When your health insurance open enrollment period comes around, do you 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. One thing to keep in mind is the federal Affordable Care Act requires everyone to have qualifying health care insurance (with some exceptions) or make what’s called a “shared responsibility” payment at tax time.
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).
This is just a sample of the types of available plans. To choose the plan that’s right for you, you may want to consider which professionals and hospitals are included in the network (and where they are located); how much you pay for the plan (the premium); how much you would have to pay before you are covered (the deductible); out-of-pocket costs for service (the costs that aren’t covered by insurance); and even the level of service when it comes to filing claims and potential perks such as discounts to gyms or other health programs.
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. Learn more at healthcare.gov.
The open enrollment period for 2018 coverage through the Marketplace is from November 1 to December 15 for coverage that will begin January 1.
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). 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 saving for health expenses. 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.
Skipping it? There’s a penalty for that.
So what if you’re healthy and just decide to skip the whole health insurance quest? If you could afford coverage in 2017 and just didn’t bother, there’s that whole “shared responsibility” thing we mentioned above, which could require you to pay the federal government $695 per adult and $347 per child, up to a family maximum of $2,085.
Things to Consider:
- The plan you signed up for five years ago may not be the best fit today. Have you looked at all your 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.
- Unless you have a valid excuse (and there’s a list), not having health insurance could cost you.