The annual open enrollment period is underway in some companies and soon will be in others. The federal government’s open enrollment period begins November 1.
As a reminder, open enrollment is the period each year when employees must decide on their benefits packages for the following calendar year based on what employers offer.
For the second year in a row, open enrollment will occur against the backdrop of the COVID-19 pandemic.
While some parts of life are back to normal, COVID remains a threat to our collective health. That means it may impact the open enrollment decisions you make for health insurance and other employer-provided benefits.
The impact can likely be summed up with a single word: more. As in, the continued presence of COVID-19 may entice you to sign up for more coverage than you have in the past.
Below is a list of options that perhaps you haven’t considered before but may want to with the pandemic still an issue.
How to buy “more” health insurance
Some employers offer multiple options for health insurance plans. Typically, the difference between these options is the size of the deductible. This is the amount you must pay out-of-pocket before full benefits kick in.
The lower your deductible, the higher your premium. With the threat of COVID still looming, some employees and users of the federal government’s health care exchanges may want to opt for a lower deductible so that more of their care is covered.
On the other hand, COVID has created uneasiness about future work prospects. Some people may want to save money instead by going with a lower premium, higher deductible plan, and hope they don’t require much care next year. The most affordable type of plan is a high-deductible health plan (HDHP), defined as any plan that, in 2022, has a minimum deductible of $1,400 for a single person and $2,800 for family coverage.
You may also want to consider contributing more to your flex savings account (FSA) or health savings account (HSA). These accounts enable you to set aside money on a pre-tax basis to pay for qualified medical expenses. If done through your employer, these contributions are done through payroll deduction.
An HSA can only be used if you’re covered by an HDHP. In 2022, you and your employer can contribute a combined maximum of $3,650 for a single insured and $7,300 for family coverage. HSA funds do not have to be used in any set amount of time and you can rollover as much as you want from year to year.
An FSA can not be used with an HDHP but should be available through your employer with all other types of health insurance policies. The current maximum annual contribution is $2,750 and most of your annual contribution has to be used within the first quarter of the following year, though you are allowed to carry over an approved amount.
What about supplemental insurance?
Many group benefits packages offer one or more types of supplemental health insurance. In the past, you may have passed on these options, but they may be worth considering for 2022.
Supplemental insurance is designed to help cover the gaps in your primary health plan. These gaps include the out-of-pocket expenses of care, especially expensive procedures such as surgeries. Supplemental insurance plans typically provide benefits for specific health needs and are much less expensive than a regular health insurance policy. However, they are not a substitute for having health insurance.
The type of supplemental plan that can be most beneficial should you suffer long-lasting effects from COVID-19 is hospital indemnity insurance. It helps cover the costs of hospital admission that may not be covered by other insurance. Plans typically provide benefits to you when you are admitted to a hospital or ICU for a covered sickness or injury.
You may also benefit from critical illness insurance. This type of supplemental insurance pays a lump sum benefit if you are diagnosed with a covered illness. It is designed to help people cover the cost of treating and recovering from expensive illnesses and procedures, such as heart attacks, strokes, and cancer. Some CII policies will cover COVID-19, though you will want to verify that before signing up.
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Should you buy group disability insurance?
While COVID has little effect on some, it has been crippling to others. With the new variants and “long-haul” sufferers still fighting the disease, this year would be a good opportunity to get short-term and long-term disability insurance if you’re not already covered.
Disability insurance replaces the income you lose if you can’t work due to an injury or illness, such as COVID. Most group plans offer both types of insurance. While some employers cover the full cost, others require employees to pay some of the premium.
If you already have an individually owned policy, joining your group plan is an affordable way to supplement your existing coverage.
Take advantage of group life insurance
The last two years have reminded us that people don’t always live to their full life expectancy. Many of the more than 700,000 people who died from COVID were otherwise healthy people.
If you pass away unexpectedly, there are likely people who depend on your income who would be left without those resources. And don’t forget there are expenses involved anytime a person dies, including funeral and estate settlement costs.
COVID isn’t the only threat to our lives, but its presence should prompt you to ensure you have adequate life insurance. During open enrollment, take advantage of group life insurance plans, especially if you can buy more than what is automatically provided.
Even if you have an individually owned policy, a small investment in group life insurance can supplement your coverage and better ensure your loved ones are financially taken care of in the event you die unexpectedly.
Joel Palmer is a freelance writer and personal finance expert who focuses on the mortgage, insurance, financial services, and technology industries. He spent the first 10 years of his career as a business and financial reporter.
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