How to avoid open-enrollment mistakes for health care benefits
As summer winds down, it means it's time to go back to school, bundle up with the cooler temperatures and, of course, watch some football. For many people, fall means something else too: open enrollment for health care benefits.
If reviewing your employer’s annual enrollment guide isn’t appealing, rest assured you’re not alone in your lack of excitement. Researching products, plans, deductibles and copayments isn’t most people’s idea of a good time. In fact, many don’t bother researching, so they end up making costly enrollment mistakes. Here is some simple advice to make choosing the right benefits less of a chore.
Do put your family’s needs front and center
Your health care benefits aren’t just about you. Your choices will affect your loved ones in the event of an accident, injury, or death. Insurance helps provide financial protection that goes a long way toward keeping your family fiscally sound. When you’re sick or hurt, benefits provide peace of mind so you can focus on getting better—not on how you’ll pay the bills.
Do align benefits with your overall financial picture
Is your bank balance looking anemic? Join the crowd. The sluggish economy put the brakes on raises and bonuses. At the same time, health care costs continued to rise. While you might be tempted to save money by reducing premium payments, cutting back on insurance protection isn’t wise. Without a lot of extra cash available to pay for unexpected medical costs related to a serious accident or injury, it makes insurance protection more critical than ever.
Do weigh the value of voluntary insurance
Many employers make voluntary insurance products available to workers. Options include disability, accident, hospitalization, life, vision and dental insurance, to name a few. Benefits from voluntary policies are paid in addition to any major medical insurance in force. What’s more, they’re paid directly to policyholders and can be used to help pay deductibles, copayments, the mortgage or rent, utility bills, grocery costs, auto loans and more.
Do consider life events
Health insurance needs change with age and circumstances. Take life insurance for example. If you’re young and single, you’ll generally need less coverage than someone who’s married with children. On the other hand, you might need just as much accident or disability coverage because you’d have no one to rely on if you were sick or hurt and couldn’t work. Reassess your health insurance needs annually.
Do meet with a benefits expert
Decisions about health care coverage are more complex than ever. Take advantage of any opportunity to meet with a benefits expert. You’ll get free, no-pressure advice about your unique needs and concerns before deciding which benefits to choose.
Do not ignore enrollment literature explaining the benefits offered
It’s all too common for a person to select the same benefits and coverage amounts every year, and many waste hundreds of dollars on easily avoided enrollment mistakes. If your company provides an enrollment guide or other materials explaining your benefits, be sure to peruse the information. You’ll be better informed and more confident about your choices.
Do not underestimate the odds of illness or injury
Americans are in denial about being sick or hurt. While it can certainly be morbid, we just don’t think that we or a family member will be diagnosed with a chronic illness. However, chronic illness is the leading cause of death and disability in the United States. You don’t have to live in fear or plan on getting cancer or other chronic illness, but it’s important to at least take the proper steps to be financially prepared in case you are faced with such illness and the medical bills that come with it.
Do not overlook your spouse’s options
If you’re part of a two-income household, prepare for open enrollment by reviewing your spouse’s insurance options and your own. Compare networks, coverage limits, exclusions, deductibles, copayments and premiums. It may be smarter for both of you to be insured under the same plan, or to be insured separately.
Do not forget your adult children
If you have an adult child without a job, or is living at home, or simply doesn’t have health insurance. The good news is that adult children can remain on or be added to their parents’ health insurance policies until they are 26 years old. This includes those living at home, as well as those living away from home, or attending school.
Do not dismiss voluntary insurance as unaffordable
Some people think voluntary insurance is a “nice to have,” not a “must have.” But consider what would happen if you were injured or ill and couldn’t work. Without your paycheck, could you maintain your standard of living? The answer is probably “No.” If that’s the case, voluntary coverage moves from the “nice to have” to the “must have” column. There are many options when it comes to benefits and coverage, so choose a plan that fits your needs and budget.
Summary Resolve to understand your current health insurance coverage, including your major medical policy and any other policies in force. Also take time to read and absorb information provided by your employer and benefits experts. When open enrollment arrives, consider your needs as well as those of family members when making choices. By doing so, you’ll benefit from the peace of mind and financial security that the right health insurance coverage helps provide.
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