Late fall is when US companies host open enrollment — an opportunity for you to consider the benefits offered by your employer and make any changes for the upcoming year.
There seem to be mountains of brochures and options to review. Where should you start? Here are five helpful tips for navigating open enrollment so you can determine the plan that best suits your needs.
There’s usually a lot of information to read over when considering different health care options. Your goal is to determine the plan that best addresses your medical needs at a reasonable cost.
To analyze the options you are being offered, look for any side-by-side comparisons your company offers that show the difference in deductibles, out of pocket expenses, co-pays and urgent care or emergency room visit fees, all in one view.
Each family’s situation is different, but here are a few things to keep in mind as you think about potential costs:
Your need for medical services (both expected or unexpected) in the next year. If you have kids, urgent care or ER visits can come up. If you plan on having a baby or have a pre-existing condition, more visits and services are usually necessary.
Compare your monthly health insurance contribution amount vs what you’ll expect to pay out of pocket before deductibles are met. This helps you assess the impact to your normal budget and spending habits.
Consider if you’ll need to see specialists outside of your network. A recent Kaiser Family Foundation survey showed that nearly 7 in 10 people with unaffordable out-of-network medical bills “did not know their health care provider was not in their plan’s network when they received care”. If you think you’ll need to go out of network a lot, you may want to look at PPOs vs HMOs.
Many people assume their employer’s life insurance package provides enough coverage for their family. But there are two things to consider. First, the coverage an employer offers often isn’t enough. Employers generally limit coverage to 1-2x your yearly salary, which may not be enough to cover a family’s needs in the long run, if something were to happen to you. (The general rule of thumb is to get coverage that is 5-10x your salary.) Second, life insurance through your employer ends immediately upon leaving your job. So having your own insurance, outside of the insurance provided by your employer, provides you with the security of extra coverage should you leave your job and lose access to that particular benefit. You can quickly and easily figure out how much you need with this handy coverage calculator.
HSAs (Health Spending Accounts) and FSAs (Flexible Spending Accounts) allow you to take money out of your paycheck and put it aside for specific health-related or dependent-care related costs. Doing this lets you use pre-tax dollars to pay for uncovered costs. You’re reducing your taxable income, but applying those funds to medical costs or child care costs you’ll have to pay anyway. Win-win. So if you expect to have a decent amount of medical or prescription costs, or childcare costs, HSAs and FSAs can make sense for your family. Make sure to check that the health care costs you are saving for are allowed under your HSA or FSA plan.