It’s Open Enrollment Time Again 2020

YOUR MONEY ADVISER

It’s Time to Choose a Health Plan. Prepare Yourself for the Cost.

CreditCreditTill Lauer

While the cost of job-based health insurance is moderating from earlier punishing increases, premiums are now a burden for many workers, health experts say. They recommend that employees review their options during this year’s open enrollment period to make sure they’re not overlooking some cost savings.

Open enrollment, a window of time when employees select health coverage and other benefits for the coming year, is underway — or will be soon — at many workplaces.

Workers may assume that plan choices are the same as last year and pay scant attention. But that’s not always the case. So employees should make time to review plans, said Tracy Watts, a senior partner and national leader for health policy at benefits firm Mercer.

“They need to do their homework,” Ms. Watts said.

survey from the Kaiser Family Foundation found that the average annual family premium increased 5 percent in 2019 and is now nearly $21,000, with workers paying $6,015 and employers the rest. The survey included more than 2,000 large and small employers.

And the National Business Group on Health, which surveys large employers, expects the total cost of health benefits to rise 5 percent next year.

While the increase in premiums over the past year is well below the double-digit growth that was once common, it outpaced wage growth (3.4 percent) and inflation (2 percent) over roughly the same period, making health insurance costs a strain for many families, Kaiser found.

Adding to the cost are higher deductibles — what workers must pay for their medical care before their insurance covers it. The average single deductible is now $1,655, double what it was a decade ago, Kaiser found.

One bright spot, according to a survey by the National Business Group on Health: More large employers say they are expanding their health plan offerings beyond high-deductible plans. Just a quarter of employers surveyed said they would offer only high-deductible plans next year, down from 39 percent in 2018, partly because of worker demand.

Employers said they typically added a “preferred provider” plan, or P.P.O., which allows workers to seek care from doctors in a network for a lower fee. Such plans often have higher premiums but lower deductibles.

“Employers are reintroducing choice,” said Brian Marcotte, chief executive of the National Business Group on Health, which surveyed nearly 150 large employers offering coverage to about 16 million people.

What can employees do to manage their health costs?

Ms. Watts said workers should compare the plans their employer offered and do the math: Take the total annual premium and deduct any employer payment to get the basic cost of each plan. (Many employers now offer online comparison tools.)

“People are often scared by big deductibles,” she said. But high-deductible plans usually carry lower premiums and may come with an employer contribution — often to a special tax-free health savings account — which may make them less costly than a P.P.O. plan.

Employers often match employee contributions to a health savings account, or H.S.A., linked to a high-deductible plan. Workers can use the money if they need it — or save it, if they don’t. The account balance rolls over and stays with the employee, even if he or she switches jobs.

Opting for a higher deductible and betting on staying healthy may be risky, however, if the family lacks funds to cover the deductible and pay for care, should the need arise. “It’s not always that clear,” said Matthew Rae, associate director of the Kaiser foundation’s program on the health care marketplace and a co-author of the employer benefits report.

The problem is that some medical needs are unpredictable. “No one says, ‘I’m planning to get cancer next year,’” said Caitlin Donovan, a spokeswoman for the Patient Advocate Foundation, a nonprofit group that helps people with serious illnesses.

Still, Ms. Donovan said, workers should at least try to estimate what they know they’ll spend money on before selecting a plan, like prescriptions they take regularly or treatments they expect to schedule. “Gamble with what you know,” she said.

Check whether your plan will still cover your specific prescriptions and whether your doctor and hospital will remain in your covered network — where costs are lower — for the coming year and call to verify it. “Online directories are notorious for being inaccurate,” Ms. Donovan said.

Also, if you’re married, consider whether a spouse’s health plan may be less costly, she said.

If you do choose a high-deductible plan, try to put as much money as you can into an H.S.A., Ms. Donovan said. If you don’t use it, you can keep the money and may even invest it for care in the future. And money in an H.S.A. can be used to pay for children’s care, even if they are covered by a different health insurance plan, Ms. Donovan said.

At a minimum, Mr. Rae said, it’s a good idea to contribute the money you save on premiums by switching to a high-deductible plan.

Another money-saving option to consider: Many employers will offer a premium discount, or contribute extra money to a health savings account, if workers agree to take a health assessment or screening. The idea is that identifying factors like smoking or high blood sugar can help people get treatment and avoid developing health problems that are more serious and costly to treat.

Here are some questions and answers about health coverage for 2020:

Can I save money by using “virtual” doctor visits?

Employers are increasingly offering options for workers to obtain treatment from doctors who are in a different location using technology, including live video chats and remote monitoring using mobile apps.

The cost depends on the details of your health plan. Typically, someone with a high-deductible plan will pay about $40 to $50 for a virtual doctor visit, compared with $70 when visiting a convenience clinic and about $140 for an office visit with a primary care doctor, Ms. Watts said.

How much can I contribute to a health savings account in 2020?

The maximum contribution for next year is $3,550 for individuals and $7,100 for family coverage. (People 50 and older can contribute an extra $1,000.) To qualify for an H.S.A. in 2020, a health plan must have a deductible of at least $1,400 for an individual and $2,800 for a family.

Some employers offer a different option to help workers save on health costs, known as a flexible health spending account. An F.S.A. lets employees set aside pretax money from their paycheck to pay for health costs their insurance doesn’t cover. These accounts have lower contribution limits ($2,700 for 2019; the Internal Revenue Service hasn’t confirmed a limit for 2020), can’t be moved from one employer to another and limit how much money can be carried over from one year to the next. A household making $59,000 would save about $1,000 in payroll taxes over a year by electing the full F.S.A. contribution for 2019, according to the FSAstore.com, an online specialty retailer.

Both H.S.A.s and F.S.A.s can be used for a wide variety of health and medical costs. For details, see I.R.S. Publication 969.

What if I don’t have health coverage through an employer?

The federal and state health insurance marketplaces created by the Affordable Care Act continue to sell health plans to people without job-based coverage. The Obamacare exchanges offer insurance, often with subsidies to help cover the cost, to 11 million customers.

The federal HealthCare.gov website says open enrollment for marketplace coverage in 2020 is scheduled to begin Nov. 1 and run through Dec. 15. Several states run their own marketplaces and have extended deadlines, some as late as Jan. 15.

A spokeswoman for the Center for Medicare and Medicaid Services, which oversees HealthCare.gov, said federal litigation over the Affordable Care Act was not expected to affect this year’s exchange open enrollment. More details about open enrollment will be announced before November.

The Affordable Care Act faces a federal court challenge that has thrown Obamacare’s long-term fate into question. But policies for next year, at least, are unlikely to be affected by the litigation, said Mr. Rae at the Kaiser foundation.

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