Every year, like clockwork, you probably get an email from your company's HR department telling you it's "open enrollment" time and you're able to change your healthcare plan. And there's a good chance that you, along with many of the rest of us, ignore that email.
Open enrollment only happens once a year, and if you're defaulting to your current plan because picking a new one seems like too much work, you could be making a mistake.
It's important to adjust your health plan to your lifestyle, and it's not just about picking the plan with the lowest deductible. You'll need to think about potential out-of-pocket expenses, any medical procedures you'd like to get done, and prescription coverage, among other things.
What Exactly Is "Open Enrollment"?
Most large companies in the US offer healthcare plans with an annual open enrollment period. We're told to select our plans during the first few weeks of work, but starting a new job is always a whirlwind of to-dos, and many of us choose a plan quickly without really understanding what we're committing to. Open enrollment is the only other opportunity we get to reevaluate our health benefits.
During this time, employees can either choose a new plan, or do nothing and let their previous plan roll over to the following year. Some places require you to pick a plan during each open enrollment period, so be sure to find out what your work's policy is. Depending on the company, open enrollment lasts anywhere from one week to one month and usually takes place at the end of the calendar year (between September and December) so that the new plan will begin on Jan. 1.
Why You Should Care
Plans change - and so do you. By not acting, you could potentially lose your insurance if it's not in your company's policy to roll plans over automatically. Even if that's not the case, your premium might have gone up, or your needs might be different now. Maybe you're considering getting LASIK. Perhaps you've had some problems with your back and you know you'll be making frequent trips to your doctor.
The bottom line is that aside from a "qualifying life event" like getting married or having a baby, the open enrollment period is your only chance to adjust your health plan, so you may as well use this time to reevaluate your priorities and options.
Three Questions To Ask
Before or during open enrollment, ask yourself these three questions to help you decide which plan you want to go with.
- How much did I spend? Look at all the costs associated with your current plan. What was your monthly premium? How much was your copay? Did you spend a lot on out-of-pocket expenses? Add these up so you know how much your plan cost you.
- Was I happy with my plan? Did your plan allow you to find a doctor easily, or were you limited by your network? Were you satisfied with your copay, or did it make you think twice about going to the dentist? Reflect on your past year - all of your appointments and any medical problems - and assess how you felt about your plan then and now.
- What are my priorities? If you have any new prescriptions, planned surgeries, or recent injuries, take those into consideration. Try to factor in as much as you can. It's impossible to predict what will happen, but you'll want to take some time to think through what you need most from your health plan this coming year.
Your Next Steps: A Checklist
If you decide to explore other plans, don't be overwhelmed. Break the process down into steps and cross them off as you go. Here are some checklist items to help you get started.
- Take note of your company's open enrollment dates. As soon as you get the email about open enrollment, mark down the dates on your calendar and give yourself a hard deadline to pick a plan. Ideally this should be at least a few days before enrollment ends.
- Make a list of your medical needs for the upcoming year. Jot down anything and everything that comes to mind, from wisdom teeth removal to a new pair of glasses. If you can anticipate where you'll be spending, you'll be better equipped to choose a plan that will help you save in those areas.
- Review and compare all the plans offered. Your company will probably provide some materials for you to look through, but visit the websites as well. Better yet, see if your company provides an online tool to help you compare plans side-by-side. Look at all the costs, including the co-insurance, deductible, out-of-pocket maximum, and prescription drug coverage. Don't forget that some plans offer discounts on health clubs, while others cover annual teeth cleanings or eye exams.
- If you have questions, talk to HR. Picking a plan can be challenging, so sitting down with someone from HR could clear up any confusion. Some employers even offer meetings during open enrollment.
- Look into a health savings account (HSA) or flexible spending account (FSAs). Your company might offer an HSA, FSA, or both. HSAs are typically associated with high-deductible plans and lets you save pre-tax money to spend on medical expenses that can roll over year to year. FSAs cover many out-of-pocket expenses, including deductibles, prescriptions, and insurance copayments, but must be spent by the end of the year.
- Consider getting other types of protective insurance. During open enrollment, you may also be able to buy disability, short-term, or long-term insurance, often at a group discount. Though many employers provide limited disability insurance, see if you need to buy extra to fill the gaps in the plan.
- Pick a plan. After weighing your options, the final step is to commit to a plan before open enrollment ends. If you end up not being 100% happy with the plan, remember that you can change it - during the next open enrollment.
Learn more about employee benefits and insurance plans at Lincoln Financial Group's website.
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