The open enrollment period for the Health Insurance Marketplace, which was created under the provisions of the Affordable Care Act (ACA), or “Obamacare,” generally begins in November each year. However, enrollment periods for employer-sponsored plans, private insurance, Medicare, or any other form of coverage all have different dates.
What Is Open Enrollment?
During open enrollment, employees have the option to enroll in benefits for the first time, change their current plans or coverage amounts, or drop coverage completely. These decisions have a significant financial impact, so it’s important to weigh your options carefully.
When Is Open Enrollment?
Your employer’s open enrollment usually lasts a few weeks, typically at the end of the year. During that period of time, employees can make changes to their various benefit plans. These changes usually cover benefits such as health insurance, vision plans, dental plans, and life insurance.
Things to Consider During Open Enrollment
For most people, the largest component of their benefits package is health insurance. Even if you don’t anticipate any changes in your personal situation or your insurance needs, the coverage itself may be changing. Be sure to review all details carefully. Here are some important issues to consider.
Changes to Coverage
Take the time to compare your current coverage to what is available for the upcoming year. For example, coverage for things like physical therapy on your health insurance or braces on your dental insurance might change from one year to the next. Especially if this is coverage you or your family members need, you don’t want to be surprised.
Changes to Cost
Cost increases can occur in multiple ways. Your premiums can go up, which means your take-home pay will be reduced if the cost is deducted from your paycheck. In addition, deductibles and co-pays can also increase.
Alternative Options
If you and your spouse each have employers that offer health insurance, your open enrollment periods are a good time to compare your best options. If cost or coverage is changing, it might make sense for each of you to stay with your own employer’s plan, or for both of you to be on the same plan depending on which plan works best for you and your family. If you have children, this is also a good time to compare policies to determine which offers the best coverage at the best rates.
HSAs and FSAs
A health savings account (HSA) can be a good way to help offset some of the higher costs of health care. With an HSA, you’re allowed to put pre-tax money into a separate, interest-bearing account that can be used to pay for medical expenses. To qualify for an HSA, you’ll need to be enrolled in a high-deductible health plan (HDHP). If you’re unsure whether your current plan qualifies, that’s something you’ll want to consider before the start of open enrollment. If your employer offers an HDHP with an HSA, check to see if it offers employer contributions to match the money you’re saving in your account. A flexible spending account (FSA) also allows employees to set aside pre-tax dollars for medical expenses. FSAs are a simpler option than HSAs, because contributions typically do not roll over. However, if, for example, you know you will be spending $1,000 on out-of-pocket on prescription drugs and other co-pays. it makes sense to have that much money taken out of your paycheck over the course of the year. Doing so reduces your taxable income by $1,000.
Medicaid and Medicare Open Enrollment
Enrollment in Medicaid is available any time your income drops below the modified adjusted gross income (MAGI) required to qualify. For Medicare, the initial enrollment period is whenever you turn 65 or otherwise become eligible. After that, there is usually an open enrollment period every year from Oct. 15 through Dec. 7 during which you can make changes to your existing Medicare coverage. During this time, you can also enroll in a Medicare Advantage (Part C) as long as you have Parts A and B; or you can enroll in a Part D (prescription drug plan) if you have Part A or Part B. There’s also a Medicare Advantage open enrollment period from Jan. 1 through March 31 each year. During this period, you can drop or switch your existing Medicare Advantage plan.
Why Open Enrollment Is Important
With most types of benefits, once you select an option, you are bound to that option for an entire year unless you meet a few exceptions. Each year during the open enrollment period, you are making a commitment to the coverages you choose and to the cost of those coverages. You will be unable to change that plan until your next open enrollment period or a major qualifying event. There are three main categories of qualifying events:
Loss of health coverageChanges in householdChanges in residence
Loss of health coverage includes such circumstances as losing a job and access to its employer-sponsored plan, losing eligibility for Medicare or Medicaid, or reaching age 26 and losing coverage through a parent’s plan. Changes in household might include getting married or divorced, having a child, or suffering a death in the family. Changes in residence generally involve moving to a new ZIP code or county. There can be several other circumstances that meet the definition of a qualifying life event, so it is important to review your policy and consult with human resources if it is an employer-sponsored plan.
