We’re in the midst of open enrollment season. This means now is the time to take a closer look at your current health plan and decide if you want to make any adjustments to your benefits for the upcoming year.
It’s no secret that the COVID-19 pandemic has encouraged Americans to take a second look at their health benefit plans and rethink how they use them. One survey suggests that 35% of Americans are choosing to make changes to their health benefits because of the impact of the pandemic.
Before 2020, it may have made sense to renew your current health plan and not spend too much time worrying about comparing prices or plan details during open enrollment. However, that's no longer the case for many who are looking to make valuable life choices that benefit their dependents or their well-being.
You may be wondering: But how do I understand how to maximize my benefits? Before you decide to re-enroll in the plan you’re currently in, there are a few things you should keep in mind.
Let’s take a look a closer look at a few of our open enrollment tips:
Know the deadline
It’s important to note that there isn’t a standard open enrollment date for companies if you receive your benefits through your employer. These open enrollment dates and deadlines may vary and not follow the norm. If you’re unsure when yours is, you’ll want to check in with your company so you can plan accordingly.
If you’re looking to receive benefits through the Affordable Care Act, the open enrollment period is between November 1st to January 31st. However, some states may vary. For the most accurate dates, we recommend checking their website.
There is no open enrollment period for Medicare or Medicaid. You may sign up for these benefits at any time.
Reflect on the previous year
As we get older, our needs and requirements start to change. Before you re-enroll in the same plan you were in last year, you should take some time to reflect on how you used your health insurance benefits this year and decide if it’s still a good fit for you.
Ask yourself: was something missing from your insurance benefits? Were you happy with your service provider? Did you over-utilized or underutilized certain aspects of your plan? Is there something you wish you had more of?
If you plan on having kids in the upcoming year or did this year, you may decide to take out a life insurance policy or disability insurance to protect your income.
“Ask yourself: was something missing from your insurance benefits? Were you happy with your service provider? Did you over-utilized or underutilized certain aspects of your plan? Is there something you wish you had more of? ”
If you’re visiting the doctor more frequently and the copays are starting to add up, you may decide to switch from an HDHP to a PPO.
Maybe, you didn’t opt-in for vision insurance last year but think it might be good to add in the upcoming year.
If you don’t take the time to evaluate your health benefits and look for ways to improve, you can be leaving a lot of money on the table or risk making a costly mistake. Plus, if you miss the open enrollment period because you didn't know the deadline, you could risk having to wait an entire year to make these changes.
Taking the time to evaluate your needs as an individual can help you save money, develop better personal habits, and help you learn how to maximize your health benefits.
Check for health benefit changes
Changes in your benefits can happen. If you aren’t careful, they can happen without you even realizing it. This means you could be auto-enrolled in a plan that doesn’t suit your individual needs anymore.
You'll want to make sure you’re checking more than just the premium costs that you’re paying every month. Even though some changes may be small, like a change in price for copay payments, they might have a negative impact on your individual needs.
It’s never good to assume that your insurance coverage stays the same as the year prior.
Understand the different plans
When looking through insurance plans, you’ve probably seen the acronyms: “PPO, HMO, and HDHP.” These determine the type of health coverage network you’re a part of and the health providers you’re able to see.
A PPO provides you with the most flexibility. You still have access to a network of providers. However, you don’t need to stick to those to receive coverage. An HMO usually has lower premiums than a PPO but requires you to stay in the network. That means you can only see a particular network of doctors and still receive health coverage.
If you’re looking to save money on your monthly premiums, HMOs are usually cheaper than a PPO. However, they provide you with no coverage outside of your network.
An HDHP stands for: “High Deductible Health Plan”. For this type of plan, you’ll have a lower overall premium but need to pay more of your health expenses out of pocket. If you’re someone who doesn’t go to the doctor as frequently, this might be a good solution for you to consider. I was on a high deductible plan pretty much all throughout my twenties and it served me well because I was young and healthy. One benefits an HDHP has is that you may be eligible to contribute to a health savings plan (more on this below).
Compare plans
Now that you understand the different plans, it’s time to compare them side by side. You’ll want to do the math, break down the costs, consider your needs, and look for a plan that suits you. From premium costs to copay costs and deductibles, there's a lot you'll want to consider.
Health insurance plans are broken down into bronze, silver, gold, and platinum. We recommend doing a side-by-side comparison to look over the different financial structuring and find one that suits your needs.
Remember: Every year comes with unique changes, and it’s crucial to continue to reflect on the previous year and decide for yourself if you need to make a change or receive open enrollment help.
When it comes to health insurance, my strategy is to understand my total cost. That's my premiums and my out-of-pocket maximum, which are both numbers you should be able to easily find as you shop around. Of course, what I actually spend may not reach this amount, but it's good to know what I'd be on the hook for in an expensive medical year.
“When it comes to health insurance, my strategy is to understand my total cost. That’s my premiums and my out-of-pocket maximum, which are both numbers you should be able to easily find as you shop around. Of course, what I actually spend may not reach this amount, but it’s good to know what I’d be on the hook for in an expensive medical year.”
There are certainly other ways to weigh your health care options and this shouldn't be your only consideration. I just thought I'd share a purely financial way of analyzing health insurance costs since many of you might also be shopping around too.
HSAs, HRAs, FSAs
If you're participating in open enrollment through your employer, you may have the option to open a type of health savings account. These accounts can help you pay for health-related and dependent-related expenses. They can also be great for managing your finances and taking advantage of pre-taxed dollars.
FSA stands for flexible savings account. These are savings accounts that you don’t pay taxes on and can be used for childcare services, chiropractor appointments, dental treatments, and so much more. This can be an option for parents looking for a way to pay for childcare or someone who feels they have extra expenses throughout the year.
HSA stands for health savings account. If you choose to go with an HSA, make sure you take the opportunity to invest the funds to keep up with the rate of inflation. This is one of the top open enrollment tips that people often forget to take advantage of.
HRA stands for health reimbursement account. An HRA is commonly paired with HDHPs. This is because you can use it to reimburse deductibles, copays, prescriptions, and more, which can help reduce your overall cost.
Before you sign up for one of these savings accounts, you’ll want to weigh out the pros and cons of each and see what each employer offers. Some employers will match your contributions, so you may also be leaving money on the table if you aren’t currently signed up.
If you feel that your health expenses are starting to add up and you’re looking for an easier way to manage these expenses, enrolling in one during the open enrollment period can help maximize your benefits.
Check for wellness resources
With the ongoing change in the work dynamic, companies everywhere are prioritizing wellness resources for their employees. From gym membership reimbursements, online resources, and tuition services. These perks were made to enhance your quality of life and should be taken advantage of if you aren’t already.
Wrapping up: how to maximize benefits
Take your open enrollment period as a time to reflect on your needs as an individual and look for ways you can enhance your wellbeing. As you plan and look for open enrollment help, always remember you have options when it comes to learning how to maximize your benefits.
We recommend making a habit out of reviewing, reflecting, and making meaningful changes to your health benefits every year.