It's Open Enrollment Time—Here's How You Can Make the Most of Your Benefit Options for a More Protected 2021

Pick early

First and foremost, find out when your open enrollment period is. For those using a marketplace health insurance plan, open enrollment 2021 opens November 1, 2020, and closes December 15. For those covered by their employer, most open enrollment periods open in late October or early November and close in mid-November. Don't just look at when open enrollment ends: This is not the time to be picking your healthcare haphazardly at the last-minute. But make sure you do pick some sort of coverage—if you don't sign up for healthcare during open enrollment, in most cases, it will be very difficult to get coverage until 2022.

Once you know when open enrollment is, start researching and asking questions. Most employers will offer webinars or Q&A sessions to go over the benefit offerings for the coming year. Read up on what's available to you, put together a list of questions or clarifications you need to make a good decision, and take advantage of any opportunity to get answers.

Young, healthy people, in particular, haven't always put a lot of thought into picking healthcare, says Lina Alvarez, a financial representative at Northwestern Mutual. This year, people who didn't think carefully picking their benefits was important are realizing that it's important to have insurance in place to cover the unexpected. "It's important to find a plan for the person who goes [to the doctor] once in a blue moon," Alvarez says. Otherwise, you could find that your coverage isn't enough at the worst possible moment, when you really need it.

To make a responsible decision, "people have to understand what their employer is offering," Zielke says. To do that, you need to be proactive about seeking information and asking questions specific to you and your family before you make a decision. Don't be afraid to ask specific questions to get the answers you need, and give yourself plenty of time to consider your options.

Think about your plans for 2021

Zielke says to ask, "What does 2021 look like for [you] or for your family?" Are you planning to have—or already expecting—a baby in 2021? Is your child on track to get braces, or is there an elective surgery your doctor recommends? If you already know you will have certain medical costs next year, make sure the health plan you pick will cover them. And plan for the unexpected, too. There may be surprise costs you weren't expecting, and extra coverage can help reduce the financial burden.

Zielke says the average family incurs more than $4,500 in medical costs each year, and if you're already feeling some financial strain from the pandemic, you'll want to do anything you can to reduce that medical spending for your family.

Talk to your spouse, too, Alvarez says. If they are also covered by their employer, compare offerings to pick the best option, and if you have kids, make sure they're covered by a plan that's suited to the falls, breaks, and other injuries that come with childhood. (You can even consider both enrolling, so the family has dual coverage with two policies instead of one.)

While you're looking ahead, look at the previous year, too. There's value in tracking your out-of-pocket medical costs, Alvarez says. If you spent more than you'd like on medical care this year, consider a lower deductible (with a higher premium but lower out-of-pocket costs) for next year. Considering how your plan for 2020 did or did not work well for your family's needs can help you pick a better plan for 2021.

Consider the costs

It's tempting, but don't pick a plan simply because it's the least expensive. "People tend to just go to whatever's the cheapest," Alvarez says. Instead, ask more questions and consider the implications of that low-cost plan.

Pay attention to what plans cover and what you get for the premium, because health insurance is much more than the premium you pay every month or that's taken out of every paycheck.

"Any year, [people] should know what the premiums are, what the deductibles mean to them, what co-pays are, and what coverages are in the plan that are not an additional cost," Alvarez says.

Research or ask about what (if any) doctors' visits are free, and know the details of what that enticing low-premium plan will cost you out-of-pocket. That low-cost plan may mean you pay much more than you'd like out-of-pocket if and when a medical emergency arises. Do the math with the premium, deductible, maximum out-of-pocket cost, number of visits allowed, and more to find out what makes the most financial sense for your family's needs and your risk comfort level. Many benefit enrollment sites will have a calculator, Zielke says, to help make the math a little easier.

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Pay attention to HSA or FSA availability

A health savings account or HSA is a triple tax-advantaged account that can help lower your medical costs. A flexible spending account or FSA can do the same thing, but with more restrictions. Both have certain limitations, but you should be aware of which is available with your preferred plan and take steps to take full advantage of the savings opportunities. Picking an HSA vs. an FSA shouldn't be your priority, but knowing which type of account comes with your preferred plan is important.

If you do pick a high deductible health plan (or HDHP) and it doesn't come with an HSA, you may be eligible to set one up yourself. Smart insurance apps and services make getting a non-employer-based HSA (and other features) easier than ever. Just make sure you do set up (and use) an HSA if you are eligible with your HDHP, Zielke says. HSAs are portable, they rollover year after year, and they can be used for retirement savings if they're not used before then. If you can get one, take full advantage of its many benefits.

Your employer may also offer a dependent care FSA or another useful account. Research what's available and use whatever you can—in many cases, you can only make elections to fund these accounts during open enrollment, so take the time now to do so.

Research specialist healthcare options

2020 helped us all realize the many benefits of telehealth, and it's likely that virtual visits whenever possible will be common in 2021, too. With that in mind, it's important to learn more about telehealth and accessibility to virtual healthcare, Alvarez says. If a plan has no telehealth coverage or offerings, consider a different one.

Also ask about mental health support. The pandemic has brought out new needs for mental health support for people of all ages, Alvarez says, so look into how your preferred plan or provider covers mental health services. Some employers or providers have a mental health hotline or virtual counselors, while others may cover mental health services, such as therapist appointments. If you already see a therapist or counselor or you would like to in 2021, make sure to sign up for a healthcare plan that will cover that.

The same is true for any specialist you see. Whether you see a chiropractor or have a preexisting condition, you want to make sure your plan offers everything you need at a cost you're comfortable with.

Look into supplemental benefits

There's more to open enrollment than just picking a healthcare plan. Many employers offer supplemental benefits, Zielke says, such as coverage for hospital indemnity, critical illness, accident insurance, or even life insurance. These extra benefits can be invaluable if catastrophe strikes, and they can often be added on to your total benefits package at a low cost. They can only be chosen during open enrollment, though, so take the time to consider your options.

If you're interested in enhancing your healthcare, first look into what your employer offers. Supplemental benefit offerings will vary widely from employer to employer, but if you'd like a particular coverage that your employer doesn't offer (or if you don't have employer-provided healthcare), you may be able to get it from an outside party.

Once you know what's available to you, figure out what these benefits cover, how you can use the coverage, and what it will cost you. (Your employer or the provider will probably have plenty of resources for you.) If there's a supplemental benefit well-suit to your family's needs and the cost is tolerable, it may be worth adding on—again, "if COVID-19 has taught us anything, it's really to be prepared for the unexpected," Zielke says.