Just like Christmas, open enrollment comes but once a year. For the uninitiated, open enrollment is a limited period (typically a few weeks in the fall) when you can enroll in health insurance and make changes to your plan.
If you have employer-sponsored healthcare, your employer will set open enrollment dates; for most companies, it’s a few weeks during the fall. If you get health insurance through the Health Insurance Marketplace, open enrollment is typically Nov. 1 to Jan. 15, though the dates vary by state.
Sitting through an open enrollment presentation or comparing the fine print of health plans certainly aren’t exciting tasks, but taking time to vet your options can result in huge savings. Follow these tips to get the most out of open enrollment.
1. Don’t just look at the monthly premium
You may be tempted to simply pick the plan with the cheapest monthly premiums, but it’s essential to consider the total cost of healthcare. Lower premiums mean higher out-of-pocket costs — and a resulting hit to your checking account. So be sure you know what your health insurance copays are for primary care and specialist visits, as well as for any prescription medications you regularly take.
Factor in the value of any discounts you’ll receive, too. Insurers frequently offer discounts for enrolling in a gym membership, for example. (Fun fact: Insurers don’t do this in hopes of transforming couch potatoes into gym rats, but rather to entice more already-healthy people to enroll in their plans.)
2. Think about the worst-case scenario
You need your health insurance most when something goes wrong. So it’s vital to consider your deductible, which is the amount you’ll pay before your insurance kicks in (though many preventive services are free), as well as any plan’s out-of-pocket maximum costs. Think about how prepared you are to shoulder these expenses should a health disaster strikes.
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On that note, a word of caution on health savings accounts (HSAs). HSAs are accounts you use to save for health-related expenses. They have plenty of terrific benefits, including a triple tax advantage: You invest pre-tax money, your money grows tax-free, and health-related distributions are tax-free. Plus unspent money rolls over from year to year.
But to contribute to an HSA, you need a high-deductible health plan (HDHP). Deductibles for HDHPs can run as high as $8,100 for self-only coverage and $16,100 for family coverage in 2024. In fact, a recent Urban Institute report cited the popularity of high-deductible health plans as a factor in America’s staggering medical debt.
HSAs can be a great tool for if you’re relatively healthy and have a decent emergency fund — provided that you’ll actually contribute to your HSA. But if you tend to have high healthcare costs or you’d struggle to pay a relatively minor health bill, consider a plan with higher monthly premiums so you’re better protected. If you opt for an HSA, budget for your monthly contributions on top of your premiums.
3. Consider having a checkup before choosing plans
Has it been a while since you last paid your doc a visit? Consider booking a checkup before you choose a plan.
If you get a clean bill of health, you may be OK with a plan that has high deductibles and lower premiums. But if your doctor identifies any potential issues, choosing the plan with lower deductibles could be the best bet.
4. Don’t assume the whole family should be covered under a single plan
About two-thirds of married couples have the same health insurance, but sticking to a single plan isn’t always the same move. Employers often cover a much larger share of health premiums for employees than they do for spouses and dependents. If you and your spouse both work for companies that offer health insurance, it may be cheaper to each stick with your own company’s plan.
Previously, a loophole in the Affordable Care Act made it difficult for spouses and dependents to qualify for Health Insurance Marketplace subsidies if they were eligible for a family member’s workplace plan. But because of new “family glitch” rules implemented earlier this year by the Biden administration, family members may qualify for subsidies if job-based health care doesn’t meet the affordability standards spelled out in the ACA.
How to compare health plans
If you’re covered by workplace health insurance, comparing plans is relatively easy. You’ll often only have two or three plans to choose from, and your HR department will likely provide a summary of benefits.
It gets a bit more complicated if you’re purchasing coverage on your own or you’re trying to compare your employer’s plan against alternatives. The best way to get started is to go to HealthCare.gov and enter your ZIP code. You’ll then be able to compare premiums, deductibles, and out-of-pocket maximums. You can also look for plans that your doctor accepts and find out whether specific medications are covered.
Virtually no one looks forward to open enrollment. But doing your homework now can help you stay physically and financially healthy.
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