Like nearly everything else in 2020, choosing health benefits during this fall’s open enrollment period will not be easy for people who receive their health benefits from work.
Amid a pandemic-induced recession, plenty of working Americans are looking for ways to save money on their health costs. But choosing the right coverage will take time, because to make that right choice, employees have to contend with a few obstacles. As do their employers.
This is the first open enrollment period in which the dual impact of COVID-19 and recession will undoubtedly affect decision-making for all involved.
What kind of obstacles? For employees, it’s the possibility of losing their job. As of September 2020, 12.6 million people were unemployed in the US, The unemployment rate is 7.9%, according to the Bureau of Labor Statistics. As COVID-related unemployment continues to increase, the possibility of joblessness looms.
The question they face is, to afford health care, how do they make compromises that don’t cause too much financial pain?
For employers, their obstacle is nothing new: Health care costs are going up. Mercer’s National Survey of Employer-Sponsored Health Plans 2020 reports that employers expect to pay 4.4% more for health benefits, on average, in 2021 than in 2020.
That increase impacts a significant number of employees. According to America’s Health Insurance Plans (AHIP), 180 million Americans are covered by an employer-based health plan. That, said the Kaiser Family Foundation, represents 49% of the country’s total population.
Much of that population is now working from home and trying to select health benefits remotely. That creates an atmosphere ripe for confusion, particularly when employees are already considering complex healthcare benefit options.
“Remote work has fueled a disconnect between employers and employees leading up to open enrollment,” said Brian O’Connell, an analyst with InsuranceQuotes.com.
That disconnect may have long-term implications, said Misty Guinn, director of benefits and wellness for Benefitfocus.com, as people put off routine health care.
“There’s an offset of deferred care – there were surgeries that were delayed or canceled, and people aren’t going to the doctor as much to get their preventative screenings.” Those decisions could cause ripple effects on health care costs in 2021, said Ms. Guinn.
Finding workable options
Yet, smart health plan decisions made now could establish a much-needed financial cushion to offset any future costs. Ms. Guinn said high-deductible health plans (HDHP) could be a viable option. “One of the best things about offering a HDHP is the ability to have a health savings account (HSA).”
A health savings account allows participants to set aside funds for healthcare costs associated with a high deductible plan.. HSAs, said Ms. Guinn, come with another benefit – they can act as a reserve for future medical expenses, particularly for those employees thinking of retirement.
“Because it’s tax-free, you’re reducing your taxable income,” she said. “But those funds roll over year over year. So you can build up a medical retirement bank.”
For more cost savings, employees should consider another option that already exists on nearly all employer-sponsored plans: telehealth.
Jeanette Thornton, senior vice president of product, employer and commercial policy at AHIP, or America’s Health Insurance Plans, said during the pandemic many people have turned to telehealth services.
“Most plans offer telehealth benefits today,” she said in AHIP’s recent webinar, Open Enrollment 2021: Emerging Trends in the Individual Market. “So for people who have not been able to visit their provider in person, for some very good reasons, having that access to care virtually is critical.”
Telehealth is also an option for consumers looking to keep more of their deductible dollars. Telehealth visits are often cheaper: According to a Kaiser Health News article, the average cost of a telehealth visit is $79 dollars, compared to $146 for a traditional office visit.
In general, employees should not assume the status quo is the best option, said Kim Buckey, vice president of client services for DirectPath, a health care consultancy for employers and employees. “For those enrollees who are employed, there may be new options available and changes to cost-sharing, so it’s important to review enrollment materials carefully and make use of any assistance your employer might offer,” she said.
Talking with one’s employer can help an employee understand what is available, said the analyst Mr. O’Connell. “Employees should ask employers about their base-level healthcare insurance options. Once the employee reviews the[m] … add-on health insurance policy features can be discussed.”
Plans and options could well have changed from the last open enrollment period, said Ms. Buckey. “We’re seeing more and more clients offering low-cost, voluntary plans.” These include: hospital indemnity plans, which cover any hospital costs not covered by the employee’s existing insurance; critical illness insurance; accident insurance, and; co-called buy-up disability coverage, which is jointly paid by employer and employee. These coverages can offer an additional level of financial protection to employees who become ill or injured.
She added, “Many of these plans provide a lump-sum benefit that can be used for any purpose—to cover health care expenses or to pay rent, tuition or grocery bills.”
Even benefit options sometimes overlooked by employees are getting renewed attention, and with good reason. Many more employees are now interested in life and disability insurance, said Mr. O’Connell. Likewise, more workers are looking at the mental health and wellness programs in their employer-sponsored programs, which are mandates of the Affordable Care Act. As the mental impact of COVID-19 bears down on employees and their families, such services become essential, said Mr. O’Connell. “Increasingly, many workers are now prepared to pay up for health insurance policies that include a mental healthcare wellness component.”
Mental health services are available in a telehealth setting, said Ms. Guinn.
Remote open enrollment success
Employees would be wise to review their benefits plans, as COVID-19 continues to affect businesses, said Ms. Guinn. “I always encourage people, even if you’re not forced to log in and re-enroll in your benefits each year, to take advantage of open enrollment is your time to go in and do a financial checkup. I encourage people to ask themselves, when they’re looking at different medical plan options: How much coverage do I need?”
Another question to ask, she added, is how much one pays for doctor visits. “Would I rather pay more in a premium out of my paycheck and know that I’m going to pay less at the doctor’s? Or do I want to save in premiums and not pay as much out of my paycheck?”
Ms. Buckey agreed. “The right plan for you will depend in large part on how often you and your covered family members need health care, how many prescriptions your family fills each month, and your ability to cover unexpected health care expenses.”
By examining all costs and plan options available, Ms. Buckey said, employees can make better decisions that help them save money. Seek advice from a benefits administrator or human resources director, and make use of enrollment support tools.
“Finally, if seeing your current doctor(s) is important to you, check to make sure your providers participate in the plan option you are considering—and that they’re still in business,” she said. “Due to the pandemic shutdown earlier in the year, many providers opted to sell their practices or retire early, and many smaller hospitals have been absorbed into larger health systems. Don’t wait until you need care to find out you need a new provider.”
Lori Widmer writes about insurance and risk management for trade and business magazines.