The Smarter Consumer

Health insurance is one of the most important types of protection to have, to shield you from the perils of emergency and sickness.

While having health insurance is undoubtedly helpful in protecting your health and finances, it can be difficult, and even overwhelming to choose a plan. There are so many different plans and components to understand.

With the rollout of the Affordable Care Act ("Obama Care"), health insurance exchanges have been set up offering nearly all Americans the opportunity to view and purchase a health insurance plan that best meets their needs.

Open enrollment for these health insurance marketplaces typically begins at November 1 and persists until December 15. However, state health departments may make the decision to extend the enrollment period, further incenting those who need health insurance to buy it.

In this guide, we’ll be discussing the health insurance open enrollment process. Due to the complexities involved in buying a health insurance plan, this guide was developed to simplify open enrollment into easily understandable concepts.

What is Open Enrollment?

Open enrollment is the period when someone can sign up for health insurance since the Affordable Care Act passed.

Open Enrollment is your annual opportunity to reflect upon your benefit elections and make any needed changes for the upcoming year. During this period, you may add or remove eligible dependents, and alter your benefit elections, with most changes going into effect on January 1, 2018. Some states have extended the enrollment period, so you can expect to experience the new plan later on if you enroll at a later time.

When you apply for or renew your coverage this year, you may need to provide some information about you and your household. This may include:

Home and/or mailing addresses for everyone applying for coverage.
Information such as birth dates and Social Security numbers.
Document information for legal immigrants.
Information on how you file your taxes.
An estimate of your household income for the following year.
Policy numbers for any current health plans covering members of your household.

If you’re unsure what plan best fits your needs or how to apply/renew, it may be best to seek out a professional who can help you apply.

Why Does Open Enrollment Exist?

Putting aside critics of the Affordable Care Act and President Obama, the intention of open enrollment is to save individuals, businesses, and insurance companies from financial ruin.

Deadlines and open enrollment exist to incentivize individuals to keep an insurance plan, not risk being uninsured, and minimize switching between cheaper and expensive plans at the individual's convenience.

This way, the system can be safeguarded from those wanting to exploit it. Imagine this: a healthy person is uninsured but gets sick. The individual signs up for an expensive plan and pays for it as long as it covers the expensive medical costs. Then upon feeling better, the individual switches to a cheaper plan with fewer benefits or drops coverage entirely.

Sounds like a sensible plan right? The problem is that if everyone did this, every insurance company would be a sucker.

On the other hand, the common folk would suffer too. Everyone who gets insurance would see insurance premiums rise. How else would insurance companies pay for everyone's expensive treatments if everyone switched to cheaper plans or dropped coverage at their convenience?

Who Needs to Use Open Enrollment?

Simply put, everyone needs to use open enrollment for health insurance, as described above. It’s a means to protect insurance companies and individuals from being screwed.

The most common avenue of health insurance is through your job—it’s a common incentive employers use. If you don’t have coverage through a job, Medicare, CHIP, or other qualifying coverage, you are required to get coverage through the Marketplace, the health insurance exchanges I mentioned earlier.

Unsurprisingly, the health needs of you and your dependents may change from year to year. Compounded by changing financial health and lifestyle, we need a health insurance program tailored to our specific needs. Open enrollment is the annual opportunity to get a different type of plan that’s a better fit for you.

When Should I Enroll?

In order to meet the open enrollment deadline, it’s best to prepare beforehand.

First, figure out when your plan’s renewal period is. That’s the perfect time to conduct an audit of your current plan. When you figure out what is and isn’t working, you can then go ahead and calibrate so you’ll be ready for open enrollment.

During your renewal period, consider these questions:

Has your medical, dental, and/or vision plan changed? If so, is the change positive?
Have your employees’ needs changed? For example, do you have more families on your team? If that’s the case, what other benefits would help them out?
Is your team satisfied with your current offering? If you don’t know off the bat, an anonymous employee survey will help you get a sense of how people are feeling.