It varies by employer, but healthcare “open enrollment” typically happens once per year. Your office manager or human resources representative drops an enormous stack of paperwork on your desk and announces that open enrollment season has arrived once again.
While no one likes poring through page after page of dry, administrative paperwork, it is to your advantage. After all, 45 million other Americans have no health coverage at all. Millions of others purchase their own health insurance, which typically costs substantially more than most of the group plans sponsored by employers.
So, view it as the perfect opportunity to review and evaluate your entire health care situation, weighing your coverage needs with the various options available during the open enrollment period. Employers often make changes to their health care offerings from year to year, so it’s a good idea to see what’s changed.
Of course, your health coverage needs should come first. But, according to the debt management professionals at Clearpoint Credit Counseling Solutions, it’s best to approach open enrollment season as an opportunity to balance your coverage needs with your household budget. You can get it all done in four easy steps:
1. Determine Your Needs
Health care insurance is a complex product, so we’ve compiled a list of many of the items that influence most people’s decision making when selecting a health care plan. Take a moment to review which items are most important to you (and your family, if you’re electing family coverage):
- Is your current physician in the plan? Many people prefer to keep a doctor they’ve come to know and trust over the years. It’s important for many people to consider their doctor’s participation in any new plan being considered.
- Are there doctors nearby? Many people prefer to minimize travel time when visiting health care providers. A doctor located close to your home or office may make life a little easier.
- What about the basics? You should compare policies between various plans for handling basic preventive care. In this category, you’ll find things like basic check-ups/well visits, vaccinations, flu shots, mammograms, and other similar services.
- Is it important to you to have access to specialists? Check the plan provisions for policies relating to seeing specialists. Some allow you to see specialists directly, others only with a referral.
- Are plan policies relating to chronic conditions important? Health care plans tend to differ in their coverage of certain chronic diseases such as asthma, heart disease, diabetes, etc. Make sure to review specifics if these are an issue.
- Similarly, does anyone covered under your plan have any pre-existing conditions? When you’re currently receiving treatment for a condition or other covered event, you should look into how your situation would be handled if you made changes.
- Along the lines of the above items, are you taking any regular medications? Prescription drug plans vary greatly from plan to plan. Be sure to review medications covered when selecting your plan.
- What about life changing events? If anyone covered under your plan intends to become pregnant, to retire, send a child off to college, or experience any other major life event that may have implications for health care coverage these items should be considered during open enrollment.
- What about physician access? Some plans vary as to the general accessibility of physicians (e.g., immediate appointments versus having to schedule far ahead of time). Still others offer 24/7 telephone access to medical professionals.
- Speaking of immediate access, how do the plans differ in their policies regarding emergency visits? And what about hospitalization costs?
- Who handles the claims? Plans vary as to who is responsible for the paperwork. Sometimes the doctor’s office handles everything. Other plans require that you submit your own claims for reimbursement.
You should also consider other types of related coverage typically offered during open enrollment. For example, anticipated vision, dental, and mental health needs should be considered. Also increasingly popular are alternative types of health care providers (e.g., acupuncturists, chiropractors, massage therapists, etc.) and other specialized services (e.g., fertility treatment, rehab stays, assistance with quitting smoking). Consider reviewing your plan’s offerings in these areas as well.
2. Understand Your Options
- Health Maintenance Organizations. Better known as HMOs, these common-types of plans offer a defined group of providers and offices to take care of nearly all of your health care needs, including most routine preventive care services. Generally, you’re asked to select a single doctor known as a primary care physician (PCP). When a specialist is called for, your PCP makes that decision and provides the necessary referral. In general, these are affordable plans, though it should be noted that the scope of included services might be considered as limited to some people. Also, you will have to cover the costs of using any providers outside of the network. HMOs also handle all of the claims, which many view as a benefit.
- Another type of plan is the Preferred Provider Organization, or PPO. These plans are a bit more versatile, as they allow the insured to seek care outside of the pre-defined network of doctors and hospitals. Most of the difference here is financial, as you’re obligated to pay more for seeing the health care professional of your choice (if he or she is outside of the network). From a budgeting standpoint, this flexible fee arrangement might make things somewhat difficult.
- Point-of-Service, or POS, plans offer the most freedom of those listed here. Under this scenario, which combines elements of both plans described above, you’re free to see whomever you choose, whenever you choose, and without a referral. What’s the price of such freedom? In general, POS plans charge higher monthly premiums and often require increased administration and paperwork for the insured. These are also sometimes known as Fee-for-Service plans.
You may be in a position to select from two or more of the above plans. We realize that it’s often difficult to project forward when it comes to health care. However, if you review the list of plan amenities outlined in Step 1 (above), you should at least be able to make an educated guess. From there, it’s a matter of comparing your projected costs for each plan option available to you.
Additionally, if you’re married to someone whose employer also offers health care, open enrollment may be a good time to consider options for going forward. The best deal may vary from couple to couple. Often the employers pay for the employee but require an additional payment for family coverage. So, if you’re married to someone with his or her own coverage, it’s common to keep it that way. However, since coverage options vary so much, and since employer-paid benefits vary considerably, it’s still worth taking a look at when given the opportunity. This may be especially true of you have children (under whose plan should the children be covered?).
3. Review Your Financial Situation
From a financial standpoint, many of the considerations have probably come up as you’ve read over the above information. For example:
- What are your monthly premiums right now?
- Aside from those premiums, how much did you pay for health-care services (including prescription medicines and deductibles) in the past year?
- Of those expenses, which do you expect to occur again during the next year?
- What about deductible options? Is there an opportunity to save money by switching to a plan with a higher deductible?
- Do you feel a need to upgrade your plan for more freedom or flexibility? If so, can you comfortably afford it?
- If your spouse or child is covered under your plan but could find coverage under your spouse’s plan, does it make financial sense to switch?
- If you do switch plans, are there limitations to the services offered that would require out-of-pocket payments?
- Based on all of the above, how would your bottom line be affected if you were to make a switch in health plans?
4. Elect the Option That’s Right for You
For many people, making the best selection requires looking at your household budget and striking the best balance between securing what you desire and what you can afford. It’s tough to look ahead, but it’s also important to realize that some people experience true financial hardship as a result of medical expenses. As such, open enrollment is your periodic opportunity to help ensure not only your physical health, but your financial health as well.