Ahhh, temperatures are finally cooling off, the days are slowly getting shorter, and if you’re a pumpkin spice fan, you can find all sorts of pumpkin spice flavored and scented treats. Fall is definitely in the air, and for us in the health-insurance industry, that means one thing: it’s time for annual election and open enrollment!! As health insurance brokers serving both California and Arizona residents, LR-J Health Solutions, we are here to assist with the annual election period for Medicare clients, as well as help navigate employer-based health insurance options versus what’s available for individuals and families outside of the employer groups. Previously, we covered the basics about open enrollment and Medicare’s annual election period in our blog, “Let’s Be Prepared for 2021 Benefits Open Enrollment – LR-J Can Help,” but we’d like to dive a big deeper into why it’s important to closely review your options every year, and of course – how LR-J can help!
Navigating the Annual Election Period for Medicare
For clients on Medicare, the Medicare Annual Election Period (AEP) takes place between October 15 and December 7 every year. This allows Medicare beneficiaries to change Medicare Advantage or Medicare Prescription drug (Part D) coverage, and is a chance for all beneficiaries to explore their options. During this period, beneficiaries can drop their current Medicare Advantage plan in favor of another, revert to Original Medicare, opt to enroll in a Medicare Advantage Plan, add or change their Medicare Part D prescription drug coverage or purchase a Medicare Supplement Insurance plan.
What You Should Know About Medicare’s AEP
Every year, these plans experience policy and plan changes, and it’s important to look at your policy in comparison to other policies offered in your area. Like all things healthcare, Medicare can be complex, so it’s essential to have a clear understanding of all of the options available to make the best choice for your needs. From our experience, here are a couple of points to consider when it comes to Medicare’s Annual Election Period.
- This is the time to make changes to your plan. Many beneficiaries believe they can make changes to their plan anytime during the year, and that’s untrue (unless you qualify for a Special Enrollment Period (SEP) due to special circumstances. October 15 – December 7 is the annual window of opportunity to take advantage of to make changes to current Medicare coverage. This is also an opportunity to switch Part D (prescription drug) plans or add Part D coverage. It’s important to remember that you may receive a Part D late enrollment penalty if you didn’t enroll in Part D coverage when you became eligible for Medicare (within 3 months of your 65th birthday).
- There are so many different options! It’s a common misconception that all medicare plans are similar, and it’s not worth the hassle to explore the differences. However, there are many different types of Medicare plans, including: Medigap policies, Medicare Advantage plans, Programs of All-inclusive Care for the Elderly (PACE), and Medicare Cost Plans. Furthermore, even the Medicare Advantage plans have distinctions which include provider networks, prescriptions drug coverage, number of covered doctors, premiums and out-of-pocket costs. Some Medicare Advantage plans included added benefits bundled into the coverage, such as vision, hearing, fitness and dental benefits. Other plans don’t include those extras as an option, or they charge an additional fee to receive those benefits. If you don’t pay attention to the plans available in your area, you may end up paying more for the same coverage. Plans can change premiums, coinsurances, copayments and drug coverage each year. The plan you have currently may look very different in 2021.
If we’ve learned anything this year, it’s that it’s impossible to know what the future holds. However, if you foresee events such as changes in your prescription drug regime or surgery, choosing the right Medicare plan can help you save significantly on next year’s medical bills.
Understanding Employer-Based Health Insurance Options
Let’s begin with reviewing some of the basics of open enrollment season. Generally speaking, the open enrollment period for 2021, for individuals and families who are not covered by an employer, begins Sunday, November 1, 2020, and ends Tuesday, December 15, 2020. If you don’t enroll in a health insurance plan by the December 15 deadline, you won’t be able to get 2021 health coverage unless you qualify for a special enrollment period. Insurance plans purchased during open enrollment will take effect on January 1, 2021. In addition many employers offer an open enrollment in a similar time period which makes it a good time to compare.
Why Should I Review My Employer-Based Options?
