By Kimberly Lankford
Kiplinger's Personal Finance
Sunday, November 16, 2008

QIt's open-enrollment season for my employer's health-insurance plans. What should I look for in a policy?

ADon't assume that the coverage you have had is still the best deal. Instead, compare total out-of-pocket costs for all of the plans offered by your employer and your spouse's employer.

Average premiums for employer-sponsored coverage increased 5 percent this year, according to the Kaiser Family Foundation. The average family plan costs $12,680, with employees picking up $3,354 of the bill. Single coverage costs $4,704, on average, with employees paying $731 per year.

Premiums, which can vary depending on the size of the company, are just one factor to consider. Companies have been increasing costs in less-obvious ways. The average co-payment is now $19 for visits to primary-care doctors and $26 for specialty physicians. And employees with high-deductible health-insurance policies are more likely to have co-insurance than co-payments, meaning that they pay a percentage of the total cost of a doctor's visit. On average, an employee with co-insurance will pay 17 percent of the bill.

As for prescription drugs, the typical plan charges a $10 co-payment for generics, $26 for preferred drugs, $46 for nonpreferred drugs and $75 for specialty drugs. Some plans have co-insurance rather than co-payments for specialty drugs, requiring employees to pay 28 percent of the cost. This change can make a huge difference if you take expensive specialty drugs with no lower-cost alternative -- 28 percent of the total cost can add up to much more than $75.

However, many plans provide coverage for preventive care and prescription drugs without requiring the insured to pay a deductible first. And some offer bonuses for completing a health-risk assessment or participating in wellness programs.

In addition to comparing out-of-pocket costs, look at coverage maximums and exclusions or caps on out-of-pocket costs. A policy with a low coverage maximum -- $1 million or less -- could leave you with thousands of dollars of uncovered expenses if you have a major illness or emergency.

One way to lower the premiums is to choose a high-deductible health-insurance policy and pair it with a health-savings account. If your policy has at least a $1,100 deductible for individuals or $2,200 for families in 2008, you'll qualify for a health-savings account. You can use money from an HSA tax-free in any year for medical expenses and take it with you if you leave your job.