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Monday, February 22, 2016

A Guide to Evaluating HSA Custodians

By Amy Fontinelle

OK, you've decided to open a health savings account (HSA). If you're doing so on your own, you can open your account at any bank, credit union, insurance company or brokerage that offers these tax-advantaged vehicles for saving for medical expenses. If you open an HSA through your employer, you might be automatically enrolled with a particular HSA manager, but you have the option to switch.

Institutions that manage HSAs are called HSA custodians or HSA administrators.Whether you have to choose an HSA custodian or you’re wondering whether the one your employer chose for you is any good, there are key features to evaluate. With dozens of options available, how do you choose?

(For a quick backgrounder, read our tutorial How HSAs Work.)

Paying Fees

Like many a financial account, HSAs come with a long list of associated fees. Some you can avoid, and some you can’t. It’s important to know how not to incur the unnecessary ones, and how much the required fees will eat into your HSA balance. Here are the types of fees you’re likely to encounter, based on the schedules of three popular HSA custodians.

	Health Savings Administrators	Bank of America	HSA Bank
Fee type
Administrative	$45/yr. ($3.75/mo.)	$54/yr. ($4.50/mo.)	$30/yr. ($2.50/mo.)
Custodial	$0.625 per $1,000 every three months	n/a	n/a
Withdrawals via paper check	$10.00	n/a	n/a
Excess contribution correction/return	$25.00	$25.00	$25.00
Non-sufficient funds (NSF)	$30.00	n/a	$30.00
Overdraft	n/a	$25.00	n/a
Transaction correction	$25.00	n/a	$25.00
Wire transfer	$25.00	n/a	$25.00
Account transfer/rollover to another custodian	$25.00	$25.00	n/a
Account closure	$25.00	$25.00	$25.00
Replace lost or stolen debit card	$12.00	$0.00	$12.00
Stop payment	$25.00	$25.00	$25.00
Copy of debit card merchant receipt	$25.00	n/a	$25.00
Duplicate copy of tax statement	$4.00	$5.00	$4.00

HSA Bank offers a particularly good outline showing how its customers can avoid fees.

HSAs that offer an investment option will have a separate fee schedule. Here, you’ll encounter fees such as online trading commissions for stocks and ETFs, annual fees, low-balance fees and mutual fund fees. These fees are similar to those you’d encounter in any brokerage account. You may be able to avoid them by selecting commission-free investments and keeping your account balance above a stated minimum. (For further reading, see How to Effectively Utilize Health Savings Accounts.)

“You don’t want to choose an HSA custodian that charges you too often or too much,” says Stephen D. Neeleman, MD, founder and vice chair of HealthEquity, one of the oldest and largest health savings account custodians. “Find out whether fees are based on the amount of money in your account or on how much you contribute monthly, or whether it’s a fixed fee independent of how much money you have in your HSA. Ask whether the fees are waived once the balance reaches a certain level and whether your employer will pay the fees if the account is offered through them.”

For any fees you do incur, ask your HSA custodian about paying them by check from another source of funds rather than deducting them from your HSA balance, thus depleting your account of funds that grow tax-free.

Earning Interest

Some HSA custodians pay the same interest rate, regardless of your account's cash balance. Others have tiered rates, meaning the interest you’ll earn depends on how high your balance is. You might earn 0.05% annually if your balance is $0–$2,499.99; 0.1% if your balance is $2,500–$4,999.99; and 0.2% if your balance is $5,000 or more. Make sure your HSA custodian is a member of the Federal Deposit Insurance Corporation (FDIC), so your funds are protected in the unlikely event the bank fails.

As with most bank checking and savings accounts, you’re unlikely to find an HSA custodian whose interest rates are high enough to keep up with inflation, even if your HSA balance falls in the highest tier. To earn more, you’ll want to invest any part of your balance that you can afford not to touch for medical bills for several years. And that brings us to another factor to consider in choosing your HSA custodian.

