October 28, 2019
That’s right, Tom. As you know, the open enrollment period is the time of year when most people have a chance to change their health insurance coverage or sign up for new coverage for the upcoming year. But it is not just about healthcare. If you receive additional benefits from your employer – anything from life insurance to public transportation benefits – the open enrollment period is often when you can make changes to your selections as well. Finally, it is a great time to review your retirement contributions for the next year. Today, I want to get our listeners thinking ahead so they make the best choices for the coming year.
Put simply, it is one of those subjects that is extremely important to most people’s financial health and security. But just like many people dread asking for a raise, employees often experience anxiety about selecting their healthcare coverage and other benefits due to lack of information or simply because the subject of money adds extra stress. As a result, a large percentage of workers tend to retain their existing benefits, even when better choices exist. So that’s why I am here this morning, Tom. I want to provide our listeners with the tools they need to be more comfortable with their options and make informed decisions.
Open enrollment periods vary by employer, but they are almost always in the fall months between October and December. Some firms have very short enrollment windows, so I urge all of our listeners to double-check the dates. If your company offers health insurance and other benefits but you are not sure when the open enrollment period is, contact your employer’s human resources department.
If you get your coverage through healthcare.gov, the federal open enrollment period will run from Friday, November 1 to Sunday, December 15, 2019, this year. And while some states like California may extend the open enrollment for their healthcare marketplace, you want to try to get coverage during the federal period, because if you miss out, you may not be able to sign up for coverage until next year. Outside of these dates, you are only able to enroll in a health insurance plan if you experience major life events like changing jobs, having a child, losing previous health coverage or another event that qualifies you for a Special Enrollment Period.
The first thing you need to do is understand what options are available to you. If you plan on getting health insurance through an Affordable Care Act marketplace, go to healthcare.gov. You will be able to enter your information and see plans available to you and their respective costs. If your employer provides health insurance plans, you will want to speak with the human resources department at your job. They can provide you with information on what plans your company offers.
Once you know the options available to you, the next step is understanding the details, including the plan type. For example, you are likely to come across abbreviations like HMO or PPO. These stand for health maintenance organization and preferred provider organization, respectively. Generally speaking, the difference between HMO and PPO plans includes the size of the plan network, the ability to see specialists, plan costs, and coverage for out-of-network services. Reading each plan’s summary of benefits is very important because it will allow you to understand the options available to you beyond the monthly premium and deductible. Your HR department or the online marketplace will provide these.
Finally, get down to brass tacks and make your decision. Review your current plan's offerings and determine whether it meets your healthcare needs and your financial situation. You want to take into account you and your family’s healthcare requirements. For example, if you are single and in good health, you may not want a high premium plan that keeps your annual deductible low. Instead, consider a low premium, high deductible plan. If you have a family, numerous prescriptions or past health issues, more coverage, and a higher monthly premium may be a better option.
Many employers offer a number of other non-healthcare benefits from transit benefits to supplemental insurance to subsidized gym memberships. If it is available to you, I would strongly recommend purchasing life and unemployment insurance, especially if you have family members who are financially dependent on you. The statistics tell us that 1 in 4 people will be involved in an accident that prevents them from working for some period of time during their life. If it happens to you, having these insurance policies will protect your family’s finances.
You also want to evaluate your contributions to your flexible spending account (FSA) or health savings account (HSA) if you have them. Depending on your spending this year, you may want to change the amount of money you put into your account for 2020. For example, if you opted to contribute $1,000 into an HSA last year but have $750 leftover, you might reduce your contributions to $500 for next year.
Finally, talk to your HR department about other benefits available to you including transit subsidies, health and wellness benefits, and even tuition and student loan assistance. Oftentimes, employers add benefits but workers do not know about them, so it’s a good idea to check in to see what is available to you.
Open enrollment is a fantastic time to review your retirement preparations. Most employer-sponsored retirement plans allow you to make changes at any time, but it is always a good idea to check that your contributions, your plan choice, and your portfolio mix are aligned with your current goals. If your employer offers to match part of all of your contributions, take that free money! Finally, it is also a good time to talk to your financial advisor about your plan’s performance.
While the federal individual mandate requiring every American to have health insurance or face a tax penalty was repealed, I urge everyone to get health coverage. The risks of financial catastrophe are simply too great to go without insurance.
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