Open enrollment is coming up — the time of the year when you have the option to sign up for health insurance or change your current plan. Often, what seems like a straightforward process can actually feel quite overwhelming. There’s a lot of information to take in. Choosing the right plan for you could potentially save you thousands of dollars over the course of a year.
Fortunately, by taking the time to do your research and asking the right questions, you can make an educated decision. We’ve pulled together the information you need to understand the process, choose the best options, and move forward with confidence. Here’s what you need to know.
What Is Open Enrollment?
Open enrollment gives you a chance to add benefits or switch plans, whether it’s due to personal preference or in response to changes in your life, like a new health condition. It usually happens once a year; however, some organizations may have a different open enrollment schedule, so check your employer’s policy.
Why do benefit plans change year-to-year?
Benefit plans can change for a variety of reasons, including:
- Insurance companies update their offerings to comply with local and federal laws and adjust pricing for inflation and risk.
- Employers reevaluate their insurance providers and plans to ensure they have the best options for their employees.
While open enrollment is your chance to select a health plan for the coming year, it’s also a time when many employers offer you the ability to enroll in other benefits too, including:
Generally, open enrollment is the only time you can make changes to your benefit selections.
Exception to the rule:
You can sign up for insurance or change your coverage when you have a qualifying life event.
A qualifying life even can include:
- new baby
- death of a spouse
- change in employment
What to Expect During Open Enrollment
Open enrollment is usually held in October or November for insurance plans that start Jan. 1. Some employers might hold it at different times of the year, so check with your employer about their specific policy.
The open enrollment period typically lasts two to three weeks. Many employers allow you to make changes up until the last day to enroll, so even after you make a selection, you can still go back and review your options to make sure you’re confident with your choice. Research your employer’s policy to know whether this applies to you.
While there’s a lot to think about during open enrollment, the process is fairly standard. Here are the steps you’ll follow:
- Prepare (more information about this below).
- Review the information your employer has provided.
- Decide whether you want to renew your current plan or select a new one.
- Make your selection and enroll in the plan of your choice.
- Confirm the start date of your new coverage.
How to Prepare for Open Enrollment
While the stack of paperwork may be daunting, it’s important to carefully read and understand all the information your employer provides. Take advantage of any additional resources offered, such as questionnaires that help you identify your priorities or cost comparison tools. Familiarize yourself with some of the common terminology used to talk about health benefits and any jargon you don’t understand, like co-insurance, deductible, and in-network versus out-of-network.
Never assume. There may have been changes to your current plan for the upcoming year. Don’t assume that if you just renew your plan that everything will remain the same.
Compare what’s available to you.
Compare the plans’ coverage and costs — not just the premium, but also deductibles, copays, and co-insurance. Typically, open enrollment sites offer side-by-side comparisons that take the guesswork out of the process for you.
What are your needs?
Think about how your needs might have changed in the last year, or how they may change in the year to come. If you’re in your 20s, for example, and you’ve been covered under your parents’ insurance, you’ll need to get your own coverage after you turn 26.
Prepare for the unexpected.
Finally, anticipate what your out-of-pocket medical costs might be in the coming year. While nobody can predict emergencies like a car accident or an unexpected health problem, if you’re generally in good health and rarely go to the doctor, you may save money on a plan with a high deductible. These plans have a lower premium but require the employee to pay more money out-of-pocket before insurance coverage kicks in.
Prepare for the expected.
On the other hand, if you know you’re in need of a joint replacement, or you’re planning on having a baby, a traditional plan — one that has higher premiums but starts covering your healthcare costs right away or after you pay a lower deductible —might better help you cover your medical bills.
Questions to Ask
Once you’ve prepared, read through all the materials your employer has provided to you, and considered what you and your family might need from your benefits in the coming year, it’s time to dig into the finer details. Here are some basic questions to get started.
Has there been a change in providers?
If your employer has switched insurance providers, your current doctor may no longer be considered in network. That means you’ll either have to switch to a new doctor or be hit with out-of-network charges. Review the plan’s list of participating health providers to determine if your doctor is included. Those lists are often found on the insurance company’s website.
What are the limits?
What are the deductibles, copays, and out-of-pocket limits? In order to compare the total anticipated costs with each plan, you need to understand when and how you’ll be charged during routine visits as well as emergency care.
Will my medication be covered?
Prescription drug costs can add up. If you take medication to manage a chronic condition, check the formulary (the list of the generic and brand-name drugs that are included in the plan). Make sure your medications are covered and find out what the copay will be.
Is there a spousal surcharge?
If you’re married, review your spouse’s insurance options and consider whether it makes sense to switch to their plan (or add them to yours). Some plans charge extra to add a spouse if they have the option of being covered by their own employer. If that’s the case, it might be best to stick with separate coverage.
Which benefits are paid for by my employer?
While many benefits are paid for through paycheck deferral, some may be fully covered by your employer, essentially making them free to you. Look for no-cost benefits your employer might be offering, like workplace wellness programs, and take advantage of those options, so you’re not leaving money on the table.
Prepare for the Upcoming Year
Whether you’ve had major life changes in the past year, or things are humming along like they always have, open enrollment is a good time to reevaluate your health insurance and make sure it’s still working for you. It’s also the perfect time to familiarize yourself with your benefits website, so you’ll know where to get the information you need and feel confident using the system.
Remember, you may only get the chance to change your insurance during open enrollment, so take the time to make an informed decision. By selecting a plan that’s right for you and your family, you’ll not only get the healthcare you need, but you’ll also save money in the long run.
Do you find open enrollment overwhelming? Share your biggest questions and concerns in the comments below.
This informational material shall not be considered financial advice. The Hartford assumes no responsibility for any financial, investment, or tax-related decisions. Those seeking resolution of specific financial, legal, tax, or business issues, questions, or concerns regarding this topic should consult their own financial, investment, tax, legal, or other business consultants, advisors, or other professionals.