Originally created 11/04/04

Employees given range of benefits



After spending several weeks in the hospital undergoing tests, hearing that you don't have the insurance to cover them is frightening.

That happened to one employee at Walton Rehabilitation Hospital who thought his supplemental insurance would cover expensive medical procedures.

He wasn't paying attention during the hospital's open-enrollment meeting.

"They thought they had signed up for one plan, and they signed up on another," said Mary Campbell, Walton's human resource manager. "Ultimately, that individual had to pay the bill."

Open enrollment is the time when employers explain benefit plans, giving employees the chance to review or amend their insurance benefits for the coming year.

"It's extremely important for employees to get educated on their providers and their services," Ms. Campbell said. "Every insurance plan is different and you need to know what your insurance covers."

The hot issue this fall likely will be higher premiums, deductibles and co-pays. Health insurance costs are expected to increase about 12 percent in 2005 compared with 10 percent last year, said David Foster, a spokesman for Mercer Human Resource Consulting in Atlanta. Much of the cost increase is attributable to an aging work force and advancements in medical technology.

"As the work force ages, the consumption of health services goes up," Mr. Foster said.

That means workers will shoulder more of their health care costs.

"What people are going to see is an increase in their cost-sharing responsibilities," said Paul Fronstin, a spokesman for the Employee Benefit Research Institute.

Mr. Fronstin said more insurance plans are providing incentives for consumers to pursue the least costly health care options, such as generic prescription drugs.

Open enrollment also is the time when many employees can begin their 401(k) contributions. The 401(k) is a tax-deferred savings plan that has replaced most retirement pensions. Financial advisers encourage employees to enroll in 401(k) plans because many companies match their employees' contributions up to a certain percentage, which is like getting "free" money for retirement.

"Any employee that has the opportunity to participate in a 401(k) should be doing so," said Bill Henry, a financial planner with William G. Henry Inc. of Augusta.

The other plans employees should consider are health insurance, life insurance and long-term disability insurance.

Health i nsurance covers most medical visits for both regular check ups and emergencies.

During open enrollment, employees may have to select among several plans.

Health insurance analysts suggest choosing the plan that includes doctors you regularly visit, has a manageable deductible and covers the prescriptions you need.

Keep in mind the deductible should reflect how much you can afford and how much you will spend on medical bills. For example, a low deductible might be better for a large family with several children who frequently get sick because the insurance kicks in sooner and will cover more of the total cost.

For a healthy, single person, a low-premium, high-deductible plan might be better because he or she is not as likely to require as much medical treatment.

Life insurance is designed to support your family in the case of your death.

"You need to keep this in mind if you have a spouse, children or mortgage," said Mr. Fronstin, adding that life insurance can be used to cover a child's college education.

To determine how much life insurance you need, consider your overall worth and how much your family would need if you weren't there.

Long-term disability protects your ability to earn money in case of an injury or accident that puts you out of work for more than 12 weeks.

It pays about 60 percent of your normal salary.

According to bankrate.com, the chance of being disabled at age 40 is much greater than the chance of dying, making disability insurance a worthwhile investment.

Again, adjust your coverage level depending upon your salary and how much you would need if you couldn't work.

Reach James Gallagher at (706) 823-3227 or james.gallagher@augustachronicle.com.