This time of year brings some annual events that come with exciting (if stressful!) questions. What costume will you wear to the Halloween party, for instance? Who’s bringing what to Thanksgiving dinner? And how do you shop for a holiday gift for that one relative who has everything?
While we can’t help you decide on the perfect side dish or thoughtful gift, we can help take some of the confusion out of one of these annual events: open enrollment. Our goal at Collective Health is to help people better navigate our complex, and often outright confusing healthcare system, and for many, this journey begins at open enrollment.
Whether you’re a benefits leader, an employee, or just someone who could use a refresher on common healthcare jargon, this guide is intended to help you nail the basics of open enrollment so you can feel confident in your healthcare decisions (and help others do the same!) Now, let’s get started!
What is open enrollment?
Open enrollment is the time period each year–typically in the fall–when individuals can select and sign up for health coverage for the following year. This period usually only lasts for a matter of weeks, and if you fail to enroll during that time, you may have to wait until next year or a “qualifying life event,” like marriage or moving, to sign up or change your plan.
Don’t panic–your benefits team will let you know the exact dates of your enrollment and give you plenty of warning before the period ends. For those without employer-sponsored coverage, open enrollment for most states begins on November 1 and ends on January 15.
Understanding your health benefits plan
During open enrollment, you will likely get to choose between a few health benefits plans, which will typically differ in pricing, coverage, network access, flexibility, and additional service offerings.
Making sense of these plans, and how they’re different, can be complicated. From the varied types of health plans to specific health insurance terminology, there’s a lot of information to ingest and sift through. The first step is understanding what these health plans are, plus some key terms, and then you can start putting it all together.
Most common types of health plans
HMOs (health maintenance organizations) require you to choose a primary care physician (PCP), and receive referrals from your PCP to see specialists. These plans generally have smaller networks, but have lower premiums and out-of-pocket and prescription costs.
PPOs (preferred provider organizations) offer more flexibility because you have access to a larger network of providers. You don’t need to receive a referral to see a specialist, and you don’t need to stay in-network to receive care. These plans will have a list of preferred providers that cost less, and it will be more expensive to go out-of-network. These plans generally are more expensive.
EPOs (exclusive provider organizations) are a mix of HMOs and PPOs, in that they have an exclusive network like HMOs do, but don’t require a referral to see a specialist, as in PPOs. They require you to stay within network but generally have lower monthly premiums than PPOs.
POS (point of service) plans combine different features of HMOs and PPOs, namely that they may require you to select a primary care provider and seek referrals to see specialists, but will still cover visits to out-of-network providers. These plans are rare, and typically cost less than PPOs but more than HMOs.
HDHPs (high deductible health plans) are characterized by their–you guessed it–high deductibles, and typically low monthly premiums. HDHPs fully cover routine preventative services, and let you open a health savings account (HSA) to save money to pay for out-of-pocket expenses or copays.
You may be thinking, so now what? How am I supposed to choose between these? And what the heck is a deductible?
First, let’s explain some of the jargon, before you start trying to narrow down your choices.
Translating healthcare jargon
We field a lot of questions about terminology–helping people make sense of healthcare is what we do. If you’re a Collective Health member, you have an entire library of terms available to you through the My Collective™ Help Center. But for now, here are the most commonly searched terms in the Help Center, as well as the terms that would be most helpful for you to know.
A premium is the amount of money you pay each month for health coverage. If you receive health benefits through your employer, this is typically deducted from your paycheck.
A deductible is a set amount of money you pay up-front for care. For most services, you’ll have to first pay the full amount to “meet your deductible” before your health benefits plan “kicks in” and shares costs for the rest of the year.
A copay (or copayment) is a fixed amount of money that you pay when you receive care, typically per service or visit. Usually, you don’t need to meet your deductible for the copay amount to apply and copays won’t count towards your deductible. For example, if your plan has a $10 copay for every in-network specialist visit, you will owe that $10 no matter what (and possibly in addition to other costs).
