Open enrollment guidance
This isn’t the most wonderful time of year for employees, retirees, and people who must shop for a health insurance plan independently.
It’s open enrollment season, which means change and confusion.
For employer-provided benefits, open enrollment typically starts between October and November. For Medicare enrollees, it runs from Oct. 15 to Dec. 7, while those opting for a Marketplace health plan for 2024 have from Nov. 1 through Jan. 15 to sign up.
It’s easy to be paralyzed by the choices you have to make. Which health care plan is right? Do you go with the cheapest option? Should you buy life insurance through your employer? What is a flexible spending account?
No matter the source of your coverage — private employer, self-purchased, or Medicare — open enrollment is “your opportunity to really just check and make sure you’ve optimized your coverage,” said Louise Norris, health policy analyst for healthinsurance.org and medicareresources.org.
Norris said people’s biggest mistake is inertia, or sticking with what they have.
“If you do that, you are potentially leaving money on the table, potentially missing out on benefits that could really help you,” she said.
Here are some tips to help with your open enrollment choices:
Do a checkup on your coverage.
It’s important that you review all the documents you receive during open enrollment.
What you elected last year may not be best for you or your family in the coming year. There may have been changes in copay amounts or deductibles, for example. Nor can you assume that your medical providers are still in the network of your current health care plan.
Be sure to check your prescription drug plan to ensure your medications will still be covered. If a drug you take is no longer covered, you may want to switch plans.
Medicare Advantage and Medicare prescription drug plans typically change from one year to the next and may vary in ways that affect access to certain providers. A KFF analysis of the 2020 open enrollment period found that only 29 percent of Medicare beneficiaries compared their current plan with other Medicare plans offered in their area. Only 54 percent of Medicare Advantage enrollees reviewed their current plan’s coverage to check for potential changes.
I’ll cover more about Medicare and the pros and cons of Medicare Advantage specifically in an upcoming column.
Take advantage of online help.
Many companies have made it easier to compare plan choices.
Medicare has an online tool that makes it easier to comparison shop. Log into medicare.gov and select the link for “Find health & drug plans.” Consider out-of-pocket expenses.
At healthcare.gov you’ll be able to preview 2024 Marketplace health plans and get estimated prices ahead of the Nov. 1 start of open enrollment.
If you’re unsure or uncomfortable using the online tool to compare plans, work with a broker, Norris said. You can also get guidance from Medicare by calling 800-633-4227. TTY users can call 877-486-2048.
Take advantage of flexible spending accounts.
Don’t overlook contributing to a flexible spending account (FSA), a dependent-care flexible spending account or a health savings account (HSA). An HSA is linked to high-deductible health plans and, like FSAs, can also be used for out-of-pocket medical expenses.
When you set up one of these accounts, money deducted from your paycheck on a pretax basis can be used to pay for many outof-pocket health and dependent care expenses. The higher your tax bracket, the more you save.
You can set up an HSA on your own as long as you’re enrolled in an HSA-compliant high-deductible health plan, which you can purchase in the individual/family market, Norris said.
Eligible expenses for an FSA include co-payments, prescription drugs, and contact lenses.
Dependent-care funds could be used on day care, preschool, and summer day camp for children 12 and under. Adult day care costs for disabled or elderly dependents also are covered.
Here’s something you may not realize, Norris pointed out: Though FSA contributions are deducted throughout the year, your full annual commitment is available immediately, on the first day of the plan year.
Additionally, if you use the full amount you signed up for but quit your job or get fired before the end of the year, FSA funds do not have to be paid back. However, if you leave your job without using up whatever FSA funds you’ve contributed, you lose the money.
Conversely, HSA funds go with you if you leave your job, Norris said. There’s no “use it or lose it” rule for HSAs.
Review your insurance coverage.
Although your employer may offer life insurance, compare rates on the open market, recommends Carolyn McClanahan, a physician and certified financial planner who founded the fee-only Life Planning Partners, based in Jacksonville, Fla.
“If you’re healthy, it’s usually cheaper to buy your own individual insurance,” she said.
However, if you have preexisting health issues that may prevent you from getting affordable life insurance, look at your employer-provided options.
Also, keep in mind that if you leave your employment, you could lose your coverage. If you develop a health condition, you may not be able to get life insurance outside of employment.
“The one mistake people make is that they count on their workplace plan for their life insurance. It is best to have the coverage you need through individual inexpensive term insurance,” McClanahan said.
Think about getting disability insurance if it’s offered, because you’re more likely to become disabled than die young.
Don’t forget to update beneficiary information.
It’s so important that you don’t forget to check the beneficiary section, especially if you’ve gotten married.
I’ve seen cases where people got remarried and neglected to remove their ex-spouses as a beneficiary.
Don’t procrastinate.
If your company is having an informational session, sign up for it.
Don’t wait until the last day of open enrollment to try to figure out which benefit options are right for you.
If you’re covered by Medicare or a Marketplace plan, start reviewing your options now.
“No matter what type of coverage you have, you want to take advantage of your opportunity to renew or review your coverage,” Norris said. “You might end up keeping the same policy you have, but you don’t want to just blindly do that.”
I know open enrollment is a pain. But don’t allow your inertia to cost you more than you can afford.
Michelle Singletary can be reached at michelle.singletary@washpost.com.