Open Enrollment: What Should You Be Thinking About?

October 6, 2014

If your employer offers benefits such as insurance coverage, a flexible savings account, or other employment benefits, you may be familiar with the annual open enrollment process.  Generally, employers schedule open enrollment either in the spring, with an effective date of July 1, or in the fall, with an effective date of January 1.   Since open enrollment is a very deadline-driven process, you’ll want to start thinking about your and your family’s needs for the next year well before the narrow window of open enrollment begins.

Consider your health care coverage options

If your employer is offering various health care coverage options, make sure to take some time and understand the differences in coverage and cost.  The monthly premium amounts are important, but you also want to carefully review each plan’s specific provisions in order to gain a complete understanding of your total potential costs.

Some key terminology and considerations:

  • Deductible: Review how much will you have to pay for services before coverage begins and what types of services accumulate toward the deductible. There is often an individual plan deductible and a family plan deductible.
  • Coinsurance: Coinsurance is the percentage of charges that you would pay for certain services.  The plan would pay the remaining percentage of the charges. Carefully review the co-insurance charges applicable to various services and pay particular attention to in-network vs. out-of-network charges.  The difference is often significant.
  • Out-of-pocket maximum: The out-of-pocket maximum is the maximum amount that you could pay on an annual basis under the plan that you choose.  There is an individual out-of-pocket maximum and a family out-of pocket maximum.
  • Stay in-network: Evaluate the network options available to you under each plan option. You may have options to choose a narrow network plan that often comes with a lower premium.  Plans often will provide online tools that allow you to quickly and easily determine whether a particular physician or medical facility is included in the network.  Before you select a health care plan, you want to make sure that if you have a preferred provider, that provider is in the network (i.e. an in-network provider).  Otherwise, if you visit a provider who is not “in-network,” you will likely incur significant charges or, depending on the plan, your visit may not be covered at all.
  • Prescription drugs: Don’t forget to review prescription benefits that may be available under each plan option. Particularly, if you are taking certain medications and you are switching plans, make sure to check whether your medications will be covered by the new plan and whether your prescription costs are expected to change.

Consider other available benefits

Your employer may offer a range of other benefits available for voluntary enrollment.  These may include stand-alone dental and vision plans, flexible spending accounts (FSAs), health savings accounts (HSAs), and voluntary insurance programs such as accidental death & dismemberment (AD&D) insurance, disability insurance or life insurance.

If you enroll in an HDHP medical plan, you may want to enroll in an HSA in order to obtain tax benefits.  You can contribute funds into the HSA on a pre-tax basis and use those funds for qualified medical expenses, such as, for example, prescription medications or office copays. Pre-tax dollars can also be contributed into an FSA account and used to pay qualified medical expenses.  Click on the links here to read more about FSAs and HSAs.  Remember that you may not use an HSA and an FSA concurrently, other than in limited circumstances (such as an HSA alongside a limited purpose FSA).

When planning to enroll in an FSA, carefully consider the potential medical expenses that you may incur in the next year and budget accordingly.  If you set aside too much money to go into the FSA, you may risk losing some unused funds at the end of the year, even if your employer offers a grace or a rollover period.

Your employer may offer the opportunity to enroll in group term life insurance as part of the benefits package.  As part of a covered group of lives, you most likely can enroll without a medical exam unless the policy limit is above a certain threshold.  To learn more about group term life insurance, click here.

Plan for life events

Open enrollment may the only time during the year when you will be able to elect or change benefits.  Otherwise, the only other times when enrollments and changes may be permitted are specific life events that provide eligibility.  These include marriage, birth or adoption of dependents, divorce, or loss of other coverage.

Open enrollment is a great time to review any benefit options that are made available to you and determine what will work best for your and your family’s needs.

This post was written by Julie Borisov from Colorado PERA. Would you like to write a guest post for The Dime? Email us at dimecontact@copera.org.