Coinsurance is a varying amount of money that you pay when you receive care, calculated as a percentage of the allowed amount for a service. Typically, coinsurance doesn’t kick in until you’ve met your deductible. For example, say you’ve met your deductible of $500, your plan has a 10% coinsurance for every in-network specialist visit, and your last visit was $100. In this example, you would owe $10.
A network is made up of the providers and suppliers your health benefits plan has teamed up with to provide healthcare services.
A provider is a term used to refer to a physician, healthcare professional, or healthcare facility.
The difference between in-network and out-of-network refers to the relationship a given group of providers have with your health benefits plan.
When you go to an in-network doctor, your health benefits plan has pre-negotiated how much a service or procedure should cost. This is called an “in-network rate,” or sometimes referred to as a “contracted rate” or “in-network allowed amount.”
When you go to an out-of-network doctor, because your health benefits plan does not have pre-negotiated rates, you might be charged more for the same services and care. Your plan will probably require you to pay a larger portion of the cost.
The out-of-pocket max is the most you’ll pay for care during your plan year before your health benefits plan begins to pay 100 percent of any allowed amounts. It’s important to note that this amount doesn’t include your premium, balance-billed charges, or healthcare services your plan doesn’t cover.
An allowed amount is the price your plan determines is appropriate for care. When you see a healthcare provider, your plan’s benefits will be based on this allowed amount, which will vary per network. Out-of-network providers can charge members more than the allowed amount, but in-network providers typically can’t.
Choosing the right health plan
As you sort through all of the options available to you, think about which plan will best fit your health needs and your budget in the coming year.
Assessing your health needs
Thinking about your and your family’s health needs is ultimately a personal decision that requires looking at your health history and anticipating your future needs and desires. Ask yourself some of the following questions to get the wheels turning:
- When has your family typically seen a doctor in the past? Are there any ongoing medical conditions, chronic illnesses, or potential health concerns? Your family’s health history will help you anticipate the level of care and the type of services you’re likely to want in the coming year.
- How would you describe your lifestyle? Are there any big life changes coming your way, like expecting a baby or a major surgery, or a family member aging into Medicare? If your family is especially active, for example, you may want to consider plans that make it easy to see a specialist in case of an injury. Other lifestyle changes or predicted expenses may also affect your insurance needs.
- Do you have a doctor or specialist you love, who you’ve been going to for years? Are there any non-negotiables, like a specific hospital or prescription? If yes, you’ll want to make sure that the plan you choose allows you to access this care, and a PPO would likely make it easier than other types of plans. If you don’t have a preference, don’t plan on seeing many specialists, and want to keep monthly costs down, an HDHP may be a good choice for you.
- How do you feel about your current plan? Were there any big surprises this year? Identify if anything went wrong, and see if a different plan would help you avoid similar pitfalls next year.
Figuring out your budget
Only you know how much you’re comfortable spending on healthcare in a given year. Once you have an idea of your and your family’s needs, you can combine that knowledge with your preferences and budget restrictions to hone in on the best choice.
Is paying a higher premium worth it to you to maintain access to your favorite doctors? Or would you rather pay a lower premium but shoulder more of the costs when receiving care?
Consider copays, coinsurance, and deductibles, not just the premium, when mapping out your total potential costs.
Bringing it all together
Get to know each of the plan options available to you. After a thorough assessment, select the plan that best aligns with your family’s health needs, budget, and lifestyle, and complete the enrollment process before the deadline.
If you’re unsure about how to reach a decision, don’t hesitate to seek advice from a benefits specialist or your HR department. If you’re a Collective Health member, our team of Member Advocates will be on hand throughout open enrollment (and year-round!) to answer any questions you may have about your plan options.
Remember that your needs may change from year to year, so revisiting this process during open enrollment is especially important to make sure you get the care you and your family need.
