Open enrollment looks different this year: Here's what employees should consider

Open enrollment is less than a month away and it’s no secret that this year will be different. We continue to grapple with a pandemic, high levels of unemployment, and general emotional stress. There is no timeline for when we will get back to normal. But, employees can still plan for health care costs and health care coverage this year, and maybe even get a year ahead.

Regardless of your financial situation, no one can afford to lose health insurance. In the midst of it all, employees have to make a decision about their health insurance options and are looking for guidance, ways to save, and how to get the coverage that is right for them.

What factors should employees be considering with the approaching open enrollment deadline?

Health care cost deferrals

Does it feel like you haven’t left your house in the last 6 months? It’s not just you – consumer behaviors have changed. This includes routine doctor’s visits. You can see these costs decrease across the board:

●        Routine health care visits declined as much as 60%, and now are still at 30% below 2019 level. Even with increases in telemedicine usage, the number of Americans postponing preventive and in-office visits is at an all-time high.

●        There was a 66% decline in dental usage. In fact 3 of out 4 visits are for emergency services. It’s not just medical visits that declined; related benefits services like dental are also on the decline, as expected with a change in consumer behavior from COVID-19.

To put this in perspective, 50% of all Americans now fear bankruptcy due to a major health event. The same Gallup study also showed that 25% of Americans must borrow money for a $500 medical bill. Health care has always been a top concern for Americans. The reality is even more stark today.

What you might not know is that COVID-19 has created positive long-term health care changes. For example, remote care obtained from medical and mental health professionals has become a go-to service for many due to COVID-19. With the passage of the CARES Act, these appointments are pre-deductible and the cost of service can now be paid with HSAs.

This is not to suggest that you should decline coverage in your open enrollment election, but it does require a new outlook in how you select and value health care coverage and costs. It’s more true that your health care coverage and cost has changed from last year to this year, even if you select the same plan.

Alarming health care premiums

Health care premiums will rise in 2020, but how much is still unknown. The fear of unknown COVID-19-related costs are driving increased premium costs in 2020 for employers and employees, even though health care costs are down overall for 2020 for the industry.

It is likely that for most employers’ and employees’ premium costs will increase from mid-single digits to low double digits for most employees. Families can expect a slightly higher increase. The biggest challenge this year for both employers and employees is trying to maintain coverage. It seems to be becoming unmanageable even to maintain the status quo. Whether this will be a single year cost anomaly or a permanent shift remains to be seen.

Regardless of where we land, health care premium cost increases will continue to be the lead concern for employers and employees alike.

In times of uncertainty, it couldn’t be more important to reevaluate how to construct cost-effective and personalized health care offerings. It’s time to think about both benefits for 2021 and 2022. Getting ahead is now a cost mandate.

Planning 13 months ahead

Can you really get ahead of health care spending in 18 minutes? That is the average time employees take each year to select their benefits selections during open enrollment.

The expected result is employees being under-prepared for health care expenses. However, another common result is overpaying for health care coverage you don’t need.

What might be an unexpected result for most Americans is that they are overpaying for health care coverage that they aren’t using. It’s an odd juxtaposition in the case of a catastrophic pandemic.

Here is how employees should better prepare for health care coverage this year:

Scenario planning (calculate your expenses): This year might be an anomaly, but it presents a great opportunity to compare health care costs year over year. This will help you understand your predicted expenses and possible COVID-19 cost fluctuations. Take pen to paper, use Excel or find a health care costs calculator to get started.

Personalize your health care benefits: There is no ‘one size fits all’ benefits plan. Review your plan offering and find the plan that fits your lifestyle the best. Combine benefits offerings and health savings options to create the most-cost effective plan for you.

Think 13 months ahead: In this case 13 is a lucky number. Planning only for next year will get you stuck into the same round-robin you are stuck in this year. It’s time to get ahead. Consider enrolling in an HSA-eligible health plan, so you can actively contribute to a health savings account (HSA). Build a long-term nest egg for your health costs. By planning a year ahead, you can start to bridge the gap for health costs in retirement and rethink your approach to health benefits.

There is never enough time. Getting the most out of open enrollment this year will mean more savings and coverage for the year to come.

While this preparation and review process can be tedious at times, the benefits gained will be there for you (and your family) when you need it most.

Use open enrollment to create the personalized benefits plan that fits your budget and needs. A 13-month health benefits strategy will solve the problem, not just for this year, but also for the years after.

Shobin Uralil is chief operating officer and co-founder of Lively, a health savings account provider.