Job Due to COVID-19
If you lost your job due to the pandemic and your health coverage, then worry not, because COBRA (Consolidated Omnibus Budget Reconciliation Act) will help you get continued health coverage from your employer.
Factors that allow you to get extended coverage under COBRA include:
- Voluntary or involuntary job loss
- Decrease in hours
- Changing jobs
- Death of a family member
Generally, to partake in COBRA, the employee must pay the total cost of the premium or benefit. However, American Rescue Plan has specifically made some changes for those who lost employer-sponsored coverage due to COVID-19 (not those who willingly quit their jobs).
7. Take Advantage of your Employer’s HRA
Suppose your organization offers a Health Reimbursement Agreement (HRA). In that case, you can access the advantage of saving additional money for health insurance premiums and other medical costs that are 100% tax-free.
For HSA or an FSA, you have to give your own money to use these benefits. But in the case of HRA, your employer sets an allowance that you’re permitted to operate on qualifying medical bills. Then you submit those purchases for compensation.
That is all with the seven ways to save on health insurance. Make sure to access your situation, read these ways, and check which ones apply to you. In case of any requests, questions, or suggestions, make sure to share them with us via the comment section below.