University-funded health insurance plans will require employees to pay for a larger share of their medical bills starting next year, so it's an especially good time to study options closely to maximize savings.
A virtual advisor
ISU employees can use ALEX, an interactive virtual benefits counselor, when considering the university's benefits offerings. Since its rollout in fall 2022, faculty and staff logged about 1,900 ALEX sessions through the end of August. More than 90% said it was helpful, and 85% said the virtual counseling helped them better understand their benefits.
ALEX asks about your medical services and prescriptions in the past year, household coverage needs, age, risk aversion and financial status. Using that data and other analysis, it provides personalized recommendations -- including which insurance plan seems to be the best fit and estimates for anticipated out-of-pocket costs and worst-case scenarios.
There are two options for using ALEX. In the traditional version, a conversational narrator talks you through benefits choices as it explains the programs. A second mode new in 2023, ALEX Go, is more direct and text-based, with less embedded education but added features such as a tool for comparing ISU health insurance plans to alternatives (a spouse's employer-sponsored plan, for instance).
ALEX is free, confidential, voluntary and updated with 2024 plan details. A crucial point: Recommendations from ALEX are not automatically enacted. They're just suggestions. You have to use Workday to change benefits selections or establish flexible spending plans, choices that generally must happen during open enrollment, which runs Nov. 1-17 this year.
Review your claims
ALEX asks about how often you and covered family members have used different types of health care services in the past year. Don't worry if you don't have that information at your fingertips. It's easy to access online. Register and log on to Wellmark to see a rundown of past health claims, Express Scripts for prescriptions and Delta Dental for dental claims.
Even if you're not using ALEX, reviewing past claims can help project medical expenses under the new health plan design. For employees on the HMO plan, deductibles, coinsurance and out-of-pocket limits might be unfamiliar. For descriptions of how those common insurance concepts work, check out this glossary prepared by university human resources (UHR). Or take a look at the videos UHR has shared on its benefits education page.
In 2024, HMO policyholders and covered family members will have a $250 per person deductible, the amount you pay before ISU cost-sharing kicks in. After an individual's deductible is met, HMO plan members pay 10% coinsurance until their personal out-of-pocket costs reach $1,500. In-network care through the PPO plan will carry a $400 deductible per person and 20% co-insurance, with a $2,000 cap per person.
Multi-person plans, both HMO and PPO, will have overall deductibles and out-of-pocket limits double the per person amounts. For example, using the HMO limits: Once a household's deductible contributions total $500, everyone on the plan has hit their deductible even if they haven't fulfilled the $250 per person deductible. When a family has spent $3,000 out-of-pocket (including copays, coinsurance and deductibles), all costs are 100% covered even for individuals who haven't hit the per person cap of $1,500. All individuals, whether on a single plan or a plan that covers other family members, have the same per person deductible and out-of-pocket cap.
Consider a flex account
If you haven't used a flexible spending account before, 2024 could be a great year to start. You fund a health care flex account by diverting money from each paycheck, which is then available for reimbursing qualified medical spending -- including expenses incurred by your spouse or dependents. Out-of-pocket costs paid for covered health care would qualify, as do many over-the-counter medicines and other expenses. To see if an expense is eligible, see this database from ASIFlex, which manages Iowa State's flex accounts.
A flex account has two big advantages. The deductions from your pay are pre-tax, which means it reduces how much income tax and payroll tax you'll pay. How much you save on taxes depends on your income level, but it could easily be 30% of the amount deducted.
Flex accounts also make covering health care expenses earlier in a calendar year easier. The amount of money you decide to set aside for the entire year is available starting in January, as soon as ASIFlex receives ISU's first payment. Having a year's worth of savings for health care set aside early in the year could be handy when you have a health plan with a deductible.
You proactively choose how much to save in a flex account each year during open enrollment. Prior year's flex choices don't automatically continue. This UHR webpage has more information about flex accounts, which also are available for dependent care spending.
OK, but how much should I flex?
How much to sock away in a flex account is an important decision. The maximum you could put in a 2023 health care flex account was $3,050, a figure that likely will increase for 2024. But only a certain amount of unused funds ($610 in 2023, also likely to increase) can carry forward into the next year. Any unspent money more than the carryover allowed is forfeited.
To avoid losing flex money, be sure your health care expenses will meet or exceed how much you set aside. Reviewing recent health claims or using ALEX's estimate for out-of-pocket costs can help determine the right amount.
Keep in mind that while there are additional out-of-pocket expenses in 2024, preventive services will be newly free -- no copays, deductibles or coinsurance. And any office-based health care services with a copay ($15 on the HMO plan, $25 for PPO) are inclusive, meaning the copay is all you'll owe even if you haven't met your deductible or out-of-pocket limit yet.
UHR benefits director Ed Holland said at a town hall on the health plan changes that an analysis of 2022 records found just 1 in 10 ISU employees covered by the university's health insurance would have hit their out-of-pocket limit.
Have more questions?
UHR benefits counselors are available to meet one-on-one or answer questions. Call the UHR Service Center at 515-294-4800, email the benefits team at benefits@iastate.edu or schedule a virtual or in-person meeting with a counselor via the Microsoft Bookings app (see the bottom of the open enrollment website for Bookings links to the benefits counselors). The benefits team recommends not waiting until open enrollment begins in November to set up a meeting, as the demand is expected to be high.
