You are here this morning to talk about open enrollment season for health insurance. Why is this important?
Open enrollment is the annual period when you can enroll in or change your health insurance coverage for the upcoming year. Additionally, for those who receive other benefits through their employers—such as life and unemployment insurance, or child care assistance —this is often when you can make changes to these offerings as well. Barring some specific life events, you only have the option of adjusting your coverage once a year, so it is important to understand your options and needs ahead of time.
When is the open enrollment period this year? Is it the same for everyone?
It is not the same for everyone. For those getting health insurance coverage through the Affordable Care Act, or Obamacare, open enrollment runs from November 1, 2017 to December 15, 2017. Outside of this period, you are usually only able enroll in a health insurance plan if you qualify for a special enrollment period. You’re eligible if you have certain life events, like getting married, having or adopting a child, changing jobs or losing other health coverage.
For employer-provided health insurance and other benefits, the timing can vary. It is generally in the fall, between October 1 and December 31. If your company offers health insurance and other benefits but you do not know when your company’s open enrollment period is, contact your HR department.
What should we keep in mind when choosing our healthcare coverage?
First, understand your options. If you get health insurance through your job, speak with an HR representative about the plans available to you. If your job doesn’t provide a health insurance benefit, shop on your state’s Affordable Care Act marketplace or the federal marketplace to find the lowest premiums. You can do so by going to healthcare.gov.
Next, you want to consider the different kinds of plans available. You are likely to run in a bunch of acronyms, like HMO or PPO. The type you choose will help determine your out-of-pocket costs and which doctors you can see. Compare each plan’s summary of benefits to learn more. Your HR department or the online marketplace will usually provide a summary and show the cost of the plan near the its title.
Finally, weigh your cost options and your healthcare needs. Decide whether you want more health coverage and higher monthly premiums, or lower premiums and higher-out-of-pocket costs. When making this decision, consider the healthcare needs of you and your family. If you are single and in great health, maybe you do not want to pay high premiums. If you have a family, numerous prescriptions or past health issues, more coverage with higher monthly premiums might be a better option.
What other items should we think about during this period, beyond healthcare?
If you have the option of receiving life and unemployment insurance, i would recommend purchasing this coverage. It is usually inexpensive and it will protect you and your family from financial hardship. Remember, 1 in 4 Americans will be involved in an accident that prevents them from working for a period during their life. You want to make sure that if something happens to you, this is not financially catastrophic for you and your loved ones.
Second, the open enrollment period is a great time to review your retirement needs. Most employer-sponsored retirement plans allow you to make changes at any time, but this is a great time to consider this benefit as well. You want to make sure you’re contributing to your retirement plan, if you have one. And if your employer offers matching, be sure you’re getting all the free money on the table. It is also a good time to talk to your financial advisor about your portfolio mix and performance.
Last week, President Trump signed an executive order that, among other things, ends subsidies to health insurers that help low-income Americans pay out-of-pocket medical expenses. How will that affect health care options next year?
It is not likely to have an effect for 2018, due to the timing. The changes in regulation still take time to propose and go through a public comment period. The order also does not lift the requirement that most Americans have some form of health insurance for the year or face a tax penalty. In addition, numerous states have lined up to block the order in court.
However, in the longer term, this could mean that insurance companies can sell stripped back plans that provide less coverage, and it could mean more comprehensive plans could see their premiums rise. We will have to wait to see what the ripple effects are over time. At this point, it should have minimal impact on your 2018 coverage options or premiums
Mellody Hobson is President of Ariel Investments, a Chicago-based money management firm that serves individual investors and retirement plans through its no-load mutual funds and separate accounts. Additionally, she is a regular financial contributor and analyst for CBS News.
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