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Don’t be surprised if you spend more time this year choosing health benefits during the open enrollment season.
Between rising inflation, policy changes and employees asking for more health care services, many people won’t be clicking exactly the same boxes as last year.
Last year during open enrollment — typically in October and November — people spent an average of six extra minutes making decisions, according to Aon data. And that’s likely to hold steady or increase this year. A recent study by Voya Financial found that due to inflationary pressures, 70% of employees plan to spend more time reviewing their benefit choices during open enrollment to help get the most out of their benefits dollars.
Many people make benefit decisions based on what they can afford, and inflation can change things, said Rob Grubka, CEO of Health Solutions for Voya Financial. “It’s hitting families’ wallets,” he said.
Here are five tips for navigating this year’s open enrollment season.
Expect to pay more for healthcare in 2022
Some companies are seeing insurers raise their health care premiums by 30% or 40%, according to Stacey Edgar, co-founder and CEO of Venteur, which helps employers choose health benefit offerings. Some employers will absorb these additional costs, but others will pass them on to employees, she said. This can either be through higher monthly premiums or increased out-of-pocket costs.
Employees paid about $4,412 for health insurance in 2022, up 2.6 percent from $4,302 in 2021, according to Aon. Much of this increase is due to increases in what employees pay out of pocket. Employees in 2022 paid $1,892 in out-of-pocket costs, up 5.2 percent from $1,798 in 2021, Aon said.
The pandemic and the labor market are playing a bigger role
There are too many options and intricacies to wade through the open enrollment process. That’s especially true now, as many companies have increased their benefits offerings in response to the pandemic and to attract and retain top talent amid a hiring crunch. It’s also important because with rising health care costs, even small changes in benefits can make a big difference in an individual’s or family’s finances.
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That’s especially true if something has changed about your health or that of a family member, Edgar said. Be sure, for example, to pay close attention to changes in the cost of co-pays, emergency room visits, hospitalizations and prescription drugs, all of which can add up. That advice applies equally to people who access a federal or state marketplace for health benefits, said Kristen Anderson, co-founder and CEO of Catch, a personal payroll and benefits product for the self-employed.
Consumers are encouraged to update their federal or state marketplace application beginning November 1 with their expected income and household information. They then have to compare their current plan with the one available for 2023 and select a suitable plan within the required timeframe. They must go through this process even if they chose the re-enrollment option and think they may want to keep the same plan for 2023, according to HealthCare.gov.
Watch for gaps in health coverage
Typically, when employees prepare for open enrollment, they spend most of their time focused on their primary workplace benefits: medical, dental and vision, according to Voya Financial. While these benefits are important, many workers often have gaps in their coverage.
Voluntary benefits offered by an employer can provide additional protection. These include hospital indemnity insurance, critical illness cover and accident insurance. These coverages are relatively inexpensive, typically costing less than $5 a week for employees, said Danny McCauley, senior vice president and head of client experience in the Aon Consumer Benefit Solutions team.
Employers may have added other perks to their lineup in an effort to attract and retain star employees. These include student loan repayment benefits and emergency savings support.
“Make sure you consider every benefit your employer offers,” McCauley said.
Don’t overlook group life insurance offered by your employer
Life insurance sales surged in 2021 as the pandemic made many people think about their own mortality. After record high policy sales growth in 2021, policy sales fell 9% in the first six months of 2022, according to industry research firm Limra. That likely reflects cautious spending cuts due to inflation and other factors, Limra said.
However, group life insurance can be important, especially for people with serious medical conditions who may not qualify for individual life insurance or who cannot afford the premiums of an individual policy. In many cases, group life does not require a medical exam, and the policy can be portable if an employee changes companies. Spouses or children may also be eligible.
Use the self-help tools available
McCauley recommends that employees take advantage of employer-provided resources designed to help them choose benefits. These can include webinars, built-in support tools and dedicated support professionals. There are also free resources on HealthCare.gov and the state marketplaces to help consumers with their health coverage decisions.
“This year it’s more about who is the right choice — not just a choice,” McCauley said.
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