Scarier than Halloween? Here’s how to navigate open enrollment
It’s that time of year again, when signs pop up in offices across the country, exclaiming “Open enrollment!” — as if making annual health insurance choices were just another fun fall activity, like eating pumpkin-flavored doughnuts or buying matching gloves and scarves.
But open enrollment is a serious, and expensive, matter. Employersponsored health insurance for a family now costs an average of $20,576 a year in monthly premiums — a record high, according to the Kaiser Family Foundation.
Workers pay about $6,015 of that and their employers foot the rest. That’s up about 5% from 2018, meaning the cost of health insurance is rising faster than workers’ wages, which increased about 3.4% from May 2018 to May 2019.
And that $20,576 doesn’t include copays, deductibles and other out-of-pocket costs that can send families reeling.
The Tribune spoke with several experts ahead of open enrollment season to get tips on how to save money when choosing employer-sponsored health insurance plans.
Compare costs, not just premiums
Don’t just look at the premiums — the amount you pay for a plan — when selecting coverage.
Consider the deductible, the amount that you have to pay before the plan will start chipping in for medical services. Look at the out-ofpocket maximum, which is the upper limit on what a plan will ask you to pay in a year. The maximum doesn’t include what you’re paying in premiums.
Now, do some math. Multiply the monthly premium by 12 and then add it to the deductible to see, roughly, what a plan may cost over the course of a year if you have a significant amount of medical expenses. If you expect a very large sum, add the premiums to the out-ofpocket maximum to see your potential total costs.
If you don’t anticipate many expenses, you might not have to pay much of that deductible. Your costs might be limited to the premiums. But there’s no guarantee. High-deductible plans may be tempting to healthy workers because they often have lower premiums — but proceed with caution, experts say.
“If you do fall and break something, or find a lump in the shower, or feel chest pains, all of a sudden your health needs are very different than in the past,” said Karen Pollitz, a senior fellow at the Kaiser Family Foundation.
About 28% of workers were enrolled in plans with deductibles of $2,000 or more for an individual worker in 2019, according to Kaiser.
For 2020, the IRS defines a high-deductible plan as one with a deductible of at least $1,400 for an individual or $2,800 for a family. If you’re considering a plan with low monthly premiums, make sure your doctors and medications are included in that plan — or the costs could be substantially higher.
“It could be that the cheaper plan is an HMO that doesn’t happen to cover the psychiatrist you go to,” Pollitz said. “That might save you a lot in premiums, but what if you had to pay 100% out-of-pocket for your therapy?”
Look into health savings account
High-deductible plans often come with the option of using a health savings account, which allows employees to set aside a portion of their paycheck, pre-tax, to help pay for medical expenses. Any unused funds roll over to the next year.
But the tax savings isn’t the only benefit. Many companies that offer HSAs contribute funds to them. On average, companies contributed $572 to individuals’ HSAs and $1,062 to families’ HSAs last year, according to Kaiser. That can go a long way toward helping a worker pay down a high deductible, should that worker get sick or injured.
High-deductible plans can help employers save cash because they have lower premiums, which is why many try to give their workers an incentive to choose them, said Chad Schneider, senior director of channel sales at Chicagobased Jellyvision, which sells software to help employers communicate with workers about their benefits.
“They can take some of the premium savings and say, ‘OK, employee, if you go this route, we’ll put $250 into this HSA because you picked this plan,” Schneider said.
Often in households where both spouses work, the couple will be on the same plan. But at some companies, that can add unnecessary costs. About 10% of large companies that cover spouses who are eligible for health insurance through their own employers require those spouses to pay more for that coverage, according to Kaiser. Those “spousal surcharges” could include higher premiums or cost-sharing.
Investigate options early
Workers spend only about 18 minutes, on average, on open enrollment for health insurance, and 41% of workers wait until the last days to make their choices, according to PlanSource, which sells benefits administration technology.
It would be better to get an early start on the process, in case there are questions for human resources departments or health plan representatives, said Cheryl Larson, president and CEO of the Midwest Business Group on Health.
Experts have differing opinions about whether it’s worthwhile to switch plans each year. Researching options each year and potentially choosing a new plan could save a consumer money, some say. Others, however, say that if a plan is working for you it might be safer to stick with that plan than choose a new one just to save some cash.
Search savings after enrollment
Many companies offer ways for workers to save money on health care throughout the year. About 98% of large employers now offer telehealth to their employees, according to a 2019 National Business Group on Health survey.
Instead of heading to the doctor’s office or an urgent care facility, employees can get help from doctors over the phone or video. Often, such services are free or cost less than going to a doctor’s office or urgent care site.
Some employers and insurers encourage workers to go to “centers of excellence” for certain procedures. The centers are generally hospitals offering high-quality care in certain specialties.
Employers and insurers can get price breaks from those hospitals and employees who use the centers for certain procedures might have many out-of-pocket costs reduced or waived, Larson said.
Also, workers should look to employee assistance programs to help with personal, emotional or mental health issues. Some of those therapy services may be available for free, Schneider said.