Last-Minute Open Enrollment Tips

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NEW YORK (MainStreet) — Open enrollment is the annual opportunity for employees to make changes to their employer-sponsored health insurance plans and other benefit programs. Unfortunately, when employees receive information concerning the enrollment period and its accompanying packet of plan options, they more often than not ignore the fine print.

“People get overwhelmed with the big packet,” says Wendy Nice Barnes, vice president of Human Resources and consumer health insurance expert at eHealthInsurance.com. “They think ‘I don’t really want to look at this’, but they should. This is not the year to go on autopilot.”

According to a survey of large companies conducted by the National Business Group on Health, 63% of employers plan to increase the percentage of health insurance premiums paid by employees in 2011. Additionally, 46% intend to increase out-of-pocket maximums and 44% will increase in-network deductibles.

Many employers are making these changes to their health care plans partially due to the poor economy, which affects profit margins and, thus, the funding available for benefits programs. However, Barnes says, the adjustments are also a byproduct of the Affordable Care Act of 2010 as employers are laying the groundwork to reduce their health care costs once all provisions of the law go into effect in 2014.

Regardless of the causation, the effects mean, at the very least, anyone covered through an employer-sponsored health care plan needs to check if the terms and conditions of their existing plan are changing. Unlike Medicare open enrollment, which is heavily regulated by the government, how an employer notifies its workers of changes depends on the company and, as such, it may fall to the employee to ask the important questions on what’s changing this year.

Those who find themselves faced with higher premiums and/or deductibles may want to make actual changes to what they originally signed up for. For example, upon review, an employee may discover that their employer’s family plan now costs less than their spouse’s and want to move the kids onto the cheaper one. Or, employees may discover the opposite and want to discontinue their current health care plan entirely. 

Additionally, Barnes says there are other legitimate reasons, un-related to the cost, which may require a change in plans. “It’s not just about what is available,” she advises. “It’s also about what your own needs are.”

As such, those who have become ill or have a family member who has become ill over the course of past year may want to switch to a plan that accounts for the increase in health care services. Other reasons to adjust your insurance plan include:

  • Your current doctor and/or hospital no longer participates in your existing plan.
  • You have moved and need to change physicians and/or hospitals.
  • You have a child under 26, who was not covered by your insurance last year, but is eligible for coverage now, under health care reform regulations.

Whatever you decide to do, you are going to have to act fast. Open enrollment traditionally occurs in either July of the prior year (which has already passed) or before January 1 of the year in question (which is all-to-rapidly approaching.) To help procrastinators figure out if they need to make adjustments to their benefit plans, Barnes offered the following suggestions:

Know the standard.
According to eHealthinsurance.com, the average prices for individual and family plans are $167 a month for one person, with a $2,632 deductible, and $392 a month for a family with a deductible of $3,531. If you are paying more than or close to that under your current plan, you may want to revisit your options. Employees need to check to see if their premiums are, indeed, increasing, but they also need to review out-of-pocket expenses and the terms of their prescription drug plans. According to Barnes, families may find that it is cheaper to “mix and match” which dependents go on which spouse’s plan. Or they can pursue other options.

“You don’t have to stay in any plan,” Barnes points out. “Maybe the individual market is better for you.”

Address layoff concerns.
According to Barnes, you may be able to choose a plan during this open enrollment period that would cost less if you were later required to pay the entire premium through COBRA, the government program that allows terminated employees to temporarily keep their employer-based coverage for a limited time after a layoff. Employees who feel they may lose their job in 2011 should switch to a plan that offers the lowest COBRA premium should the layoff actually occur.

Pursue a flexible spending account. FSAs allow employees to set aside a certain amount of pre-tax dollars to pay for out-of-pocket medical expenses not covered by insurance, such as co-pays, eye glasses or dental care so those who have to deal with higher deductible or increased co-pays may want to subsidize their costs by opening up one.

However, keep in mind, there are a few caveats that apply to FSAs. For starters, by law, employees must spend the money they set aside in a year and any unspent balances revert back to the employer. Additionally, under health care reform, employees can no longer use FSA money for non-prescription drugs, excluding insulin and they may not be able to put money toward any child in their family who is younger than 27 if they aren’t claimed as a dependent.

Consider a health savings account. Most employers offer a higher deductible option with a health savings account, a medical savings account set up by individuals and employers where the money contributed can go toward medical expenses. Depending upon your health care usage, this can be a good option for savings because money can be acquired pre-tax in your HSA to cover unexpected health expenses not covered by your health plan. Additionally, unlike FSAs, any unused savings can also roll over year to year through retirement.

Inquire about other special services.
While the cost of health care is on the rise, it still commonplace for employers to offers additional perks or special services that you may be unaware of. Barnes, for example, was happy to discover that a company she worked for paid for a “Young Moms” program, which taught expectant or prospective parents basic child care tips. Other employers, she says, offer to pay for gym memberships; it’s up to you to inquire about what’s included or offered in your benefits package.

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