There's an important note in your email inbox that you've likely brushed aside. No, it's not the spam about penny stocks or that thinly veiled pitch for a pyramid marketing scheme. It's a note from your friendly human resources department reminding you about the annual health-care open enrollment deadline.

Ready or not, for many employees, this is the only shot for the next 12 months to modify health coverage.

Even if your plan hasn't changed one bit, don't assume that you'll automatically be enrolled in the same plan next year if you do nothing. Some companies automatically put those who don't fill out paperwork into a default plan. Plus, you really should review the choices you made -- perhaps many moons ago -- to make sure you're getting the most out of your benefits.

Pay less for more -- but not too much
To get the most out of your insurance -- the highest amount of coverage at the lowest out-of-pocket price -- you've got to think like an actuary. (If you are an actual actuary, great! You're already dressed for the job.) Your key inputs are:

  • Premiums
  • Coverage amounts
  • Your foreseeable out-of-pocket costs
  • Any unforeseeable (but mildly guess-able) out-of-pocket expenses

The goal is to pay the least amount in premiums for the highest level of coverage you know you'll use -- but just enough coverage to avoid financial ruin in the unlikely (but not entirely impossible) event that a medical disaster strikes.

Got that?
Yeah, I had to re-read that sentence four times, too.

We know that packet of insurance information is not riveting reading. Dealing with such mundane financial tasks may come up only once a year -- but getting it right versus getting it almost right can mean the difference between thousands of extra dollars to invest versus thousands of extra dollars earmarked for medical care.

Health-care advice for every life stage
For advice on navigating the complicated world of employer-sponsored health care, I consulted a top source in employee benefits -- the one who sits just a few desks away from me at The Motley Fool. During her 11 years in human resources, our own Angelique Keenley has reviewed every kind of health plan there is.

As you review, keep in mind that future medical events (a baby, chronic illness, major orthodontia, a nose job -- don't worry, we won't tell) may affect which plan you choose this year. List any anticipated events and look into how each is covered under various plan options.  

Here's some general advice based on life stage, general health, and typical coverage options.

Singles: In good health and have no dependents? Milk these carefree years while you can. The least expensive option (likely an HMO) should provide all the coverage you need. You'll save the most money by sticking with in-network health-care providers, especially your primary care physician, who can provide referrals to specialists when needed. (Good health hopefully means such visits are infrequent. Plus, most HMOs don't require a referral for an OB/GYN.) If staying in-network isn't a burden, additional savings can be had by picking the plan with a higher out-of-network deductible, Angelique says. Check first to make sure your favorite doctors are part of your plan. If not, opt for the lower out-of-network deductible options. PPOs offer better coverage (and no referral rigmarole) if you require regular visits to specialists (e.g., a chiropractor or a Jungian therapist).

Couples: Make a date to review both of your employer-sponsored plans and compare the costs of keeping your coverage separate versus having both of you on one of your plans. "Many employers now offer cash to employees who opt out of coverage," Angelique says, so you might be able to come out ahead by using the opt-out cash to cover the premiums on the plan you pick. On the flip side, a growing trend is to charge a "spousal surcharge" to discourage workers from adding a significant other (who could get coverage at their own workplace) to their plan.  

Families: If both you and your spouse work, your options also include having one spouse stick with his or her company's plan while the other takes the "employee and children" option, or planting the whole family tree in one plan. Be sure dependents are eligible for coverage in your plan before yanking them out of an existing insurance program. The size and health of your brood can help you pick between HMO and PPO options. (Don't forget to factor in opt-out cash incentives.) Angelique has gotten mixed reviews from families on which is best; however, she recommends a low-deductible PPO plan for families with children who have special needs or whose kids are away at college (with less access to in-network doctors) and still on their plan.

Empty-nesters: The kids and their health-care costs may have moved out long ago, but the maladies of aging aren't as easy to shake. Prescription costs and the price of seeing specialists are the two biggest factors aging workers should weigh, Angelique says. Pick the plan with the lowest prescription co-pays, and watch out for spending caps on medication. Don't automatically dismiss plans with higher premiums -- you may make up for the added up-front expense by limiting your out-of-pocket costs, and you may gain the flexibility to see specialists without the hassle of getting a referral.

Surf for a second and third opinion
Mind-numbing? Yes. Crucial? Double yes.

  • Get tips on picking the right plan with the Health Benefits Priorities tool at
  • Find out how your PPO and HMO rate with the National Committee for Quality Assurance's Health Plan Report Card tool. The National Association of Insurance Commissioners provides a map with links to state insurance departments where you can check out consumer complaints.
  • Note any new plan options. More and more employers are opting for high-deductible plans, some with a pre-tax health savings account (HSA) component. Some companies encourage participation by matching a portion of your pre-tax contributed funds. The Motley Fool has advice on determining whether an HSA is the right choice for you and your family.
  • Don't leave good money on the table. If your employer offers a medical or dependent-care flexible spending account, seriously consider contributing at least something. Such accounts enable you to pay for out-of-pocket medical and dependent-care (also child care) expenses with pre-tax money you set aside every paycheck. Get the details in "Year-End Money 'Must-Dos.'"

It might not be your favorite way to spend time, but figuring out your best health plan options is too important to ignore.