Investment Options

“I like banks that have brokerage accounts linked to the bank account, so once you’ve accumulated enough to cover your deductible for the year, you can invest your money in anything that is available on the brokerage platform,” says Michael E. Chadwick, owner of his own investment advisor firm in Unionville, Conn. You only want to invest the part of your HSA balance that exceeds your health insurance deductible, in case you have a big medical expense one year.

Plan not to touch any balance you invest for as long as you can. “If you don’t use it up, later in life you can roll it into a retirement plan and live on it,” Chadwick says. (For more details on this topic, read How to Use Your HSA for Retirement.)

The types of investments that are good for your HSA "depend on your investment sophistication and risk tolerance," Chadwick says. He suggests that most people be cautious and avoid high-risk instruments, aiming for a 3% to 4% return on the conservative side and 6% to 7% if you’re comfortable with a balanced investment strategy.

More specifically, look for a variety of low-cost funds that will let you invest in the S &P 500, U.S.Treasuries, and other blue-chip choices. Investment costs such as Fund expense ratios and other investment costs are key because they can cut into your long-term returns. Avoid investments with early withdrawal fees unless you are sure you’ll hold them long enough to avoid the fee.

Choose an HSA administrator that offers these options – and maybe more, in case you want to change your investment strategy later. Similar to FDIC insurance, make sure the investment accounts are SIPC insured, meaning that if the administrator goes bankrupt, you can recoup your funds (up to a certain amount). SIPC insurance does not protect you against losses because the stock market declines, of course.

Contribution Strategies

If you don’t like your employer’s choice of HSA custodian, you can change. However, there are two big reasons why you might not want to close that account: matching contributions and tax savings.

“If your employer matches your HSA contributions, it’s better to keep contributing to their default HSA account and open up a secondary HSA with your preferred institution,” Neeleman says. “Then you can roll over all the funds from your employer-funded HSA into the secondary HSA in an annual sweep. Your employer will most likely only contribute to the HSA they’ve set up, and you don’t want to miss out on the free money.” You don't have to pay income tax or FICA (Social Security and Medicare) taxes on that match, remember.

You're also gaining money, in a sense, if your HSA contributions come directly out of your paycheck: They're considered as being made with pre-tax dollars, and so they effectively reduce your gross income for federal and state income taxes, and for the FICA contributions as well.

If you’re self-employed or you don’t have the option to contribute to your HSA through payroll deductions, all is not lost. You can contribute on your own. You’ll be contributing after-tax dollars, but you’ll then claim your contribution as an above-the-line adjustment to your gross income on your tax return's form 1040 and attach IRS form 8889, Health Savings Accounts, showing how your calculated your deduction. However, you will not get the FICA tax savings that you would get by having your contributions deducted from your paycheck.

The Bottom Line

Choosing an HSA custodian is similar to choosing a place to open a checking account, a savings account or a brokerage account. You want to find an HSA administrator with low fees (especially for expenses that regularly recur, such as maintenance fees and custodial fees), relatively high interest rates for short-term and cash balances, and low-cost investment options for long-term balances.

And of course, the custodian should provide an easy-to-use website and basic account protections like FDIC or SIPC insurance. Online tools such as HSA Search can help you get started.

Top Financial Steps to Take on Disability

By John P. Schmoll | February 19, 2016

Going on disability, whether it be short or long-term, is a challenging and often stressful experience. Many things can potentially be impacted, from your health to your job to your finances. If you are disabled on the job, you may think you can count on disability benefits through the Social Security Administration (SSA). You can’t count on that as a possibility. According to the SSA, over 2.4 million individuals filed for benefits in 2015 though only 775,000 were approved. With that in mind, you may wonder what financial steps you need to take on disability. It will depend on the situation though following are some of the general things to consider.

Find Out What Coverage You Have

When you’re about to go on disability you first need to determine what kind of coverage, if any, you can access. The most common coverage for many will be through The Family and Medical Leave Act (FMLA). FMLA is available through qualifying employers and offers up to 12 weeks over a single 12-month period. There are a few things to remember with FMLA. Some employers will require you to use any paid leave (vacation and sick days) you currently have, as the initial part of the 12-week period. They also may require proof of a serious medical need. (For more, see: Types of Social Security Benefits.)

