Why Open Enrollment Is the Perfect Time to Change Your Health Insurance Plan
Open enrollment is here – which means you have only until December 15 to make changes to your health insurance. During open enrollment, you get the once-a-year chance to sign up for cheaper coverage, reduce your monthly premium, and reassess your plan.
Whether you have an insurance plan you like or it’s your first time enrolling in a plan, you need to take action during open enrollment. The changes you make now will shape your health insurance for the next year, meaning open enrollment is your only opportunity to save significantly.
Here’s why you should consider making changes or updates to your health insurance right now.
You Can Choose a Cheaper Plan
The biggest benefit the annual open enrollment period offers is the chance to switch your health insurance plan. If you’ve been struggling to pay your monthly premium, realized you’re paying for coverage you don’t actually use or need, or don’t want to pay the price increase expected for next year, you can make a change. All you need to do is take action during open enrollment.
From October to December, you’re able to browse a wide selection of different health insurance plans available in your area in every price range. You can select the level of coverage you need – typically ranked as silver, gold, and platinum – as well as pick between HMO and PPO plans. You can also compare monthly premium prices and annual deductibles.
You aren’t limited to your current plan or even your current insurance company during open enrollment. You have the freedom to switch to any plan you’d like – and you can potentially shave hundreds of dollars off your premium and deductible by switching plans.
You Can Shop On or Off the Healthcare Exchange
Another benefit that isn’t available year-round is the opportunity to shop the healthcare exchange and discuss options with insurance brokers. Because you cannot change your health insurance during the rest of the year unless you have a qualifying life event, open enrollment is the only time you can shop around.
On the healthcare exchange, you’ll find every plan available through the Affordable Care Act offered in your local area. The exchange allows you to easily compare the premiums, deductibles, and coverage levels of different plans – and all of these plans offer subsidies, if you qualify for them. It’s the perfect place to find a budget-friendly plan, especially if you’re in need of a discounted plan.
Additionally, you can shop beyond the exchange and look at insurance plans from insurance brokers. Brokers negotiate plans and options directly with insurance companies, and Consumer Reports notes that you can often get an even better deal when you work with a broker. You can use your broker to negotiate lower monthly premiums, compare offers from different companies, and delve into the details of coverage.
But, once open enrollment ends, you won’t be able to shop around. Subsidized plans that allow you to save significantly on health insurance are only available during open enrollment, so you don’t want to miss the only chance you have to find a better, cheaper plan.
You Can Slash Your Premiums with Updated Income Information
The key to getting cheap health insurance is to meet the subsidy requirement. If you fall into the income category for subsidies, you can see a deep discount in your monthly premium.
And during open enrollment, you can make adjustments to your annual income. Since you filed taxes in the spring, you’ll have a better idea of what your salary is when adjusted – meaning deductions, self-employment, and other expenses can lower your income and help you qualify for cheaper insurance.
As long as your modified adjusted gross income is $48,240 or less ($64,960 or $98,400 for families of two and four respectively), you qualify for subsidized insurance plans. This means you could pay under $100 a month.
To adjust your income and potentially qualify for cheaper premiums and plans, take a look at your take-home income. Are there any deductions you can take to reduce your income, like business expenses, a new car, or other investments? Sometimes, you can even deduct your health insurance costs from the previous year, which will help you decrease your total income significantly.
You Can Opt Into an HSA
If you need a pricer health insurance plan to cover all of your health needs and help offset expenses, you can use the open enrollment period to save money by opting into an HSA. Before the new year begins, you can put aside money in an HSA that you’ll be able to use over the next 12 months for any non-insurance covered healthcare.
An HSA, or health savings account, lets you put up to $3,450 into a special account that isn’t taxed. You can then use the money in this account for any of your health expenses, from copays to dental and vision needs to medical procedures and labs.
There’s a big benefit to an HSA: the money you put into this special account is deducted directly from your annual income, meaning it can lower your modified adjusted gross income and potentially help you qualify for a subsidy.