Open Enrollment: Choosing a Healthcare Plan (HMO, PPO, FSA, HSA, HDHP and More)
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What is open enrollment and when does it occur?
Hey listeners, Sarah here with a super quick announcement before we get into today's episode on open enrollment. I just want to let you know that we will be talking about the results of this week's election in a special episode this Monday. So no politics today, but know that our editors are hard at work so we can help you understand what the results mean for your finances. Now, enjoy today's episode.
Hello, dear listeners, Sean here. Today and this month, we're reprising a special series we brought you last year on open enrollment. It was so nice, we're running it twice. Plus, we miss our old friend Liz Weston and wanted to bring her out of retirement, sort of. This series is chock-a-block with specifics on this really important time of year when a lot of people are choosing their healthcare and other benefits. So sit back, perhaps with a cup of something delicious, pumpkin spice, peppermint, or not, and enjoy. Decisions, decisions. Sometimes it's hard to make them. And that goes double when you're trying to figure out which health plan to choose during open enrollment.
How much health care do you use? How often do you see the doctor? Do you have any major surgeries or procedures coming up? Are you planning to try for a baby? Do you have small children? All of these things can affect what kind of plan makes sense for you.
Welcome to NerdWallet's Smart Money Podcast. I'm Sean Piles. And I'm Liz Weston. This episode kicks off our nerdy deep dive into open enrollment. Yay! Liz?
Sean, did you just yay open enrollment? Sarcastically. Oh, okay. Well then, yes. Yay. And I'm confident in predicting that nobody actually says that at this time of year.
Yeah, it's not my idea of fun to sit down and try to figure out if I want a high deductible plan. What my premiums will be, what prescriptions are covered or not, if I should use an HSA or FSA, how to decide on life insurance and disability.
John, you're spinning out, as we all want to do during open enrollment. And for those who aren't following along too closely, open enrollment is that time of year, typically anywhere from October to mid-December. when people in employer-sponsored health plans and public and private health plans, including through Affordable Care Act exchanges, get to choose their individual and family plans for the coming year. Right, and we are smack in the middle of that right now. It's kind of like tax time in April and sometimes just as confusing.
And fraught. Because if you make a mistake, you're stuck with it for a year.
Exactly right. And we as a populace are not too good at making the right choices. In one study, more than 80% of the employees at a Fortune 100 company picked the wrong health insurance plans. They went with low deductible options that ultimately cost them more. Another study found that inertia, sticking with the same plan rather than evaluating the options each year and choosing a better one, cost workers an average $2,032 annually.
Sheesh. And Liz, health insurance is often just one of the decisions we have to make during open enrollment. Should we get our company's life insurance or buy our own? Use a flexible spending plan or health savings account? Do we really need disability insurance? And what about some of the newer benefits employers are adding, like pet insurance or adoption assistance? How much of this is must-have, how much is nice to have, and how am I going to afford all of it? That last question is really the crux of all this, isn't it? It is. Well, we are coming to the rescue for those of you who haven't made those decisions yet. And if you already have, good for you. We hope you chose well. But if you're still in the morass of plan evaluation, we are going to walk you through a lot of the process over the next three weeks of this series.
So get a cup of coffee and get out your plan options, and we'll see if we can help you sort it all out. Today, it's healthcare. Episode two, we're covering all kinds of other insurance, including disability. And episode three, we're talking about vision, dental, pet care, and more. I mean, how bad can it be? We're talking about benefits.
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