It doesn’t stop there. If you have disability insurance, you will need to determine what's required to take advantage of benefits. If you believe you'll need longer disability coverage, you will want to reach out to the Social Security Administration. "Contact the Social Security Disability office in your state. You may qualify for benefits if you expect your condition to last more than one year, and you are not able to work at any job,” says Kevin Haney of Growing Family Benefits.

This work may seem overwhelming. Don’t let that hold you back as it’s vital to best prepare yourself for your time on disability. Haney also points out the possibility to upgrade your health insurance through special benefits available to those with lower incomes or those who meet certain qualifications. (For more, see: What Are the Maximum Social Security Disability Benefits?)

Cut Unnecessary Spending

One thing is certain when you go on disability, your finances will be impacted. It’s likely you won’t be bringing in the same level of income so you will want to prepare for that eventuality. Key in that is cutting your spending and living by a relatively modest budget. “Cut all unnecessary expenses. Your income is about to plummet, and your medical expenses may explode. This is not the time for extras like cable TV, smart phones, etc.,” Haney says.

This may seem harsh. It's not. It's meant to help you weather the financial storm you may face while on disability. If you're prepared, it will help mitigate the fallout though the key is to watch over your spending so as to not end up in a worse situation. (For more, see: Top 6 Features of a Great Disability Policy.)

Take Advantage of Benefits

Depending on the community you live in and professional or social associations you’re a part of, you may qualify for additional benefits. This will vary based on your location, specific situation and need. Haney points out that some states offer additional temporary coverage or possible unemployment coverage if your spouse loses their job while caring for you. In short, there are numerous avenues for assistance if you seek them out.

What to Do Prior

You may not always know when you’re going to need to begin disability. The best way to counteract that is to prepare for it to happen. If it does then, you'll be better prepared. If not, you'll be that much better off. (For more, see: Emergency Funds That Are Right for Your Tax Bracket.)

That can range from having a fully funded emergency fund to purchasing disability insurance coverage when healthy. “Buy a disability insurance policy while you are healthy. You will not qualify once you are already sick, hurt or pregnant. New policies exclude preexisting conditions for at least one year,” says Haney. It may be viewed as an unnecessary expense, though the last thing you want is to be in a situation where you need coverage but don’t have it because you didn’t want to spend the money to get it when you were healthy.

4 Reasons Why Waiting To Buy Life Insurance Is a Bad Idea

By Melissa Horton | February 21, 2016

Purchasing life insurance coverage is often low on the financial planning priority list for individuals who are young and healthy. The need to have assets set aside to cover final expenses, debts or income replacement for a spouse and dependents is hardly a pressing thought when health concerns and thoughts regarding the reality of mortality are not present; however, the cost of waiting to secure life insurance coverage can be insurmountable should something unexpected happen. Regardless of the type or amount of life insurance coverage purchased, there are compelling reasons to have coverage sooner rather than later.

Ease of Qualifying

The majority of term and permanent life insurance policies require a degree of medical underwriting, which often includes the completion of a truncated medical exam and questions regarding personal medical history and family health history. An individual who has had past medical issues will face difficulties in qualifying for a new life insurance policy as the insurance carrier will view him as a higher risk. Additionally, an older individual may not be eligible for coverage after a certain age, regardless of his health profile. Applying for life insurance coverage when health and age are of no concern allows an individual to qualify without the risk of being declined from an underwriting perspective.

Cost Savings

Life insurance coverage is based on the current age and health of the proposed insured. Insurance companies price life insurance coverage more favorably for individuals who are young and relatively healthy compared to individuals who are older and more susceptible to medical issues. For example, $500,000 of 30-year term life insurance coverage for a man at age 30 costs, on average, $34.54 each month. The same amount of coverage for a man at age 55 costs an average of $265.91 each month. Permanent insurance policy premiums can have even greater swings in cost based on age, as these policies are designed to last for the duration of one's life, unlike term policies. Cost savings represent a substantial benefit of securing life insurance coverage earlier in life.

