I just got my first email from our company about our upcoming Open Enrollment sessions, and I have to tell you, I wasn’t as excited as I thought I’d be. It was a little disappointing.
But it made me think: What are the things I want to hear before Open Enrollment?
In a perfect world, probably “We actually just adopted a new policy where enrollment is automatic. You no longer have to attend meetings. We use an opt-in process to match you with the best health plan based on your lifestyle, as well as the best tax-free accounts based on your savings goals, which you provided on your date of hire”.
And then I’d go back to work.
But, we don’t live in a perfect world.
So, what are three ways you can have a better benefits season?
In other words, how to answer the question: “How do I make an informed healthcare decision that I won’t regret later?” We recommend three steps:
- Start with the expenses you had last year.
- Ask yourself “Do I need to worry about out-of-pocket expenses?”
- Enroll in the coverage that meets the greatest number of needs
Start with the expenses you had last year.
Use that as a framework to see what kind of health plan and pre-tax options might be the best fit for you this year. The more you can do to understand your health costs last year and if you will have similar costs this year, the better.
For example, look at:
- # of doctor’s visit
- any health conditions
- are you prone to accidents
- do you need a prescription? Do you have the ability to pay for out of pocket expenses?
We created a flowchart to help answer these kinds of questions and help you determine which pre-tax account might be best for you.
The next step to a better benefits season is to…
Ask yourself “Do I need to worry about out-of-pocket expenses?”
Trick question. Almost everyone has out-of-pocket expenses. It’s one of the side effects of living in a not perfect world.
But for those who don’t live in a daily world of healthcare jargon, what are out of pocket expenses?
An out-of-pocket expense, according to HealthCare.gov, is “Your expenses for medical care that aren’t reimbursed by insurance. Out-of-pocket costs include deductibles, coinsurance, and copayments for covered services plus all costs for services that aren’t covered”.
This is where tax free accounts from Benefit Resource come in. These accounts are designed to cover eligible out-of-pocket expenses. That’s why they’re there. (Read more about what qualifies as an eligible expense).
Now, which pre-tax account you can enroll in depends on what kind of health insurance you have.
Type of Insurance Plan
Pre-tax Account to Enroll In*
|Qualified high deductible health plan||Health Savings Account|
|Co-pay or co-insurance health plan||Flexible Spending Account
Health Reimbursement Account
*This is a high level chart. There is more nuance than this, but this is a good starting point for beginners. For a more in depth view at how health insurance plans interact with pre-tax account options, check out this blog and this blog.
And finally, the easiest step… Step three.
If you really want a better benefits season (and to survive Open Enrollment), you need to enroll. “Enroll” is a two-part process:
- Choosing an insurance plan that fits your healthcare expenses
- Finding the right pre-tax plan to cover your out-of-pocket expenses.