FAQ: What you need to know about health insurance open enrollment


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The more than 150 million Americans with job-based health insurance should have an eye out for their  workplace "open enrollment" period – that annual opportunity to review their policy and to make changes to their coverage for the following year.

"Employees should not let their insurance go on autopilot," says Larry Levitt, senior vice president with the Kaiser Family Foundation, a non-profit health policy organization that is not affiliated with Kaiser Permanente health plans. "They should look at options and review whether they're in the right plan."

And that's true, he says, even if this year your plan has worked well.  Why?  Because the one health insurance certainty you can count on is that plans change every year. 

First off, premiums go up and this year is no exception, says Caroline Pearson, a vice president at the Washington, D.C.-based research and consulting firm, Avalere Health. 

"We're projecting an increase of about 5 percent (for 2015)," Pearson says. "Costs were expected to go up about 6.5 percent but employers have made changes to benefit designs to keep premium increases down to 5 percent."

And one way employers are doing that is by increasing deductibles, which is the annual amount you owe for covered health care services before your plan begins to pay. 

These days it's not uncommon to find low-premium plans with deductibles of up to $2,000 or more, per person. Pearson says about 40 percent of employers now offer policies with deductibles in excess of $1,000.

But these aren't necessarily bad plans. In fact, Levitt says, they may make great sense for you if you're healthy and don't use your insurance much and if you have the cash to cover the high deductible in the event you do get ill.  And often, they're paired with a health savings account that allows you to pay-out-of-pocket costs with pre-tax dollars.

"You may end up saving money with a plan like that - but you want to go in with your eyes open," Levitt says. 

The best way to do that is to closely review the policy's "Summary of Coverage and Benefits." Under the Affordable Care Act, health insurers and group health plans are required to provide consumers with this form, which describes in easy-to-understand language the benefits of the policy offered by the employer.  It includes cost-sharing requirements, coverage limits and exceptions under the plan. 

The federal health law also requires that, upon request,  your employer provide you with access to summaries of all of its plan offerings, which makes comparison of plan choices easier. 

Finally, 2015 marks the first year that larger employers with more than 100 workers must provide those who work more than 30 hours a week with health insurance, or pay a penalty to the federal government.

"So more workers may find themselves eligible for benefits," Levitt says, "and they'll be learning that in the coming weeks during open enrollment." 

To help you get started, here are answers to six questions about open enrollment, along with some links to resources.

1. What is open enrollment?

It's the annual period that most companies offer when their employees can make changes to employer-sponsored health plans without being subject to underwriting or evidence of insurability.

2. When does it take place?

Usually at the end of the calendar year. Open enrollment typically lasts from one week to more than a month, depending on the company. Check with your employer's human resources department to find out when your company offers open enrollment.

3. What are my options?

That will depend on your employer’s offerings. But basically, you’ll need to know that health plans come in a variety of acronyms (think HMO, PPO, HSA).  Those your employer is most likely to offer include: 

4. What other basic insurance terms should I know before I start comparing plans?

Kaiser Health News provides a comprehensive glossary of health terms. 

5. My existing coverage works well for me. Can't I just ignore open enrollment?

Not a good idea - even if you’re happy with your existing plan, you’ll want to at least consider:

6. I don't like my employer health plan. Am I eligible for subsidized health care provided on Covered California, the state-run health care marketplace? 

Probably not. While there’s nothing to stop you from buying a plan through Covered California and paying full price for it,  those with qualified job-based health coverage aren’t eligible for the subsidies and cost sharing reserved for those who earn less than four times the federal poverty level.