Covering Future Expenses

The majority of young, healthy individuals are not actively thinking about ways to cover future expenses because those expenses may not yet exist; however, it is easy to cover final expenses, spousal income replacement, dependent care expenses and debt coverage with life insurance well before the need for coverage is apparent. Because life insurance death benefits are tax-free to beneficiaries, a policyholder has the opportunity to establish a financial safety net to cover future expenses fully at a much lower cost based on age and health.

Conversion Options

An individual who secures term life insurance coverage earlier in life often has the option to convert a portion of the policy to permanent coverage down the road. A life insurance conversion allows the insured to transition some or all of a term insurance policy into a permanent policy at the same health rating assigned at the time the original policy was issued. For example, an individual who has a $500,000 term policy can choose to convert $100,000 to a permanent policy, leaving him with the same amount of total coverage. The permanent insurance is still in place after the term expires, which is beneficial in estate planning and long-term financial planning strategies.

Because conversion of a term policy does not generally require medical underwriting, an individual avoids the risk of receiving a lower health rating based on current medical conditions and, therefore, higher premiums. Instead of undergoing a new medical exam and filling out a new health questionnaire, the insured simply completes a short application for conversion with the insurance carrier. The premium for the term insurance coverage is reduced based on the lower death benefit amount, while the premium for the new permanent coverage is based on the initial health rating and the current age of the insured. Conversion provisions within a term policy can be an incredibly valuable tool for an individual who is in need of long-term insurance coverage but may not qualify for a favorable health rating.

How America’s Dullest City Got Cool

One meeting, a visionary planner and old-fashioned Iowan cooperation reinvented Des Moines.

An enclosed system of skywalks was installed in the 1970s and 1980s, allowing Des Moines workers and shoppers to move from building to building downtown without bracing for cold weather. The plan backfired, though, when it deprived sidewalks and public pavilion of life and commerce.

he capital of Iowa has long had a reputation as one of the least hip, least interesting and least dynamic cities in the Western world, a dull insurance town set amid the unending corn fields of flyover country, a place Minneapolis looks down on and the young and ambitious flee as soon as they graduate. “Usually you are born here or marry into here or get transferred here,” says local entrepreneur Mike Draper. “Not many people come to chase their dreams. If they did, you’d be like, ‘What, you want to be an actuary?’”

But unbeknownst to many outside the Midwest, over the past 15 years Des Moines has transformed into one of the richest, most vibrant, and, yes, hip cities in the country, where the local arts scene, entrepreneurial startups and established corporate employers are all thriving. Its downtown — previously desolate after 5 p.m. — has come alive, with 10,000 new residents and a bevy of nationally recognized restaurants. A few blocks away, the uber-cool Des Moines Social Club draws 25,000 people a month — more than a 10th of the city’s population — to take part in everything from Shakespeare and avant-garde theater to live music and aerial gymnastics classes. Former Talking Heads frontman David Byrne showed up at its opening in 2014 because he thinks a city once called “Des Boring” may be America’s next creative hub.

The city that a legion of presidential campaign staffers and journalists are now swarming over is not the one many of them might recognize from cycles past. No longer just a drab dateline from the first battleground state, this metropolis is riding high in the polls. In recent years Des Moines has been named the nation’s richest (by U.S. News) and economically strongest city (Policom), its best for young professionals (Forbes), families (Kiplinger), home renters (Time), businesses and careers (Forbes). It has the highest community pride in the nation, according to a Gallup poll last year, and in October topped a Bloomberg analysis of which cities in the United States were doing the best at attracting millennials to buy housing. “Never mind California or New York,” Fast Company declared two years back. “By some important measures, Des Moines is way ahead of its cooler coastal cousins.” Not bad for a metro area of half a million located hundreds of miles from either mountains or the sea.

