With Open Enrollment in full swing, your employees likely have questions about how to choose the right plan for their specific needs. In our “Help Me Pick My Plan” series, we break down what they should look for in some of the most common scenarios. Feel free to send them a link to this post or use the information in it to help guide them.
When I turned 26 earlier this year, I signed up for health insurance at my company, but I didn’t end up going to the doctor at all. For Open Enrollment this year, our HR team said that we switched to an Individual Coverage Health Reimbursement Arrangement (ICHRA) and have a ton of options for plans. I started looking through them, but a lot of them seem expensive, and I want to make more progress on my student loan payments this year. I’m thinking of just taking a year off from having health insurance so I can save more money. Is there something I’m missing?
Healthy in Houston
Not to sound like your parents or any other older person in your life, but here we go: Yes, you need health insurance! In a country where 100 million people are saddled with medical debt, it’s just not worth the risk to go without coverage. That being said, we also understand why you don’t want a significant chunk of your hard-earned paycheck going to a service you rarely use. As your HR team said, with an ICHRA, you have a lot of options, so you can search for a plan that fits your budget. Here’s how Kevin Scott, SureCo’s lead Employee Experience Specialist, recommends getting started:
Step #1: Understand the costs you’ll be responsible for.
First, because you’re relatively new to the world of health insurance, let’s go over a few key terms you’ll come across in your search:
- Premium: This is the amount of money you’ll pay for your plan every month. Your premium payments do not count toward your deductible or go toward your out-of-pocket maximum (read on for definitions of these terms).
- Deductible: The amount of money you’ll pay before your insurance starts covering some or all costs.
- Coinsurance: The portion of your healthcare costs you’re required to pay after hitting your deductible. For example, with 20% coinsurance, you pay 20% of the total bill and your plan pays 80%.
- Out-of-pocket maximum: The total amount you’ll pay for covered services before your plan starts covering 100% of costs.
As you start your search, you’ll see that plans are divided into tiers: Bronze, Silver, Gold, and Platinum. For a healthy person without any ongoing health concerns, Scott recommends checking out Bronze plans, which tend to have the lowest premiums. While deductibles are usually on the high side for these plans, all of them cover a yearly physical, so you’ll at least be able to go in and get age-appropriate tests done annually. Some plans may waive your deductible for one or two additional appointments, too. Even if you’re feeling great, preventive care is always a good idea, especially if it’s not going to cost you anything extra, Scott says.
Step 2: Know your plan types.
Time for another vocab quiz! Once you start digging into your plan options, you’ll encounter several different acronyms that refer to plan and network types. Here are the main ones to know:
- Health Maintenance Organization (HMO): These are typically the lowest-cost plan types. An HMO requires you to choose a primary care physician, who you’ll need to ask for a referral if you want to see a specialist. HMOs require you to use doctors in their network.
- Exclusive Provider Organization (EPO): EPOs also only cover in-network care, but their networks tend to be larger. If you travel regularly to different parts of the country, an EPO could be a good way to have more options while keeping your premium low.
- Preferred Provider Organization (PPO): With a PPO, you can see in and out-of-network primary care physicians and specialists without a referral. These plans tend to have the highest premiums.
- High Deductible Health Plan (HDHP): An HDHP can be an HMO, EPO, or PPO. The main feature of these plans is — maybe you guessed it! — a high deductible. For most care you receive, you’ll pay the total negotiated cost until you meet your deductible, at which point your plan will start to pay for a portion of costs or all costs, depending on your coinsurance.
No matter what plan type you choose, take a look at its provider directory to make sure there are local physicians in your area so you can take advantage of your annual physical.
If you work a remote job or have big travel plans (National parks tour? Five friends all getting married this summer?) you may want to find a plan with coverage outside your area. Choosing a plan with out-of-network coverage is an option, but Scott recommends reading the fine print. A plan may offer some out-of-network coverage, but only once you reach a significant deductible or out-of-pocket maximum. Choosing a plan with a larger national network may be a better option.
Step 3: Get health insurance!
We know we mentioned this already, but it’s worth repeating. “Listen to Mom and Dad,” Scott advises. Even if you choose a plan with a high out-of-pocket maximum, if something happens and you require serious medical care, a $15,000 bill is much better than a $100,000 bill, Scott says. Let’s say you get in a car accident or a TikTok challenge with friends goes wrong: After one day in the ICU, you will have hit your out-of-pocket maximum, and your health plan will cover 100% of the rest of your care.
When looking for a health plan that fits your budget — but is there for you if you need it — take a look at:
- How much does the plan cost each pay period or month? What would be your total costs for the year?
- What care will your plan cover before you meet your deductible?
- Does your plan have providers in your area? What about places you’re planning to travel this year?
Life can be expensive, especially if you’re trying to meet financial goals like paying down student loans. With an ICHRA, you can search for a plan that fits your budget while protecting yourself from healthcare bills that could seriously throw off your finances for years to come.