Don’t be surprised if you spend more time this year picking health-care benefits during open enrollment season.
Between rising inflation, policy-specific changes and employees wanting more health-care services, many people won’t be clicking the exact same boxes as last year.
Last year during open enrollment — generally in the October and November timeframe — people spent an average of six additional minutes on their decision-making, according to Aon data. And that’s likely to hold steady or increase this year. A recent survey from Voya Financial found that, due to inflationary pressures, 70% of employed individuals plan to spend more time reviewing their benefit selections during open enrollment to help make the most of their benefit dollars.
Many people make decisions about benefits based on what they can afford, and inflation could be a game-changer, said Rob Grubka, chief executive of Health Solutions for Voya Financial. “It’s hitting the wallets of families,” he said.
Here are five tips for navigating this year’s open enrollment season.
Expect to pay more for health care in 2022
Some companies are seeing insurers raise their health-care premiums by 30% or 40%, according to Stacy Edgar, co-founder and chief executive of Venteur, which helps employers choose health benefit offerings. Some employers will absorb this extra cost, but others will pass it down to employees, she said. This could either be in higher monthly premiums, or through elevated out-of-pocket costs.
Employees in 2022 are contributing about $4,412 for health care coverage, up 2.6% from $4,302 in 2021, according to Aon. Much of this increase is due to increases in what employees are paying out-of-pocket. Employees in 2022 are paying $1,892 in out-of-pocket costs, up 5.2% from $1,798 in 2021, Aon said.
Pandemic and labor market play bigger roles
There are too many options and intricacies to fly through the open enrollment process. This is 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 the rising cost of health care, even small benefits changes can make a meaningful difference in an individual or family’s finances.
This is particularly true if something has changed with respect to your health or that of a family member’s, Edgar said. Be sure, for instance, to pay special attention to changes in the cost of co-pays, emergency room visits, hospitalization and prescription drugs, all of which can add up. This advice applies equally to people who are accessing a federal or state marketplace for health-care benefits, said Kristen Anderson, co-founder and chief executive of Catch, a personal payroll and benefits product for the self-employed.
It’s advisable for consumers to update their federal or state marketplace application, starting on Nov.1, with their expected income and household information. They should then compare their current plan to what’s available for 2023 and select an appropriate plan within the required timeframe. They should go through this process, even if they have selected the re-enrollment option and they think they might 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 core 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 through an employer can provide additional protection. These include hospital indemnity insurance, critical illness coverage and accident insurance. These coverages are relatively inexpensive, generally costing less than $5 a week for employees, said Dani McCauley, senior vice president and customer experience leader for Aon’s Consumer Benefit Solutions team.
Employers may have added other benefits to their line-up in an effort to attract and retain star employees. These include student loan repayment benefits and emergency savings support.
“Make sure you’re considering every benefit your employer is offering,” McCauley said.
Don’t overlook employer-offered group life insurance
Life insurance sales soared in 2021, as the pandemic caused many people to reflect on their own mortality. After record-high policy sales growth in 2021, sales of policies have dropped 9% in the first six months of 2022, according to industry research firm Limra. This likely reflects cautionary spending reductions due to inflation and other factors, Limra said.
Group life insurance, however, could be important, especially for people with serious medical conditions who may not qualify for individual life insurance or who can’t afford the premiums on an individual policy. In many cases, group life doesn’t require a medical exam, and the policy may be portable if an employee changes companies. Spouses or children may also be eligible.
Use available self-help tools
McCauley recommends employees take advantage of employer-offered resources designed to help them pick benefits. These can include webinars, embedded support tools and dedicated benefits professionals. There are also free resources on HealthCare.gov and state-run marketplaces to help consumers with their healthcare coverage decisions.
“This year is more about what’s the right choice — not just a choice,” McCauley said.
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