Health insurance plans can be complex, and downright complicated and overwhelming to navigate. For many Americans lucky enough to be offered benefits from an employer, and that’s helpful in narrowing down the options. However, employees still have to make difficult decisions when it comes to their employer-based health insurance, but the problem is many people don’t spend the time or effort to really review the available plans, nor do they seek more affordable options outside of their employer! The stats show that most people just go with whatever they had previously – if it was good then, it’s gotta be good now, right? …. Wrong!
The world definitely changed this year, and going with whatever insurance options you had before isn’t going to cut it anymore. Check out these statistics from the 2020-2021 Aflac WorkForces Report regarding enrollment decisions amidst the pandemic (the survey captured responses from 1,2000 employees across various industries from June 8 – July 1, 2020):
- 92% of employees spend, on average, 33 minutes on selecting their benefits and choose the same benefits year after year!
- 33% of employees either do not feel confident or are unsure if their health benefits will protect them or their family in the event they are affected by COVID-19.
- Half of employees surveyed said the pandemic has been a wake-up call to invest more time researching and selecting the best coverage options for their situation.
- Six out of 10 employees believe their share of medical costs will increase in the next year.
- More than half (54%) of employees surveyed experienced some anxiety about health care costs that are not covered by their health insurance.
This year, because of COVID-19, it’s more important than ever to take a closer look at benefit options during this open enrollment season. Think about all that has changed this past year alone, and how much uncertainty still remains. Health insurance companies and employers (and all of us!) have had to adapt to the changes brought on by the pandemic, so it’s worth the time and effort to closely check out your options. If the thought of that overwhelms you, we get it! And we can help.
Should I Use My Workplace Health Insurance?
That’s a good question, especially now. Because of the pandemic, many Americans are out of a job, which means they no longer qualify for employer-based benefits. If you have been fortunate enough to remain employed and offered benefits, should you just go ahead and use them? Well, you should know that you aren’t legally required to opt-in to your employer plan, but it is typically in your best interest to do so. According to HealthCare.gov, your employer has to offer an “affordable” health insurance plan, which means a “job-based health plan covering only the employee that costs 9.78% or less of the employee’s household income.” If it meets that threshold, you won’t be eligible for a premium tax credit even if you do shop on your own. That means you’re footing the entire bill, and you can’t get any help in the form of subsidies.
However, it might be a good idea to still shop around! In the very least, compare the benefits offered by your employer to outside plans, and let LR-J help! Questions to consider:
- Is the contribution you’re expected to make too high?
- Is the medication you need included in the plans?
- Is the dependent care too expensive?
- What is the cost for carrying your family members, such as your spouse or children?
There’s significant benefits to having a professional health insurance broker like LR-J help you review your employer-based plans, and to explore other options when your plan won’t cut it! You’ll need to thoroughly understand what types of plans are being offered. HMOs (health maintenance organizations) have strict networks and require referrals to see specialists; PPOs (preferred provider organizations) don’t require referrals and allow you to go outside of your network, for a higher cost; and EPOs (exclusive provider organizations) have a tight network, like an HMO, but don’t require referrals. Confused yet? Yeah.. if we weren’t expert brokers with years of experience, we would be too.
In addition to knowing what plans you’re being offered, there are other things to consider too:
- Do you get dental and vision, too? If so, is it included or are they standalone plans? How much is the employee contribution?
- Is a wellness program offered? If so, how does it affect your premium? Are you “rewarded” with a discount for staying healthy within the wellness program’s parameters, or penalized by having a higher premium for not enrolling in the wellness program and staying within its parameters for “being healthy?”
- Does your employer offer FSAs (flexible spending accounts) and/or HRAs (health reimbursement accounts), which offer additional benefits to help healthcare more affordable?
LR-J Can Help You Better Understand Your Options
Having a conversation with Laura Ritchie-Johnson of LR-J Health Solutions doesn’t necessarily mean you’ll change your plan or benefits, but rather that you’re open to the idea that there may be something better available for you and your family. In a time of uncertainty amidst a global pandemic, reviewing your healthcare with a dedicated, experienced broker can not only save you money, but can provide you with peace of mind – and that is priceless.