Cities don’t, as a rule, change their identities. They might accentuate a characteristic they already possess, but plow horses don’t become thoroughbreds. So how did Des Moines pull off the urban equivalent of a Triple Crown win?

Call it radical cooperation. Des Moines tapped the latent power of the heartland — a cultural ethos of working together and good manners that’s helped account for Iowa’s stability — and harnessed it to an ambitious plan to jump-start downtown by building cultural amenities, attracting creative class types and retaining big employers. Des Moines’ civic leaders realized the city wasn’t going to transform itself without a clear long-term vision, so in an almost hyper-Iowan way they did something almost unheard of. They took it upon themselves to bring in an outside visionary and then tied together the destinies of the various projects he envisioned, forging an almost ego-less, private-sector-driven renaissance that has continued to flower over the past decade.

Seventy years ago, a Saturday Evening Post profile likened Des Moines to “a decent kindly man with a fixed income [who] has learned his station.” Even before the I-235 punched its way through the north side of the city, encouraging a late-1950s commuter exodus to suburban West Des Moines and Altoona, nobody had lived downtown, even though most everyone worked there.

“There were women in hats and white gloves at the tea room or the department stores during the day, and men in hats and ties working in the insurance companies and banks,” Michael Gartner, owner of the city’s Triple-A Iowa Cubs baseball team, recalls of his childhood in the late 1940s. “At 5 o’clock they would get onto their buses and go home.”

Highways killed the downtown department stores, and by the late 1960s the central city had become little more than an office park for its leading industries: insurance, agricultural support services, and government. In the 1970s and 1980s, the city tried to turn things around by installing suburban conveniences, including an enclosed system of skywalks, allowing people to get from building to building and through new indoor shopping malls without putting on their coats, which only furthered the abandonment of the sidewalks and the storefronts. On Friday and Saturday nights, bored teenagers raced their cars through the empty streets, circling the downtown loop from Grand to Locust Avenue over and over again. “This was supposed to be a menace to society,” Des Moines Register columnist Rekha Basu recalls. They would have been perhaps a greater menace had there been some risk of hitting a pedestrian.

By the late 1980s, the city’s leaders realized they needed to do something uncharacteristically bold. The big private employers — the insurance companies Principal, Nationwide, EMC and Wellmark; publishing giant Meredith (Better Homes and Gardens); Wells Fargo — had a lot riding on the central city, where they maintained offices for tens of thousands of employees. “They said, 'Look, we have a tremendous investment here and we want to be able to attract and retain people,'” says Mary O’Keefe, who was Principal’s vice president for marketing for 25 years. “The business community here is really strong and responsible and they took leadership on these things out of enlightened self interest.” They also realized they needed fresh ideas.

Ironically, the critical link was made by art collector Melva Bucksbaum, whose husband, Martinpioneered the suburban shopping center, founding General Growth Properties, the mall-making behemoth behind everything from Tyson’s Galleria in suburban Washington, D.C. to Chicago’s Water Tower Place. In the spring of 1987, Bucksbaum took a well-timed call from a friend of hers, architect Bruce Graham, whose buildings — including the Sears Tower and John Hancock Center — had transformed Chicago’s skyline. Graham had a colleague to recommend, an innovative urban thinker looking for a Midwestern city to experiment on. Bucksbaum was thrilled. Soon that visionary, Mario Gandelsonas, found himself in a car hurtling up Fleur Drive from the Des Moines International Airport, headed for downtown.

He was horrified at what he saw.

***

In the summer of 1987, Gandelsonas was a 49-year-old professor at the Yale School of Architecture. Born and raised in Argentina and educated in Paris, he’d long had a fascination with Alexis de Tocqueville’s observations on the social groups and civic associations that give American democracy its distinct bottom-up power. “This civic spirit still exists,” Gandelsonas said, “but I think they are much more visible in a small city in the heartland than in a place like New York.” Graham, his mentor, suggested Des Moines might be the perfect place for him to put into practice his theories that the future of cities might lie in such unlikely places. Des Moines had strong cultural associations, an engaged leadership eager for new ideas and was surprisingly wealthy, meaning there were resources available to implement a good idea.

