November 05, 2013

Open Enrollment

Credit: Ambro
Let’s be honest: open enrollment stinks. At best, your human resources department goes over your medical, dental, and vision insurance plan options with you at a staff meeting and offers to help you fill out the forms. At worst, your human resources department sends you a bunch of information and a bunch of forms and asks you to make a bunch of decisions by yesterday. Either way, it’s probably not anyone’s favorite time of the year. It’s certainly not mine!

This year is particularly vile. With all of the changes going on in the realm of health care, there are a lot of new rules and revised wording in plan options, and most of the information I’ve had the joy of reading for friends, family, and clients seems to be a grotesque concoction of insurance jargon written by a group of long-winded lawyers. Fret no more, though. I’ve got 10 tips to help you get through your next open enrollment period:
  1. Read it - all of it. It’s probably a daunting amount of confusing material, but we’re talking about your medical insurance benefits, and possibly your spouse’s and children’s medical benefits. You are about to make irrevocable decisions (at least until your next open enrollment or qualifying life-changing event) that could have real consequences (both medical and financial) to your overall well-being. Make sure you’re giving your elections the time and due diligence they deserve.
  2. When in doubt, ask. If you don’t have any questions after reading through your materials, you should probably read them again! No question is too small, and you don’t want to find yourself wishing you had asked your “little” question back during open enrollment while you’re at the check-in counter in the ER!
  3. What’s changing? This is probably the easiest and best question you can ask your human resources department (or your insurance provider if your company is keeping the same provider it had last year). If you are a really organized person and can get your hands on last year’s plan, lay this year’s plan next to it, side by side, and go at it. Highlight the differences so you can know the new rules of the game and be ready to go with a different plan option if needed.
  4. What costs are increasing? Unless the benefits you are being offered are being reduced, there’s a pretty good chance your health insurance expenses are going up. We can argue about whether the government, the insurance companies, the hospitals, or the doctors are behind this, but at the end of the day, what matters is that your costs are still probably going up. It’s important to know what specific areas of your plan are becoming more expensive. Are your premiums (the amounts you pay for insurance coverages) going up? Are your deductibles (limits you have to hit before the insurance company starts substantially paying for health care costs) going up? Are your co-pays (fixed charges for visiting a doctor) going up? These increases should be considered when determining which plan option is best for you and your family.
  5. In-network or out-of-network? An in-network doctor is one who your health insurance provider is contracted to work with, and an out-of–network doctor is one who your health insurance provider is not contracted to work with. Typically in-network doctor visits will cost you less because your health insurance provider has already negotiated set prices with the doctor for his or her services. If you love your doctor and are not cost sensitive, this may not mean much to you, but if you’re neutral towards your doctor, I’d suggest you make sure he or she is in-network, and if not, find a doctor who is. This is particularly worth looking into if your company is changing providers or you are looking into an obstetrician.
  6. Consider dental insurance. If your company offers dental coverage, give it a look. I know it’s more coming out of your check, but you may find that for a relatively minimal cost you can have a lot more coverage and flexibility should that dreaded toothache strike. If you go to your dentist regularly, and you should, it’s possible your savings on basic preventative care could be almost equal to the cost of your insurance.
  7. Consider vision insurance. I’ll just be frank and tell you that, in general, I rank basic health insurance needs in order of importance: medical, dental, and then vision. In a lot of cases, if something serious happens to your eyes, it’s possible your medical insurance will be there for you. That being said, vision insurance can also add a lot more coverage and flexibility to your insurance arsenal should something happen to your baby blues. Particularly in years where you know your prescription has changed, you need new glasses, or you need new contacts, your savings on those appointments, products, and services could almost equal the cost of your insurance. I’d give it a look (pun intended).
  8. Make sure everyone is covered. This may seem obvious to some people, but trust me when I tell you this tip is embarrassing to some people. Please, please don’t leave off a spouse or a child who is eligible and needs insurance benefits. Even if your company and the insurance provider can fix your paperwork mistake, by the time you get through the process, you’ll wish you hadn’t forgotten anyone.
  9. Ask about wellness programs. This suggestion may be a tad early, but I am beginning to see, read, and hear about more and more programs companies and insurance providers are putting in place that offer rewards, incentives, and in some cases, reduced costs to employees who participate in wellness programs. These programs can be yoga classes, gym memberships, online classes about eating right, and lots of other things, but if you’re interested in getting healthier and potentially getting some perks for doing so, see if you can participate in a wellness program.
  10. What do you want your health insurance to do? I saved what I think is my most important tip for last. Many people I know go with whatever plan option has the lowest premium, and I’m not sure that’s the smartest move. In my book, health insurance is a last line of defense to protect you and your family’s assets should something really serious come about medically. Personally, I always look for the plan options that offer the highest coinsurance. Coinsurance is how medical expenses are shared between you and your insurance provider once the deductible is met. If there is an option that offers 100% coinsurance (or close to it), it will probably have a relatively high deductible and be one of the options that takes a bigger bite out of your paycheck, but it will likely offer more financial protection should a very expensive medical issue come up. If you don’t have the healthiest family history, you or your spouse are thinking about having a child, or your abdomen felt really bad the last time you had spicy food, I would certainly encourage you to consider this type of plan. Playing with your insurance election is not how you get a raise. Remember, if you have an adequate rainy day fund, you should be able to handle a higher deductible. If you follow this tip, you may curse me every two weeks, but I would wager there will eventually be a year where you will be glad you went with an option that offered more protection to your overall wealth. 
Today’s tips are pretty general, so please let me know if there’s something specific I can try to help you with. Just like you, I do hate reading the insurance lingo, but I love helping others.

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