Why is open enrollment season for health insurance important?
Open enrollment is the annual period when you can enroll in or change your health insurance coverage for the upcoming year. Additionally, if you receive other benefits through your employers – life insurance, unemployment insurance – this is a great time to make any adjustments to these policies as well. Open enrollment is usually the only time you can makes changes, so it is important to understand your options and needs ahead of time.
When is open enrollment period this year?
For those getting health insurance coverage through the Affordable Care Act using healthcare.gov, open enrollment runs from November 1 to December 15. However, in some states like California you can sign up for Affordable Care Act plans later. Outside of these dates, you are only able enroll in a health insurance plan if you experience major life events like getting married, changing jobs, losing previous health coverage or circumstances that qualify you for a Special Enrollment Period.
For employer-provided health insurance and other benefits, the timing can vary by company. It is generally in the fall, between October 1 and December 31. If your job 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?
The most important thing is to understand your options. If you receive your health insurance through your job, you can go to your human resources department about what plans are offered. If your job doesn’t provide healthcare, go to the state or federal marketplaces for the Affordable Care Act to search plan options and costs. Again, the best place to go for this is healthcare.gov.
Next, review the plan type. You will likely run into the acronyms HMO or PPO. These stand for health maintenance organization and preferred provider organization, respectively. Generally speaking, the difference between HMO and PPO plans includes the size of the plan network, ability to see specialists, plan costs, and coverage for out-of-network services. Compare each plan’s summary of benefits to learn more. Your HR department or the online marketplace will provide these.
Finally, determine the best plan for your healthcare needs and your finances. When doing this you want to take into account you and your family’s healthcare requirements. If you are single and healthy, it may be best to go with a low premium, high deductible plan. If you have a family, numerous prescriptions or past health issues, more coverage and a higher monthly premium may be a better option.
What other benefits should we be thinking during open enrollment?
If you have the option of receiving life and unemployment insurance, I would recommend purchasing this coverage. As you have heard me say before, 1 in 4 people will be involved in an accident that prevents them from working for a period during their life. If something happens to you, life and unemployment insurance will protect your family from financial catastrophe.
Open enrollment is also a great time to review your retirement preparations. Most employer-sponsored retirement plans allow you to make changes at any time, but it is always a good idea to check that your contributions, your plan choice and your portfolio mix are aligned with your current goals. If your employer offers matching, be sure you’re getting all the free money on the table. Finally, it is also a good time to talk to your financial advisor about your plan’s performance.
The Trump administration has shifted a number of healthcare policies. Can you talk about what is new this year?
The Trump Administration has made several changes to the ACA’s rules. In last year’s tax bill, they include a provision that removed the tax penalty for those who don’t buy coverage, essentially removing the requirement that every American had to have health insurance. This means you will not pay a fee for not having health insurance, though I would caution going without is a bad idea. The administration has also made it easier for some people to buy short-term policies that do not include all the consumer coverage protections of an ACA policy.
In reaction to this, some states have made their own changes. In May, New Jersey adopted its own individual mandate, and California banned the sale of short-term health policies that don’t meet ACA standards. Maryland and Alaska have each added other programs to stabilize the insurance marketplace.
Unfortunately, the repeal of the individual mandate and the legalization of short term insurance, along with other regulatory changes made by the administration, have caused some uncertainly in the markets, and we have seen premiums rise about 16 percent higher this year according to the Kaiser Family Foundation. That may mean some of us will pay more for coverage this coming year.
Mellody 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 and CBS.com.