Fall brings about many things: cooler temperatures, apple cider, pumpkin farms and Sunday football to name a few. Another fall happening that evades many is open enrollment. Open enrollment is a window of time where people can enroll in benefits for the first time, change their health care coverage or plan, or drop coverage completely.
There are Three Main Types:
- Employer-based health insurance, which typically takes place in the Fall around November so that the new benefit elections take effect at the beginning of the year.
- Health insurance marketplace coverage for the self-employed, which is bought on the government health insurance marketplace from November 1st through December 15th.
- Medicare, the federal health insurance program for people who are age 65 and older, certain younger people with disabilities and those with end-stage renal disease. Changes can be made from October 15th through December 7th. Medicare advantage plans have an additional open enrollment period from January 1st through March 31st. Medigap, which is extra health insurance that you buy from a private company to pay for services that Original Medicare doesn’t cover, has an open enrollment period of six months starting when someone becomes eligible for Medicare.
There are other forms of insurance and circumstances that allow enrollment and changes to be made at other times. For example, qualified events such as marriage, divorce, birth, adoption and death are exceptions to the annual selection period.
Review Your Situation
Things change. Have your needs changed since last year? Perhaps you had a child, were recently married, or were diagnosed with a condition that requires more frequent doctor visits. Maybe your specific circumstances warrant term life insurance or disability life insurance now, where they didn’t before. Ask yourself key questions prior to open enrollment so you are prepared to make the choices that support you and your family best.
Beyond the changes that take place in your life, companies make changes regularly too, in the way of plans and premiums to keep costs down and stay in tune with the times. Perhaps the providers of your benefits have changed. As a result, the doctors considered to be “in network” may have changed, and the claims and pre-approval processes may have changed. Maybe your employer’s prescription drug coverage has changed.
Reflect on all aspects of the coverage and plan including premiums, deductibles, co-pays, total out-of-pocket limits, additional options such as Health Savings Accounts (HSAs), the claims and pre-approval process, “in network” versus “out of network” providers and coverage amounts, and more. If your spouse has a health insurance plan as well, take the time to compare it to yours. Since plans change from year to year, their plan may be a better fit at this point in time.
Companies are unique and individualistic, but when it comes to insurance, patterns often emerge. Some of the current trends being seen are virtual care options, such as Teledoc, allowing consultations via a website or app. Health insurance providers view this as true value due to its ability to increase patient access by eliminating the barriers of time constraints, mobility issues, or driving distance. They also see cost savings, increased provider efficiency, and convenience as benefits.
Another trend is consumer-based health care plans with higher deductibles and out of pocket costs, but with the opportunity to open a Health Savings Account (HSA). Due to the benefits of HSAs and the tax benefits such as the ability to grow tax free, as well as their ability to be tapped tax free to pay for qualified healthcare expenses, their popularity is growing. There is obvious risk associated with HSAs should you come down with a chronic medical condition or if you know you will be needing expensive medical care in the near future. However, if you don’t get sick that often or your medical need is minimal, HSAs could be beneficial for you. If you want to know how long you would have to go without any major medical care before the HAS/HDHP combo saves you money (break-even point), you can calculate your yearly savings by choosing the HSA (add the employer contribution and the premium savings together) and compare that to the HDHP deductible.
2020 Medicare Changes
There are new rules governing prescription drug coverage, out-of-pocket costs, and Medigap changes for new enrollees and new benefits available to Medicare Advantage plans provided by private insurers. The Medicare Plan Finder, which helps compare options has also changed.
Pay attention to any changes in coverage. The Medicare and You handbook is a great resource and available on www.medicare.gov. For those with a Medicare Advantage or Part D plan, review the website for notices highlighting changes in benefits, costs and provider networks for the upcoming year. Some changes that will have an impact on many: the total out-of-pocket spending required to reach “catastrophic” coverage increases to $6,350 in 2020 from $5,100 in 2019. Also, starting in 2020, Part D plans are allowed to limit coverage of a drug to specific indications. Another change to hit 2020 is people who are newly eligible for Medicare on or after January 1, 2020, will not be able to purchase Medigap Plan C or F (the two plans that cover the Part B deductible). If you already have these plans, you can keep it. If you don’t but qualify by eligibility date, you can still buy these plans in the future. Keep in mind that plans and eligibility rules vary by state.
Navigating all the changes that take place can be overwhelming to say the least. The State Health Insurance Assistance Programs (SHIP) can help seniors weigh the benefits and compare plans.
What it all comes down to is that Open Enrollment is not a one and done type of scenario. It is an event that warrants careful planning and consideration. The decision you make during open enrollment can either cost you or save you a significant amount of money. So, take your time, review your options, and choose wisely.
For more information about open enrollment, contact Geier Asset Management today!
Sources: Money.USNews.com/ Kiplinger/ Smart Balance/MedicalEconomics.com/ Medicare.gov/ Shiptacenter.org/Shrm.org
© Geier Asset Management, Inc. October 2019. Dan Mules, CPA is a Client Manager and Tax Planning Professional for Geier Asset Management, Inc., a Registered Investment Advisor. The articles & opinions expressed in this material were gathered from a variety of sources, but are reviewed by Geier Asset Management, Inc. prior to its dissemination. All sources are believed to be reliable but do not constitute specific investment advice. The views expressed are those of the firm as of October 2019 and are subject to change. These opinions are not intended to be a forecast of future events, a guarantee of results, or investment advice. Any advice given is general in nature and investors must consider their own individual circumstances. In all cases, please contact your investment professional before making any investment choices. Geier Asset Management, Inc. is not responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.