Navigating Open Enrollment 2024

Open enrollment is coming again soon and it's never too early to start thinking about how you and your family will approach it. With inflation and rising interest rates, the cost to do just about anything nowadays is all anyone can talk about. From the cost of a gallon of gas or a gallon of milk, to the cost of a dozen eggs or a movie ticket, everyone, everywhere has seen all areas of their lives affected. Now is a time, more than ever, to do your due diligence and really understand where your dollars are going, and that includes your healthcare costs.

Open enrollment is the period of time each year during which an individual or family is able to enroll in a new health insurance plan or make changes to an existing plan. In fact, it is ONLY during this time of the year that you are able to enroll in a new health insurance plan for the upcoming calendar year, unless there are qualifying special circumstances in the future. During open enrollment, a person can purchase a health insurance plan, switch to a different insurance plan, add family members or remove family members from insurance plans, or apply for subsidies to help pay for health insurance. In Florida, open enrollment for 2024 is 11/1/2023 to 1/15/2024. Open enrollment dates may vary depending on the state. Employer-sponsored health plans often have enrollment periods that may vary as well.

There are several things to starting thinking about before open enrollment in order to prepare.

• What was your medical activity like this past year? Was it relatively quiet? Do you think you will have many office visits? Many specialist visits?

• What do you anticipate your medical expenses to be this upcoming year? Do you anticipate a big surgery this year? Do you take a lot of medications?

• Do you have a list of "must-have" doctors or medications or facilities? Will they be in your network?

• What is your household income for the year? Do you think you might qualify for subsidies? Can you afford your co-pays? Can you afford your monthly premium? How reasonable is your deductible?

• Do you need vision insurance? How about dental coverage?

Another important question to ask and not overlook is: does your employer offer a Flexible Savings Account? A Health Reimbursement Arrangement? Might you qualify for a Health Savings Account?

How do you sign up for an insurance plan?

• Most individuals are able to sign up through their workplace/employer. Check with your HR department to find out when open enrollment starts for you.

• Federal marketplace. healthcare.gov

• State marketplace if you live in CA, CO, CT, Washington DC, ID, KY, ME, MD, MA, MN, NV, NJ, NM, NY, PA, RI, VT, WA

• Private insurance company (like Blue Cross Blue Shield, UnitedHealthcare, Cigna)

• Insurance broker

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Let's get into this in more detail.

Once you start looking at different plans, what do all of those terms mean?

HMO Health Maintenance Organization. This plan requires you to choose a specific primary care physician (PCP) within the HMO network. If your PCP feels it is necessary to refer you to a specialist, the specialist must be within the HMO network. Services outside of the HMO network are typically not covered. Pros: typically lower monthly premium and lower out of pocket cost. Cons: least flexible in terms of specialized care/referrals; all specialized visits require referrals from your assigned primary care physician.

EPO Exclusive Provider Organization. This plan is similar to an HMO. Members only have coverage for in-network providers but you are not required to choose a specific primary care physician (PCP). With EPO plans, you do not need a referral from your PCP to see a specialist within the network; however you will likely need pre-certification (approval) for most tests and expensive services. Pros: typically mid-level monthly premium cost. No primary care physician is required. No referrals for specialist care is required. Cons: All services must be in-network. You will be responsible for the full cost of all out-of-network services. You are responsible for knowing what is in or out of network.

PPO Preferred Provider Organization. This health insurance plan provides maximum benefits for members visiting in-network providers BUT will still offer some benefits for visiting out-of-network providers. Referrals to specialty providers are not required from your primary care physician. Pros: Greatest flexibility for patients. No referrals needed. Gives patients more control over provider options. Cons: Higher monthly premium cost. Higher out of pocket expenses with higher deductibles.

Other terminology

HDHP High Deductible Health Plans. As you can probably guess, this plan has a high deductible but a lower monthly premium. It also often offers wellness benefits to members even before the deductible is met. These plans are becoming increasingly more common. Only HDHPs qualify for the tax-advantaged Health Savings Accounts (HSAs) (More on HSAs later). HDHPs may be a good plan to consider for those individuals who are healthier and tend to be low-utilizers of the healthcare system.

HSA Health Spending Account. This is a tax-advantaged account that can only be utilized with a qualifying HDHP (High Deductible Health Plan). The individual elects an amount to be allocated tax-free (up to a maximum amount mandated by the IRS each year; in 2023 maximum contribution for individuals was $3850 and for families was $7750) into an account that can be used to pay for qualifying medical expenses. The funds deposited into this account are owned by the individual and rolled over year over year, and can be transferred with the member even if he/she leaves that employment. The funds in this account accrue interest tax-free and can even be invested into other mutual funds or stocks. HSA funds taken out and used for qualified medical expenses are also untaxed; thus HSAs are considered "triple" tax advantaged (Contributions, investment earnings, and distributions are not subject to federal taxation).

HRA (Health Reimbursement Arrangement or Health Reimbursement Account). This is similar to an HSA but this is an employer-funded, tax-advantaged health benefit provided by some employers. An HRA is used to reimburse employees for out-of-pocket medical expenses and, sometimes, personal health insurance premiums. HRAs are not required to be linked to HDHPs like HSAs. In Health Reimbursement Arrangements, an employer decides how much pre-tax money will be put into the account and what qualifying medical expenses can be reimbursed. The employee submits a claim for reimbursement directly to the employer.

FSA Flexible Savings Account. This is a tax-advantaged, employee-funded benefit plan offered by some employers to cover qualified medical and/or dependent care expenses. Employees elect an amount of pre-tax dollars (up to a maximum set by the IRS each year -- in 2023 it was $3050) to deduct from his/her paycheck and allocate to the FSA account. Funds in this account may be used towards qualifying medical expenses and prescriptions. The list of qualifying expenses is actually quite extensive but the FSA funds must be used before the end of the year or they are lost.

..... WHEW. THAT'S A LOT TO DIGEST.

Now what? Now it's time to sit down and decide. What can you reasonably afford vs. your health. Your current health. Your future health. Your family's health. Accidents. Emergencies.

I get it. It's a lot to decide. We're not talking $20 plans. These plans can cost a family thousands of dollars per year. It's a big decision. Talk to your friends. Talk to your family members and neighbors. Talk to those you trust in the medical community. Ask questions. And take advantage of the cost-savings options when you can. Flexible savings accounts, Health savings accounts can have some real, tangible advantages in the form of cost savings.

Lastly, there are other, outside-of-the-box options to look into such as health sharing plans. Health Sharing Plans is a topic that deserved its own post so please go back and read the post that was written not too long ago on this topic. HSPs are another valuable, and not-so-known option that could be the one that fits your family the best.

Oh. And think about how Direct Primary Care memberships can fit into this conversation. DPC fits into many of these plans wonderfully. If you want to know how.... call us at (904) 551-4625 or send us an email bewell@cardonadpc.com and we'd be happy to explain how.