Your employer or health insurance plan's open enrollment period is upon you, and you're not sure where to begin. Let's walk through five tips to make sure you get the right health insurance plan for you.
Back in the day, you could choose a health insurance plan and you likely re-upped each year. However, as employers look for ways to maximize benefits, many businesses regularly change health insurance companies. This means you have to do your homework all over again. That might seem like a pain, but it's not a bad thing to review each health insurance option.
In fact, it's always a good idea to review your options annually. It's especially important when you get married, have children, make more money, or start using more healthcare services.
Here are five tips on how to get the best health insurance plan for you:
1. When's open enrollment? Meet the deadline
Most Americans get their health insurance through their employer. There is no standard open enrollment period for employer plans. Instead, the business decides on the open enrollment period. Check with your benefits department to find out your open enrollment period.
Employer-based insurance remains how most Americans get their health insurance, but there are other ways to get insured. One way is to buy an individual or family plan via the Affordable Care Act (ACA) exchanges. You can also buy health insurance on the individual insurance market.
Individual plans no longer allow insurers to decline coverage for people with pre-existing conditions or jack up rates because of ailments and illnesses. So, you no longer have to worry about your health status limiting your choices in the individual market.
Open enrollment for the ACA exchanges is from Nov. 1-Dec. 15 for most (but not all) states. A good place to start is at the federal government's healthcare site.
While the federal government’s rule gives people shopping for 2019 coverage on the federal exchange 45 days to sign up, some states that operate their own exchanges are extending the time that people have to buy health insurance for themselves. Here's the dates by state:
|Open enrollment for the exchanges|
|Federal exchanges||Nov. 1-Dec. 15, 2018|
|States with their own exchanges|
|California||Oct. 15, 2018-Jan. 15, 2019|
|Colorado||Nov. 1, 2018-Jan. 15, 2019|
|Connecticut||Nov. 1-Dec. 15, 2018|
|District of Columbia||Nov. 1, 2018-Jan. 31, 2019|
|Idaho||Nov. 1-Dec. 15, 2018|
|Maryland||Nov. 1-Dec. 15, 2018|
|Massachusetts||Nov. 1, 2018-Jan. 23, 2019|
|Minnesota||Nov. 1, 2018-Jan. 13, 2019|
|New York||Nov. 1, 2018 to Jan. 31, 2019|
|Rhode Island||Nov. 1-Dec. 31, 2018|
|Vermont||Nov. 1-Dec. 15, 2018|
|Washington||Nov. 1-Dec. 15, 2018|
Two other common ways Americans get insurance is through Medicare and Medicaid. There is no open enrollment period for Medicaid or the Children's Health Insurance Program, so you can request coverage at any time of the year.
Medicare's open enrollment period is Oct. 15 to Dec. 7. During Medicare open enrollment, you can maintain the same coverage, change Medicare Advantage or Part D prescription drug plans, switch Medicare Advantage plans, or even change from Medicare to a Medicare Advantage plan.
2. Know details about the three most popular types of plans
We went over the ways you can get health insurance. Now, let's talk about the types of plans.
The most common health plan is called a preferred-provider organization (PPO) plan. A PPO's premiums are usually much more than other plans, but it also gives you more flexibility.
PPOs allow you to see any doctor and specialist in your plan network. You can also go out of network for care, though that will likely cost you more.
What people love about PPOs is you don't need a referral from their primary care physicians (PCPs) to see a specialist. That opens up the healthcare system more than other plans. However, it comes with a cost. Premiums for a PPO plan are often double that of other plans, such as health maintenance organization (HMO) plans.
HMOs have lower premiums than PPOs, but they also require you to stay in network, and you must get referrals from your PCP to see specialists. The idea is that the PCP "coordinates" your care.
Another lower cost option to PPOs is high-deductible health plans (HDHPs). Employers have increasingly turned to HDHPs to contain healthcare costs over the past decade. About one-third of employer-based health plans are HDHPs. Nearly all employer-sponsored health plans (85 percent) have a deductible.
What sets HDHPs apart from other plans is their low premiums and high deductibles. This means you won't have to pay as much each month on premiums, but will need to pay more of the healthcare costs when you need services.
The IRS defines an HDHP as a plan with a deductible of at least $1,360 for an individual and $2,700 for a family plan. The average HDHP deductible for a single plan is more than $2,300, and one-fifth of HDHP plan members have plans with a deductible that's more than $3,000, according to the Kaiser Family Foundation.
