Open enrollment for Medicare starts October 1 and ends December 7 and can vary among other commercial plans. During open enrollment, you can shop for health insurance and enroll in a health care plan that meets your needs. With hospital stays averaging around $35,000, getting the coverage you need during open enrollment is a smart move to protect your physical and financial well-being. Here are 10 essential facts you need to know about open enrollment so that you can make the most of your health insurance options.
1. You Can Decline Employer Health Plans
If you already have health insurance that is paid for by an employer, it is time to review that plan. You should decide now if you will decline your employer’s health coverage and purchase your own through open enrollment. You may hear a lot about federal subsidies when purchasing through open enrollment, but they often don’t apply if your employer offers you certain minimum coverage plans and you decline. In other words, you are free to decline an employer-sponsored health plan, but doing so may make you ineligible for federal subsidies on open enrollment plans.
2. CHDPs Usually Offer Less Than Employer-Funded Plans
CDHP stands for consumer-driven health plan and refers to the types of plans you can purchase through the healthcare marketplace. These plans usually have lower premiums, but higher deductibles than plans offered through employers. This may or may not be a good deal for you depending on whether your employer will couple a CDHP with an employer-funded health reimbursement arrangement (HRA). HRAs are like savings accounts, but you have to spend the money on health care. Look into the benefits of your employer’s HRA before deciding on a CDHP.
3. You Need to Do the Math
If your employer offers a health plan, then comparing it to a CDHP can be difficult. You need to redefine your employer’s plan in marketplace terms in order to be able to compare it to a CDHP. You may be able to get help from actuaries at your company when doing this. Your company may even have the math worked out for you already.
4. You Need to Reassess Your Health Care Needs
Before you even think about health insurance, you need to determine what level of care you and your dependents require. This can make it easier to rule certain plans in or out and can help you come up with acceptable price guidelines for the kind of coverage you need. Consider what you spent out of pocket on health care in the last year, the number of doctor visits you made, what you pay for prescription medications, and what you think your health needs will be over the coming year.
5. There Are Penalties for Not Having Health Insurance
You can’t afford to not have health insurance, not so much because it is a danger to your well-being (it is), but because the government will penalize you if you don’t buy a plan. The penalty is either $695 or 2.5% of your modified adjusted gross income.
6. There Are Two Types of Subsidy
The most common subsidy offered on CDHPs is the Advanced Premium Tax Credit (APTC), which is designed to lower the cost of premiums. Another, less understood subsidy is called Cost Sharing Reduction (CSR). CSRs are designed to lower the cost of copays, coinsurance, and deductibles for people who make between 100% and 250% of federal poverty income. To get the CSR, however, you must buy a silver tier plan. By qualifying for the CSR (which automatically means you qualify for the APTC), you may be able to afford a better health plan.
7. Plans Vary by State
Even though the Affordable Care Act is federal legislation, it allows states to set standards for health plans. While most states choose to go with the federal standards, not all do. Be careful when comparing plan benefits if your state has different standards than most others.
8. Wellness Programs Can Be Valuable
Most employers offer wellness-promoting programs to their employees. These can range from biometric screenings to access to innovative software that can help with weight loss or smoking cessation. These wellness offerings may make a big difference in your long-term health, so don’t discount them.
9. Supplemental Benefits Are Worth the Cost
Many employer-sponsored plans offer disability insurance that pays you money when you can’t work due to injury. These plans may also offer life insurance, retirement planning, and critical-illness coverage. These supplemental benefits may make slightly more expensive employer plans well worth the added cost.
10. If You Miss Open Enrollment, You Have to Wait a Year
If open enrollment is the option you choose, you need to be aware that the time frame for signing up for insurance is limited. If you delay and miss the open enrollment window, you will have to wait an entire year to get insurance. A lot can happen in a year and don’t forget that you will be forced to pay a penalty.