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The open-enrollment period for your health-insurance plan comes once every year, usually during the fall. The corresponding paperwork typically generates as much enthusiasm as your yearly tax forms. But don't be tempted to just put a check mark next to your current plan. With so many insurers and employers raising health-insurance premiums and scaling back benefits, you need to know how your health plan stacks up against the others offered to you at work.
After all, you're stuck with your decision for a whole year, so you need to make sure it's right for you.
If you don't know that your plan is dropping coverage for your brand-name prescription allergy drug, for example, you'll be in for a rude awakening next year when the pharmacist asks you to hand over $180 for 100 tablets rather than your usual $25 co-payment. You won't be able to go back to your benefits administrator and ask to switch to a plan that will pay for your prescription.
The following information will help you make the best decision during the open-enrollment process:
What types of changes can I make to my health-insurance plan during open enrollment?
If you're not currently enrolled in a health-insurance plan, you may enroll at this time. If you are enrolled, you may switch plans (if this is an option), correct inaccurate information or add eligible dependents, such as a spouse or children not previously covered.
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It depends on your situation. If you're young and healthy, you can go for lower premiums and higher co-pays. But if you're older, have a chronic health condition or have young children who make frequent visits to the doctor, you're better off with higher premiums and lower co-pays. You also have to weigh the value of your health plan vs. price. If you go with a cheap health plan but it doesn't pay for the benefits you need, you are not getting good value for your health-insurance dollars.
What is a lifetime maximum benefit?
A lifetime maximum is a cap on the amount of benefits available to a policyholder. The cap is designed to keep the cost of benefits affordable and to stabilize potential future costs. Many health plans cap lifetime benefits at $1 million and are most often applied to mental illness, drug and alcohol treatment, and organ transplants.
If a plan has a relatively low lifetime maximum cap, think carefully about how much risk you're willing to assume. Even if you're healthy, the expenses incurred from one severe car accident -- including hospitalization and outpatient physical therapy -- can easily exceed a $100,000 cap.
Can I switch health plans without undergoing medical screening for pre-existing conditions?
Yes. This is the one time during the year (unless you experience a "qualifying event," such as the birth of a baby) during which you may make changes to your plan without having to sit out a pre-existing condition exclusion period. Late enrollees in group health plans may have to wait as long as 18 months for coverage of pre-existing conditions.
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What you need to know to be coveredSandy Praeger, president of The National Associate of Insurance Commissioners, tells you what you need at any age.
There are several health-plan varieties, including traditional fee-for-service plans (FFS), health-maintenance organizations (HMOs), point-of-service plans (POS) and preferred-provider organizations (PPO). Each plan has its own features to consider before making your choice.
HMOs are the least expensive but also the least flexible. They require that you select a primary-care physician. You must obtain pre-authorizations for certain medical procedures and in order to see specialists. POS plans are more flexible than HMOs, but they also require you to select a primary-care physician.
PPOs give policyholders a financial incentive -- in the form of reasonable co-payments -- to stay within the group's network of practitioners, although you can usually visit out-of-network specialists without pre-approval.
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