How to Pick the Best Health Plan for the Whole Family

Choosing health insurance for a family used to be easier, with fewer options and fewer households where parents were each covered by their own workplace plans instead of picking a joint one.

But now more and more families must make a choice at every open enrollment period about how to cover the kids due to the advent of surcharges and exclusions for covering spouses who have the option of their own workplace insurance.

As of 2015, 17% of large employers have implemented or increased surcharges for spousal coverage. Half are considering doing it in the next three to five years, according to benefit consultant Aon Hewitt.

Eight percent have eliminated coverage altogether for spouses with other options, and 45% are considering doing so.

Deciding on health insurance for the kids is further complicated by the myriad of plans available today. They just keep evolving as health care law changes and costs keep rising—up 4.2% for 2016, according to benefit consultant Mercer .

"Now it's a lot more difficult because of network issues and deductibles," says Kathy Paez of the non-partisan American Institutes for Research.

Making the decision even harder is today's complicated family life. Do you choose a plan from one of the parents? One of the stepparents? Instead of two plans, a family could have four options, all with different costs and benefits.

Here are three of the top considerations:

1. Monthly Premium

Look first at the monthly cost, which typically starts at about $90 for the employee alone because of rules under the Affordable Care Act.

That figure should give you an indication of the generosity of the employer, says Mercer senior partner Tracy Watts. A $45-a-month plan, for example, would be heavily subsidized.

Also consider pricing tiers, which may include employee plus spouse and employee plus family.

If an employer offers a tier for employee plus children (versus employee plus family, which would include an eligible spouse), that is an indication that it is trying to give you a cost break, Watts says.

2. Deductibles and Out-of-Pocket Maximums

The next numbers to run depend on your family's individual needs and can help you decide if a high- or low-deductible plan is best.

One plan may charge a fixed fee like $20 for office visits, while another may charge 20%. One plan may charge $10 for your child's medication, but it could be $50 on another.

"If you have a kid with healthcare needs you can identify, that's great," says Karen Pollitz, senior policy fellow at the Kaiser Family Foundation, but she cautioned against forgetting about emergencies. "I can't tell you how many days we spent in the ER. You just don't know."

During the open enrollment period, most employers will offer access to an online tool that allows you to compare costs among plans.

3. Doctor Network

Just as important as cost is quality, which means seeing the doctors you want to see.

"I look for my pediatrician, and that's the plan that my family needs to be in," says Karen Frost, who leads health strategy and solutions for Aon Hewitt.

Divorced parents who live in different areas must carefully consider their out-of-network and emergency options. It is not unusual, for example, for one parent to live in Illinois and the other in Wisconsin, or for the family to have a kid away at college.

Health plans usually have provisions for when a child is away from home and has an emergency, Frost says.

Most experts caution against putting the kids on two plans, with one parent as a primary policyholder and the other as a secondary.

KFF's Pollitz tried that herself years ago and found it to be too complicated and expensive. "It's possible in some cases it would work, but what would be the cost?" she says.

Also, today's health insurers do not provide the same sort of coordination of benefits available years ago, when you could use the secondary insurance to cover a deductible or co-pay, and end up with no out-of-pocket costs.

"For most plans today, coordination of benefits says if you have primary coverage, that's it," says Mercer's Watts. "There's not a benefit to having double coverage."