What to Know Before Open Enrollment

Open enrollment season may not be anyone’s favorite but it does mark the critical time when you can review your health insurance coverage options and make changes to your plan selection for the upcoming year. While it’s tempting to stick with the status quo, there may be changes in your existing plan that lead to coverage that no longer suits your needs.

Timelines vary, but most HR departments hold open enrollment for a few weeks between October and December. During your open enrollment period, you’re able to select your health care coverage for the upcoming year, January 1, 2024 through December 31, 2024. If you miss the deadline, you’ll typically remain with your current health plan until next year’s open enrollment period—that is, unless you change jobs or have what’s known as a qualifying life event, such as getting married or having a child.

If you get your health care through Healthcare.gov, open enrollment starts November 1, 2023, and ends December 15, 2023, for plans that begin January 1, 2024.

With all the plan variations, complex terminology and constant changes in the marketplace, navigating open enrollment can quickly become overwhelming. However, the choice you make can have a big impact not only on your health, but on your finances as well. Here’s what to know before open enrollment so you can make the decision with confidence.

What to know before open enrollment

Consider the costs

There are a few terms you’ll want to become familiar with when evaluating a health care plan:

• The premium, or the amount you pay each month for coverage.
• The deductible, or the amount you must pay out of pocket before your insurance kicks in.
• Out-of-pocket costs, such as copayments and coinsurance: The copay, or the set rate you pay each time you visit a doctor or fill a prescription; coinsurance is the percentage of charges you may have to pay, for example, 20 percent of hospital charges.

Higher premium plans typically have lower deductibles and copays, while lower premium plans are usually the opposite. That means you’ll need to run some numbers to determine if it’s better for you financially to pay more for your coverage on a monthly basis or more when you visit the doctor.

While you can never predict an unexpected health emergency, many people use medical services only infrequently. However, if you or a family member has a chronic condition that requires routine visits or regular prescriptions, you’ll want to consider how the fees will add up.

Make sure you fully understand when your deductible applies (copays, for example, do not typically count toward your deductible), and what happens after you meet it—just because you’ve reached your deductible doesn’t mean you won’t have additional out-of-pocket costs.

Know your acronyms

Health plans typically fall into three general buckets: HMO (health maintenance organization), PPO (preferred provider organization) and HDHP (high-deductible health plan). This guide offers some pros and cons of each type of plan.

When deciding which type of plan is best for you and your family, think about your anticipated medical needs and balance it with the costs. If most of your medical expenses are for preventative care, such as health screenings or shots, most plans will cover these standard services, as long as you use an in-network provider. So if you live in an area where there are multiple in-network providers to choose from, you might consider an HMO, which often has lower premiums, but a more geographically restricted list of providers.

If you receive medical care from a specific provider, you’ll need to determine if they are “in network” or not. If the provider is out of network, then you will likely need to pay additional costs, which can range from a percentage to the full cost of a visit. Check the plan’s list of providers to see if yours is covered and at what rate.

One thing to note with an HDHP is that you have the option of starting a health savings account (HSA) to offset the costs of the high deductible. An HSA allows you to save up for medical expenses in a tax-advantaged way, and these funds can be rolled over year after year if you don’t use them. For 2024, the annual limit on pre-tax HSA contributions is $4,150 for individual plans and $8,300 for family coverage.  HSAs are also portable, so if you change employers midyear, the HSA account will remain yours and you will still have access to the funds. 

Note excluded services

While federal law requires most plans to cover essential medical services, be sure to read the fine print for more specialized services. Common exclusions include cosmetic surgery, weight loss programs, infertility treatments, acupuncture and long-term care. Dental services and eye exams are usually not covered in medical plans, so consider adding supplemental dental and vision plans to fully meet your needs.  

If you’ve thoroughly read through your benefits summary and still have questions, don’t hesitate to talk to your HR representative or call the health insurance company. Even if you’re not planning to change your plan during open enrollment, you should review your coverage and look at your options to ensure your current plan is still meeting the needs of you and your family.