Gandelsonas’ urban planning philosophy was simple: don’t treat a city like a map that needs to be redrawn and corrected, but as a living organism with its own purpose, personality and innate characteristics. Successful interventions are ones that enhance and enable the organism’s socio-economic metabolism by removing blockages or creating new centers of potential growth. Instead of producing a total and comprehensive master plan for a city, Gandelsonas sought to identify a series of “moments,” civic projects that would enhance its fabric and unleash its potential. Or so the theory went.

The car ride in from the airport was sobering. At the central city’s gateway, what Gandelsonas called its “front yard,” travelers were greeted by a gas station and seven blocks of car dealerships set among radiator shops and pawn brokers. Downtown itself “looked like science fiction,” he recalls. “It was mid-morning and there were no people on the streets. At lunchtime, the streets were still empty, but for about an hour the skywalks were full of people. At 4:30 they started filling up again as everyone rushed to the nearest parking structure and then for half an hour there was a full-on traffic jam as 50,000 people tried to get to West Des Moines. Then the city was empty again. For me this was the perfect picture of a place that was totally dysfunctional.”

How To Get Yourself The Right Health Insurance

Health insurance isn't cheap, but it's really important. In addition to subjecting yourself to a potentially hefty fine if you don't enroll, an unexpected medical emergency could result in medical bills running into the six figures — which you'll be on the hook for.

The end of the health care open enrollment period is fast encroaching (January 31st!). If you're still unclear on how to get yourself insured and what you should be looking for in a health plan, here's a quick primer.

TAKE A DEEP BREATH

First, Understand Your Situation

Got employer insurance?

Congrats! Getting insurance through your employer makes your life a lot easier, but employers often offer different plans, and it's not always clear which makes the most sense for you. Check the terminology guide down below to start figuring out what works for you.

On the market by yourself?

Before you do anything, check if you're eligible for Medicaid and/or subsidies, using this tool.

If you're not eligible for Medicaid, then HealthCare.gov — or, if your state has set one up, your state marketplace — is your best bet, though not your only one: eSurance, HealthSherpa and others offer marketplaces that also allow you to search for plans.

Losing your employer-based insurance?

If you leave or lose your job, COBRA — which allows people to continue their old job-based coverage, at a higher cost — used to be the best option, but these days you're better off on the exchanges:

Because people have to pay the entire premium plus a 2 percent administrative fee, however, [COBRA] coverage can be a financial hardship for people who are scrambling to keep up with expenses after losing their jobs. Many of these people will likely be better off buying a plan on the state health insurance marketplaces, also called exchanges... Signing up for COBRA instead of an exchange plan could have serious financial repercussions.

[NPR]

DO THEY MAKE IT HARD ON PURPOSE?

Then, Understand The Terms

Health insurance plans are a lot of things. One of those things is not "easy to understand." Terms are often vaguely defined (HMO?) or seem to have similar meanings (how are deductibles and out-of-pocket maximums different, again?). Here's a breakdown of the some of the most important (and most confusing) terms:

What's In Health Insurance?

The key parts:

Network coverage: Different healthcare providers (doctors, hospitals, etc.) accept different insurance companies. If you go to a healthcare provider that's not in your insurance company's network, you'll probably end up paying more of the cost.

Premium: What you pay per month.

Deductible: The amount you have to pay before your insurance company starts paying. This differs from the out-of-pocket maximum (see below).

HMO vs. PPO vs. EPO

HMO (Health Maintenance Organization) and EPO (Exclusive Provider Organization) plans differ mainly from PPO (Preferred Provider Organization) plans in how strict they are about covering doctors outside the insurance company's network.

Here's a quick breakdown of the main features of each, and Nerdwallet put together this helpful chart:

Of course, insurance companies being insurance companies, these rules aren't set in stone:

Some plans labeled as PPOs don’t offer out-of-network services at all, experts say. On the other hand, some HMOs have an out-of-network option that makes them seem similar to PPOs.

