There are many big decisions to make as newlyweds. As you combine lives, you will have to make choices about your home, finances, and your family. You will also have to plan for healthcare—including your health insurance options. There are several things to consider before signing up for a plan, though. Here's what you and your new family need to know to make the right choices.
How to choose a health insurance plan
Once you get married, you will have to make some tough decisions about health insurance. You will have three options to choose from: keeping separate health insurance plans, joining your spouse’s plan, or having your spouse join your plan.
The problem is, not all companies allow spouses to join their employer sponsored healthcare plan. A 2016 study from Mercer found 11% of large employers exclude spouses who may have access to another health insurance plan. For companies that allow it, you may see a spousal surcharge, which is usually about $100 per month, according to the study.
You will also have to consider enrollment periods. Getting married is considered a qualified life event that may trigger a special enrollment period. These periods give you 60 days to sign up for a private health insurance plan or 30 days to enroll in an employer's plan. To qualify for a special enrollment period, though, you may have to show proof of a life event—like your marriage certificate.
For single coverage, the average annual premium was $7,188 in 2019, according to the Kaiser Family Foundation. Joining the same health insurance plan may be more affordable. But you will need to compare premiums, deductibles, coinsurance, and copayments to find out.
One benefit of joining the same health insurance plan is you may meet the plan’s deductible faster, which could mean fewer out-of-pocket expenses for the year.
When to consider a family plan
As your family grows—either from combining health care plans with your partner or planning to have children—the cost of health insurance will increase. Last year, the average family paid $20,576 for health insurance premiums, according to the Kaiser Family Foundation. The report says premiums have increased by 22% since 2014.
That's a massive financial burden for any family. But you should consider the plan’s full out-of-pocket maximum costs before making a decision. Depending on your deductible, your family could pay a lot more—or a lot less—on out-of-pocket medical expenses. You should also look at co-payments, co-insurance, and see which providers the plan includes.
If you choose a high-deductible health insurance plan, you can see if you can pair it with a health savings account (HSA). These accounts allow you to save pre-tax dollars for qualified medical expenses. Your employer also may offer a flexible spending arrangement (FSA), which could also cut back on out-of-pocket costs.
Don't wait on health insurance decisions
As newlyweds, it may be more exciting to plan things like trips and dinner parties. But you shouldn't push your family's health insurance to the back burner. By procrastinating, you could miss a key deadline, which could leave you with a gap in health coverage. The sooner you start comparing options, the easier—and faster—the decision will be.
Disclaimer: the content presented in this article are for informational purposes only, and is not, and must not be considered tax, investment, legal, accounting or financial planning advice, nor a recommendation as to a specific course of action. Investors should consult all available information, including fund prospectuses, and consult with appropriate tax, investment, accounting, legal, and accounting professionals, as appropriate, before making any investment or utilizing any financial planning strategy.