For most workplaces, open enrollment in a medical plan runs between early November and late December. There is no required length of time for enrollment, though it typically lasts several weeks.
During this period, employees may choose to elect, change or remove benefits such as health, vision, dental and employer-sponsored insurance offerings. As a reminder, benefits may be paid for through employee salary deferment, by the employer or utilizing a section 125 cafeteria plan. When reviewing benefit offerings, employees should consider how the benefits are paid for and by whom.
Open enrollment can be overwhelming as employees face the pressure to pick the right plan for the coming year. Is it best to stick with current selections, or would a change in coverage better suit your family’s anticipated needs? It can be a hard question to answer, but there are some resources employees can use to make the decision a little easier.
Common open enrollment questions
Q: What healthcare costs I should consider?
A: When evaluating and comparing healthcare plans, you’ll want to review costs including:
- Premiums: The recurring monthly payments made to your healthcare provider for coverage.
- Deductible: The yearly amount individuals or families must spend before insurance begins to pay for costs.
- Copays: Flat fees you may be required to make when visiting a healthcare provider or filling a prescription.
- Coinsurance: The portion of healthcare costs you are responsible for paying after your deductible has been met.
Read more: Dive deeper into estimating your yearly costs and understand how categories are defined by “metals” for healthcare plans.
Q: What non-cost factors do I need to keep in mind when choosing a plan?
A: Beyond premiums and deductibles, personal factors will impact the suitability of your health plan. Ensure your current healthcare providers (primary care doctors and specialists) accept the new insurance plan. Not all medical offices accept all insurance providers; this is something to check before changing providers – not after.
If you take medication regularly, make sure your prescriptions are covered under the new plan. And if you’re anticipating a major medical event, such as having a baby or needing surgery in the coming months, research your coverage options.
Q: What’s the difference between PPO & HMO?
A: PPOs and HMOs are two of the most common health plan benefit designs. PPO stands for preferred provider organization and HMO refers to health maintenance organization. An HMO is a network of providers, and participants are required to use providers within the network. In return, their costs tend to be lower. A PPO offers more flexibility in who you may receive care from, but costs may be comparatively more expensive.
Read more: This WebMD guide offers an in-depth look at the difference between a PPO and HMO.
Q: What are HDHPs?
A: A high-deductible health plan, or HDHP, is a health plan that features higher deductibles than traditional insurance plans. The criteria for HDHPs are set by the IRS, and can change from year-to-year. The criteria consider a health plan’s yearly deductible and out-of-pocket expenses such as copays, deductibles and coinsurance.
Read more: Here’s a breakdown of the IRS’s 2022 definition of a high-deductible health plan.
Q: What’s the difference between an HSA, FSA and HRA?
A: An HSA, FSA and HRA are accounts used to cover eligible medical expenses. Here are the key differences:
- Health savings account (HSA): Only participants on a HDHP are eligible to use an HSA, but money in the account can roll over from year-to-year. The money in the account remains yours even if you leave your employer.
- Flexible spending account (FSA): This employer-owned account uses pre-tax dollars, typically deferred from your paycheck. Money in the account does not rollover and cannot be accessed once you’ve left an employer.
- Health reimbursement arrangement (HRA): An HRA is similar to an HSA, except it is employer-owned, meaning you cannot take the money with you if you leave your job.
Read more: Here is the IRS’s full breakdown of medical savings accounts and their contribution limits.
Q: Do I need to take action even if I’m not changing coverage?
A: Your employer may require you to act regarding your health insurance selections. You may need to confirm in writing whether you’re keeping your current selections, changing plans or declining coverage. Never assume you don’t need to act, as this could result in a loss of coverage.
Open enrollment for 2022
Unless you experience a qualifying life event in 2022, this is your only opportunity to change insurance coverage for the upcoming year. If you find your options confusing or overwhelming, reach out to your human resources department or insurance representative. Your financial professional can also help determine how your coverage options, and medical savings accounts can play a part in your greater financial well-being.
Rachel Hanley is audience engagement and marketing coordinator at Advisor Perspectives.
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