[Washington Post]

Deductible vs. out-of-pocket maximum

If you look up "deductible," chances are the definition will read something like this:

A deductible is a dollar amount your health insurer may require you to pay out-of-pocket each year, before your health plan begins to pay for covered medical expenses.

[eHealth]

But then you look at your insurance options and see that the deductible and out-of-pocket maximum amounts are... different. Here's why:

[Out-of-pocket maximum] is the most you will ever have to pay out of your pocket for health care during the year, not including premiums, but definitely including the deductible AND the copays and coinsurance you will continue to pay after you hit the deductible. If you hit your OOP for the year, your insurance will pick up 100 percent of costs thereafter.

[Consumer Reports]

Copays and coinsurance

As the "co" implies, these are payments that you share with your insurance company. Copays are the (relatively) small fee you pay during doctor's visits, and they are generally separate from your deductible — though not always, so make sure to check.

Coinsurance is the payment plan that kicks in once you've paid your deductible:

Let’s say you have a policy with 20% coinsurance. That means the insurance company will pay 80% of covered services after your deductible has been met and you pay the remaining 20%. But you won’t have to pay that 20% forever. You pay until you reach your out-of-pocket maximum.

[Cigna]

Catastrophic coverage

A "catastrophic" insurance plan isn't a plan that offers more coverage than the average plan — it offers a lot less. Catastrophic plans take the tradeoff of a high-deductible plan to the extreme:

Catastrophic health insurance plans have low monthly premiums and a very high deductible — $6,850. They may be an affordable way to protect yourself from worst-case scenarios, like getting seriously sick or injured. You pay most routine medical expenses yourself.

[HealthCare.gov]

ACTION!

Finally, Figure Out What's Right For You

HMO, PPO, or EPO?

Consider what your wants and needs are:

If you prefer to have your care coordinated through a single doctor, an HMO plan might be right for you. If you want greater flexibility or if you see a lot of specialists, a PPO plan might be what you’re looking for. And if you're interested in saving money by using a smaller network of doctors and hospitals, an EPO plan might be a good fit.

[Blue Cross Blue Shield]

Since different HMOs, PPOs and EPOs vary in what they actually offer, evaluate plans according to these questions:

- Is there out-of-network coverage?
- Does that out-of-network spending accrue toward the member’s out-of-pocket maximum? Legally it doesn’t have to, but some plans include it.
- Do members need a primary care physician gatekeeper?

[WebMD]

High-deductible or low-deductible?

Choosing between a high-deductible plan and a low-deductible plan is one of the most important decisions you'll make when purchasing insurance. High-deductible plans have lower monthly premiums, but if you do run into major medical expenses, you'll be on the hook for a lot more money before your insurer takes over.

On the other hand, if you're generally healthy, paying the high monthly premium for a low-deductible plan might not make sense. Recent changes to preventative care pricing under the Affordable Care Act also make high-deductible plans more affordable:

Because preventive care is free under the Affordable Care Act, and many policies allow you to see your primary care doctor with a copay rather than paying toward the deductible, a few visits to the doctor per year won’t be a financial setback for an otherwise healthy person.

[Forbes]

Does a catastrophic plan make sense for you?

In most cases, probably not. While these plans do offer the cheapest premiums, you're looking at a $6,850 deductible if anything goes wrong — and you're not eligible for subsidies:

[U]nlike the metallic plans, catastrophic plans don't offer potential discounts through tax subsidies... Even though they seem more expensive, bronze plans may still be a better deal not only because of the potential financial assistance available through the subsidies, but also because those plans must cover "essential health benefits," including emergency services and prescription drugs, which catastrophic plans may not cover until the deductible is met.

[Bankrate]

With that said, a catastrophic plan is, of course, better than no insurance at all. You'll still be paying the fine for not being insured — and you won't have any protection in the case of a medical catastrophe.