Everything You Need to Know About Open Enrollment
Whether you’re new to the workforce or are a seasoned pro, registering for an employer-sponsored health plan can seem like a necessary evil. Suddenly you have to attend an open enrollment meeting, sit through a presentation, and make an important decision that will impact the rest of your year. It’s even more difficult when you’re not totally sure what you’re signing up for in the first place.
In this guide, we’ll go over what open enrollment is, what you can expect during this period as an employee, and what to consider when enrolling in a health plan so that you can make the best decision for you and your family.
What is Open Enrollment?
Open enrollment is the time period when employees can sign up for their employer-sponsored health plan, renew their health plan, or drop their current health plan. It typically lasts 2-4 weeks and takes place a few months before the plan’s effective start date. For many this is January 1st of the coming year. If that’s the case for you, you can expect to see open enrollment take place around October through November. Once open enrollment ends, you won’t be able to make changes to your health plan unless you have a qualifying life event.
Qualifying Life Event
A qualifying life event can include a job change, marriage, adoption of a child, etc. The qualified life event triggers a Special Enrollment Period where you can make changes to your health plan outside of the designated open enrollment time frame.
What to Expect
Open enrollment will look different depending on your employer and the health plan options available to you. Generally, during open enrollment you will have the option to enroll in a new plan, update your coverage levels, adjust contributions to your HSA or FSA (if applicable), add beneficiaries, and learn about various health programs available to you.
During open enrollment you can expect to get some sort of communication and education on your benefit options. Some employers may send out emails or physical mail with instructions on where to view your benefits and make your elections.
Often the HR team will host an educational presentation at different points throughout the open enrollment time period. At these meetings they will go over any changes to current benefits that could impact your coverage and any new health plan offerings. Some employers record these presentations so if you can’t make it in-person, you won’t miss any important information.
You will typically get communication from HR that lets you know that you have a certain window of time to view your plan options and make a decision. If you do not make a decision within the OE timeframe and you do not have a qualifying life event, you won’t have coverage for the coming year. But don’t worry, you will typically receive plenty of email reminders leading up to the cut-off date to ensure you complete the necessary steps.
Keep in mind, with some plans, if you are on your spouse’s insurance and don’t need secondary insurance, you will still need to make that known by declining your employer’s coverage.
Terms You Should Know
Healthcare is one of the most confusing industries in the U.S and only 9% of people actually understand basic healthcare terms. So, if you’re feeling a little lost, you’re not alone. Here’s a list of some key terms to familiarize yourself with before open enrollment begins.
Coinsurance
Coinsurance is the percentage that you owe for covered healthcare services, like a doctor’s visit or hospital stay.
Co-Payment
A co-payment, or co-pay, is a set dollar amount that you pay for a covered medical service like a doctor’s visit.
Deductible
A deductible is a set amount of money you pay for covered healthcare services before your health plan kicks in. Some health plans are moving away from deductibles in favor of a more straightforward payment process.
Effective Date
The date when your health plan starts and your benefits kick in.
Explanation of Benefits
An Explanation of Benefits (EOB) is a statement you get after going to the doctor or hospital that lists the services you received. EOBs list the amount the doctor charged, how much your insurance covered, and the remaining amount you will be billed. The actual bill will be sent separately. Because EOBs are not actual bills and are often confusing to sort through, some health plans are stepping away from them and are sending out one monthly statement instead.
FSA/HSA
FSA stands for Flexible Spending account and HSA stands for Health Savings account. Both are special accounts that let you set aside tax-free money to pay for qualified healthcare expenses. The difference between the two is that with an FSA you generally have to use the funds within your plan year whereas the HSA funds will carry over year after year and they are yours to keep if you switch plans or change jobs.
HDHP
An HDHP is a High Deductible Health Plan which typically has lower monthly premiums but a higher out-of-pocket cost. Once you’ve reached your deductible (by paying a certain amount of cost out-of-pocket) your plan starts paying for your care. You can open an HSA and use tax-free dollars to help pay for out-of-pocket medical expenses.
HMO
An HMO or Health Maintenance Organization is a type of health plan that gives you access to a network of providers in your area. You will need to choose a primary care physician from your health plan network who will be your main provider. For specialty care, your primary care physician can typically give you a referral for an in-network specialist.
In-Network vs Out-of-Network
A network is made up of the facilities, providers, and suppliers that have contracted with your health insurance to provide you with healthcare services. In-network services are covered under your insurance meaning you are only responsible for a portion of the amount. Out-of-network services are not covered by your insurance so the total cost for those services is your responsibility. It’s a good idea to stay in-network as that will save you money.
Out-of-pocket Cost
Out-of-pocket costs are expenses for medical care that are not reimbursed by your health insurance. Deductibles, coinsurance, and co-pays for covered services are considered out-of-pocket costs. Anything that is not in-network is also an out-of-pocket cost.
Out-of-pocket Maximum
Some health plans have an out-of-pocket maximum which is the most you will have to pay for covered (in-network) services in your plan year. Once you reach your out-of-pocket maximum (through deductibles, co-pays, and coinsurance), your health plan will pay 100% of the costs of covered benefits.
PPO
PPO or Preferred Provider Organization is a type of health plan that covers medical services from almost any provider, though you’ll most likely pay less when seeing a provider who is in-network.
Things to Consider
During open enrollment you’ll receive a lot of information on different benefit options that may feel overwhelming. Before electing the benefits, you’ll have for the coming year, there are a few things worth considering.
Current Benefits
Assess how you used your current plan. Did you like the in-network providers you had access to? How often did you use your benefits? Are there any aspects of your plan that you wish were different?
Age
Your age can be a big determining factor when considering your health plan options. Younger people generally go to the doctor less frequently. This can impact how much you’re willing to spend each month and will help you narrow in on the right health plan for you.
Health status
Your health status can determine how often you will seek medical services throughout the year. If you have a preexisting condition and you know that you will likely see the doctor frequently, that could impact which plan you choose.
Major Life Changes
Are you getting married, having a child, or moving? Major life changes can impact your healthcare needs and are worth accounting for during open enrollment.
Who will be using this plan?
Will your health plan only cover you, or will it also cover a spouse or children? Plans may vary in cost depending on the amount of people that will be covered.
Cost
Compare health plans to weigh your cost options and think about how you plan on paying for your plan. Do you already have an HSA or FSA? Are you happy with how you’ve been paying for your current health plan? Has the cost gone up on your current health plan? Be sure to evaluate any changes to your current plan before making a decision.
A New Path Forward
If a traditional health plan with complicated paperwork and endless EOBs isn’t for you, there are other options. Coupe is a health plan that simplifies how you search for providers and how you pay for care. The Coupe plan does not have EOBs, deductibles, or coinsurance. Instead of paying your provider Coupe pays the provider for you and sends you one statement at the end of the month. That statement shows the exact cost you owe for medical services received the month prior. It’s like a credit card bill but better because you get the benefit of paying it off over time with 0% interest.
Coupe’s payment model is unique in that you get to search for a provider in your member portal and view the cost of a medical service before even scheduling the appointment. No more guesswork.
Coupe’s goal is to simplify your health plan experience and connect you with high-value providers so that you can focus on your health instead of the paperwork.