Health and Dental Insurance

Health and dental insurance is an absolute must. Hopefully you, or your children's father, will have coverage through an employer. Working fathers are often required by law to carry their children on their employer's health plan until the children are 18, or older if the children attend college full time.

If he has this option available, make sure you take advantage of it, and don't be afraid to go to court to do so. It could save you thousands of dollars over the years and guarantee your children the coverage they deserve.

If neither you nor the children's father can acquire health insurance through an employer, you will need to find a plan you can afford that will cover and protect you and your children. In general, your health insurance options are as follows:

  • HMOs: Health maintenance organizations require a primary care doctor and usually one hospital within their plan. Co-pays range from $10 to $15 for doctor's visits and prescriptions. They can be sufficient for families that are generally healthy, and they are cheaper than plans with more options.

  • PPOs: Preferred provider organizations give you a greater range of doctor selection and choices about whether or not you see a specialist or have certain medical tests. You will have a larger selection of doctors and hospitals, but you pay a higher premium, and typically higher co-pays if you see a doctor outside the plan or opt for branded prescriptions.

  • Catastrophic coverage: Premiums are much cheaper, but you will have a high deductible — $2,000, $5,000, or $10,000 — which means you pay everything until the deductible is met. If you are really strapped for money and this is all you can afford, it will protect you from bankruptcy if a tragedy occurs or anyone becomes gravely ill.

  • Government assistant plans: If you have a low income and cannot afford health insurance, you may qualify for state children's health insurance programs (SCHIP) or federal Medicaid assistance. Amazingly, six out of 10 families who are eligible never apply. In most states, if you earn less than $36,000, your children are eligible for low-cost — and sometimes free — medical coverage. Under Medicaid, a mother earning less than $17,600 per year who also has one child less than six years old qualifies for free health coverage for her child. Check out InsureKidsNow.gov to see if you qualify.

When it comes to health insurance, it pays to stay current with coverage vernacular and to search for any means of saving money — without sacrificing coverage.

Flexible Spending Plans

Flexible spending plans are optional plans that employers may be able to offer employees. Basically, you determine a set amount for your employer to withhold from your pretax wages that you can then spend to cover medical and dental costs that your insurance doesn't cover. This saves you 15 to 35 percent a year on co-pays, deductibles, braces, caps, laser eye surgery, over-the-counter medications, and other health care expenses.

Essential

Much like credit reporting agencies, a medical information bureau collects personal medical data and then sells it to life, health, and disability insurance companies. The information they gather may or may not be accurate, and it may not even belong to you. Log onto mib.com or write to MIB, P.O. Box 105, Essex Station, Boston MA 02112, to request a copy of your report. If you find errors, ask them to make corrections.

The only catch is that you have to determine an amount for the entire year. In many cases, funds not spent within 14.5 months are forfeited to the government. Still, it's wiser to start small and adjust upward than not to participate at all. This can be a real boon, particularly if you know in advance that you or one of your children will need braces or glasses in the next year.

Even if the deadline was approaching and you still had $400 in the account, you could buy over-the-counter drugs, such as aspirin, or prescription sunglasses to use up the funds. Just be sure to save all your receipts so you can document your spending.

COBRA and HIPAA

Consolidated Omnibus Budget Reconciliation Act (COBRA) is a plan employers are legally required to offer employees who are fired or who leave for any reason, even if it's to transition into part-time work. Employers who employ more than 20 people must offer you (and your children, if they have been covered under the plan) health coverage at their cost, plus 2 percent, for a period of 18 months.

Legally separated, divorced, or widowed spouses are eligible for 36 months. However, you must accept the offer within 60 days (30 days if your spouse died), and don't wait! You won't be able to find independent coverage cheaper, and COBRA protects you, and your children, during transitions.

The Health Insurance Portability and Accountability Act (HIPAA) was created to protect your access to health insurance. Under HIPAA, anyone leaving a group insurance plan is guaranteed coverage as long as you were covered for at least 12 months and switch health care providers within 63 days.

Take advantage of COBRA and HIPAA to ensure that you and your children will not be turned down or made to wait for coverage. Allowing a break in insurance gives insurance companies the opportunity to deny coverage, or withhold specific coverage, on the basis of pre-existing conditions.

Health Savings Plans

If you are self-employed, you can open a health savings account (HSA) that combines high deductible, catastrophic health insurance with a tax-favored savings plan. You make a tax-deductible contribution each year to the HSA to cover medical bills. If you don't use the funds, they will accumulate. The maximum amount you can contribute changes annually — currently it's around $5,500 for a family. This option is best for healthy families who have enough money to cover basic medical expenses. Talk to your financial advisor and an insurance broker about whether this plan is a smart move for you.

How to Save Money on Health Insurance

If you and your children are in good health, you can opt for a large deductible. It's a gamble, but may be worth the risk. You can find the best prices by comparison shopping on the Internet. Many health insurance sites offer side-by-side comparisons that will give you an idea of what to expect. When you've done your homework and are ready to purchase, find a reputable broker.

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