When your health insurance open enrollment period comes around, give it the thought it deserves. Times have changed, and choosing a health plan with the options that are right for you and your family can be complicated. Should you select a one-stop-shop HMO? A high-deductible plan with lower premiums? A spouse’s workplace plan rather than your own? There may be no single right answer, but having all the information can help you make an informed choice that’s right for your own situation.
Many people obtain insurance through a workplace plan offered by an employer. On average, a private employer will pay about two-thirds of the total premium. A workplace plan may also allow a spouse and children to enroll as well. For a working couple, it can make sense to compare the plans of both employers. And remember, plan options and costs can change year to year.
There are a variety of types of health insurance, including:
- HMO: A health maintenance organization (HMO) usually limits coverage to care from doctors who work for the HMO. These may offer lower premiums (the amount you and your employer pay for coverage), and you generally choose a primary care provider with the HMO when you sign up.
- EPO: An exclusive provider organization (EPO) may also offer lower premiums, but you must use the providers in the network, with much higher expenses if you go outside the network.
- PPO: A preferred provider organization (PPO) contracts with hospitals and doctors in a network and may charge you less if you stick to the network (but gives you the option to go outside of the network and potentially pay more).
Open enrollment (the window when you can enroll or change your plan) can vary by employer, but the period is frequently in the fall. Your benefits administrator will have that information.
The Marketplace (aka the “exchange”)
Those not covered by an employer plan may seek insurance on the Health Insurance Marketplace (sometimes called the “exchange”), created by the federal government’s Affordable Care Act. The Marketplace offers a variety of plans, including types mentioned above.
The open enrollment period for 2020 coverage through the Marketplace is from November 1 to December 15 for coverage that will begin January 1.2
Health insurance is also available on the individual market outside the government marketplace. Healthcare.gov provides a link to available providers and a tool for comparing plans online at finder.healthcare.gov.
Saving for out-of-pocket expenses
Different types of plans and employers may offer additional insurance saving options. Qualifying plans with higher deductibles may allow you to open a tax-advantaged savings account for health care, called a health savings account (HSA).3 The money you put into an HSA is yours to keep, even if you don’t use it in the current year.
If you’re interested in an HSA, check to see if you are part of an eligible insurance plan. Those covered at work may find their employer has added an eligible plan for the coming year.
An employer may also allow you to establish a flexible spending account (FSA), another tax-advantaged way of preparing for health expenses.4 Funds in an FSA must be used for expenses you incur in the year you set aside the money. Any money that’s not used in the year it’s saved reverts to the employer.5
Medicare and its key parts
Most American workers contribute each pay period to Medicare , the federal medical insurance program for seniors. At age 65, you’re eligible for that coverage. The two main pillars of Medicare are Part A (which covers hospital charges) and Part B (which pays for medical care). Most people have already paid for Part A through a lifetime of payroll deductions, but there is a premium for Part B.
Those turning 65 can sign up during an initial seven-month enrollment period (from three months before turning 65 to three months after the month you turn 65). And each year there is an open enrollment period6 (October 15 to December 7) where those covered may consider additional coverage, such as prescription drug coverage.7
Things to Consider:
- The plan you signed up for five years ago may not be the best fit today. Have you reviewed all your available options?
- A health savings account (HSA) is something to learn about if your employer has switched to an eligible health plan or you’re responsible for your own coverage.
- Fall is the time when many people sort through health insurance options for the coming year.
1 "How to Choose a Health Plan," MedlinePlus, August 2018
2 "Dates and Deadlines for 2019 Health Insurance," HeathCare.gov, accessed July 2019
3 "Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans," IRS.gov, accessed July 2019
4 "Flexible Spending Account," HealthCare.gov, accessed July 2019
5 "IRS: Plan Now to Use Health Flexible Spending Arrangements in 2019," IRS.gov, November 2018
6 "Medicare Open Enrollment," CMS.gov, accessed July 2019
7 "Supplements & Other Insurance," Medicare.gov, accessed July 2019