The Health Wealth Connection Part Two

In last week's column, I highlighted the importance of good health habits - including a healthy diet and exercise program - and how it can help you achieve greater wealth. This week's article stresses the importance of insuring your most important asset, and what could happen if you don't.

Health - good or bad - influences everyone. When we are healthy, we tend to have more energy and may be able to accomplish more at work, at school and at home. Generally, we are able to avoid spending significant amounts of time visiting doctors, except for our regular periodic checkups. When we are ill, we likely need to spend time away from work, which may reduce our income, or spend time away from school, which may cause grades to suffer. Typically, the longer the illness, the greater the loss. Also, doctor visits tend to increase, along with medication. If you are not properly insured, a loss in income coupled with an increase in expenses results in a decrease in your wealth.

Unfortunately, even when we have health insurance, we don't always know how much of our expenses might be covered due to illness or injury, or how much we really need. Here are some tips from Lyfebank to help you gain a better understanding of your needs:

Start with taking stock of general health, then review your plan. If you have an employer plan, look at preventive care coverage and copayment/coinsurance amounts for basic services, such as doctor visits. Enroll in the company cafeteria plan to pay the coinsurance and compayment amounts using pretax funds. Your savings will depend on your tax bracket, but can be 25 percent or more.

Then, look for gaps in the coverage that may require you to pay a substantial amount of of out of pocket expenses for a treatment that might be more likely for you to need, such as payment for maternity care. If you can, see if your employer will make the same contribution as your group plan in the form of a pretax contribution, which will enable you to use the funds to purchase an individual or family policy and still shield the employer from any insurance liability for your plan. This can be achieved using a special type of health reimbursement arrangement, or HRA.

Individual policies are typically less expensive than comparable group policies, particularly for smaller employers. Also, they allow for more control over your choices and, in most cases, the coverage is much more affordable for your dependents. Be sure that the HRA plan keeps the employer separated from your insurance decision and allows you to keep any contributions that you save when you leave the employer for any reason.

And, don't forget to review your disability and life insurance policies in the process. If you need a refresher, review the link to the article . By reviewing your policies, now, and continuing your healthy lifestyle, you'll likely enjoy greater health and wealth in the future.