Don’t be surprised if you spend more time choosing health benefits this year during open enrollment season.
Regardless of rising inflation, policy changes, and employees wanting more health care, many people won’t be clicking exactly the same boxes as last year.
Last year during open enrollment — typically the October and November timeframe — people spent an average of six extra minutes on their decisions, according to Aon. And that’s likely to stay the same or increase this year. A recent survey by Voya Financial found that due to inflationary pressures, 70% of working individuals plan to spend more time reviewing benefit options during open enrollment to get the most out of their benefit money.
Many people decide on benefits based on what they can afford, and inflation could be a game-changer, 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%, says Stacy Edgar, co-founder and CEO of Venteur, a company that helps employers choose health benefits offerings. Some employers will absorb these additional costs, while others will pass them on to employees, she said. This can either be in higher monthly premiums or higher out-of-pocket costs.
Employees will contribute about $4,412 to healthcare in 2022, up 2.6% from $4,302 in 2021, according to Aon. Much of this increase is due to an increase in what employees pay out of pocket. Employees pay $1,892 in out-of-pocket costs in 2022, up 5.2% from $1,798 in 2021, Aon said.
The pandemic and the labor market play a bigger role
There are too many options and complexities 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 during the hiring crunch. It is also important because, with the rising costs of health care, even small changes in benefits can significantly change the financial situation of an individual or family.
This is especially true if something has changed in your health or the health of a family member, Edgar said. For example, be sure to pay special attention to changes in the cost of co-pays, emergency room visits, hospitalizations, and prescription drugs, which can add up. That advice applies equally to people accessing the 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 with expected income and household information beginning Nov. 1. They must then compare their current plan with what is available for 2023 and select the appropriate plan within the required time frame. They should go through this process even if they chose the re-enrollment option and think they might want to keep the same plan for 2023, according to HealthCare.gov.
Be aware of health insurance gaps
Typically, when employees prepare for open enrollment, they spend most of their time focused on their core workplace strengths: health, dental and vision, according to Voya Financial. While these benefits are important, many workers often have gaps in coverage.
Voluntary benefits offered by an employer can provide additional protection. This includes hospital indemnity insurance, critical illness cover and accident insurance. These coverages are relatively inexpensive, typically costing less than $5 a week for employees, said Dani McCauley, senior vice president and head of customer experience for Aon’s Consumer Benefit Solutions group.
Employers may have added other perks to their lineup to attract and retain star employees. These include student loan repayment benefits and essential savings support.
“Make sure you consider all the benefits your employer offers,” McCauley said.
Don’t overlook employer-provided group life insurance
Life insurance sales surged in 2021 as the pandemic prompted many people to think about their own mortality. After record high growth in policy sales in 2021, policy sales fell 9% in the first six months of 2022, according to industry research firm Limra. This likely reflects cautious spending cuts 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 cannot afford the premiums on an individual policy. In many cases, group life does not require a medical exam and the policy can be transferable if the employee changes companies. Spouses or children may also be eligible.
Use the self-help tools available
McCauley recommends that employees take advantage of resources offered by employers to help them choose benefits. These can include webinars, embedded support tools and dedicated benefits experts. HealthCare.gov and state marketplaces also offer free resources to help consumers make health care decisions.
“This year it’s more about what’s the right choice — not just the choice,” McCauley said.
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