To put that into perspective, the average HMO ($870) and PPO ($1,598) deductible are well below the average HDHP deductible in 2018. So, you'll need to keep that in mind if you decide to get an HDHP. Plus, people who work for smaller companies often have to pay more for their healthcare and face larger deductibles, so keep that in mind when you're comparing plans. For instance, the average deductible for a small company's high-deductible health plan is nearly $3,000 compared to $2,105 for large companies.
To help you pay for the bigger deductible, employers usually pair an HDHP with a health savings account (HSA), which allows you to save for healthcare costs. We'll get more into HSAs later.
Those are the three biggest types of health plans, but there are others that aren't as common. Find out more about PPOs, HMOs, HDHPs, and other plans in our "Guide to Health Plans."
3. Crunch the numbers: Compare premiums and costs
When deciding on a plan, compare each plan's premiums and out-of-pocket costs. The costs can include:
- Copays for doctor visits, urgent care, emergency room visits, and prescription drugs
You might find one plan offers low premiums, but when you dig into it further, you'll likely discover you have to pay more when you actually use healthcare services. This is the case for HDHPs.
It's a good idea to think about how often you go to the doctor, which drugs you take, and what services you and your family might need over the next year, and then compare the costs of each plan.
Some good questions to ask yourself when deciding on a plan:
- Do you have a chronic illness, which requires regular doctor visits?
- Do you take expensive prescription drugs?
- Do you have a family or do you plan on starting one over the next year?
- Are lower premiums or lower out-of-pocket costs more important to you?
- Can you afford hefty out-of-pocket costs if there's an emergency?
Health insurers and benefits administrators usually provide that information during open enrollment so you can compare plans easily.
4. Compare benefits, plans, and provider networks
Not too long ago health insurance plans varied much more than now. You were able to get barebones plans that might only cover you if you have a medical emergency. Those plans didn't cover preventive services and might not even care what you'd consider basic care.
The ACA changed that, and now health insurance plans must cover essential health benefits, including emergency care, outpatient care, hospitalization, pregnancy and newborn care, mental health and substance abuse services, prescription drugs, rehabilitation services, lab tests, preventive and wellness services, and dental and vision care for children.
Having these services guaranteed means the plans now offer more protection, but that also comes with a higher price tag. This is another reason why it's important to compare plans to make sure you're getting the best plan for you.
There are still many differences between health insurance options, such as:
- Plan design
- Premium costs
- Out-of-pocket costs, including copayments and coinsurance for doctor visits, urgent care, emergency room visits, and prescription drugs
- Provider networks
Something critical to check before choosing a plan: make sure your healthcare providers take the insurance. Providers sometimes take one type of plan offered by an insurer, but not another one. For instance, you may find a PPO plan may have a larger network of providers than an HMO.
Go to the insurance company's website and look for their provider networks. Insurers should tell you which providers are in each plan's network. Better yet, call the provider's office and confirm the information.
Also, make sure to check your specialists and your spouse's and children's providers.
5. Know the difference between FSA, HRAs, HSAs
Many employers offer accounts that help you save for medical expenses. Three types of these accounts are:
- Flexible spending account (FSA): You decide how much pre-tax money to put in the employer-owned account through payroll deductions and then you can use that money to pay for out-of-pocket medical expenses. You lose any money if you change jobs or if you don't use it by the end of the year.
- Health savings account (HSA): Connected to an HDHP, an HSA lets you save money for medical expenses, including deductibles and copays. The account is yours, so you keep it when you change jobs. The money rolls over each year, so you don't have to worry about not spending it all each year. A bonus of HSAs is that some employers chip in money, too. Nearly one-quarter of companies that offer health insurance provide HSAs for employees. That includes more than half of large companies.
- Health reimbursement arrangement (HRA): An HRA is similar to an HSA except the employer owns the account, so you can't take it with you when you change jobs. You're able to contribute money for medical expenses just like the other two accounts. Money can be carried over to the next year like an HSA. Some employers donate money to HRAs, which helps you pay for medical expenses. The number of companies that offer HRAs are tiny compared to HSAs. Only 7% of businesses with health insurance offer HRAs in 2018.
Open enrollment is an important time of year. Health insurance is one of the most important purchases you make. You need to make sure you have the right health plan for you and your family. Review your employer's information and talk to your employer's human resources department and benefits administrator. By doing your homework, you'll find the plan that's right for you.