5 Things To Consider With Open Enrollment

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Updated on October 28, 2022

Reviewed by

Fact checked by David Rubin

Couple calculating and looking over open enrollment paperwork — Photo: BURGER / Getty Images

Open enrollment is an important time each year because it gives you the opportunity to adjust your employee benefits. It allows you to sign up for health insurance, add a child, or make changes to other benefits. Employers often use the open enrollment period to make slight changes to the plans they offer, so you might need to make adjustments based on what is available to you.

Some employers will require you to take action at open enrollment time to avoid being unenrolled from your plan. It is important to carefully read the documents they give you so that you can make the necessary changes and keep your employee benefits. Open enrollment is also a great time to look at the amount you are contributing to retirement and see whether you can increase it.

Key Takeaways

Open enrollment is the ideal time to review your benefits and make any changes that will better suit your needs.
Consider whether your needs have changed from last year, or whether you expect them to change during the coming year.
Check what changes have been made to the plans your employer offers you, and how they line up with your needs.
Make sure you know about any changes to providers or procedures for payment.
See how any changes will affect your take-home pay.

How Have My Needs Changed This Year?

First, you need to determine if your needs have changed over the last year, or if they will change over the next year.

For example, if you are in your early 20s, you may be on your parents’ health insurance. However, once you turn 26 you will need to get coverage of your own. It is easiest to sign up for your own plan during open enrollment.

Also, dental insurance may not make sense when you are single, as the premiums are usually close to the amount that it will cover. But once you have children and add them to your plan, dental insurance will probably get you more for your money.

Additionally, you may need to start using the flexible spending account for daycare or health costs if your needs have changed.

What Are the Changes in Plans?

When you receive your open enrollment materials, you will need to look for changes in the plans that are being offered. You may see differences in not just the premiums for the plans, but also in the coinsurance and copayment amounts. You should also check to see if there is a different deductible amount.

Depending on the size of your employer, you may have several different plans to choose from. Your employer may offer a high-deductible health insurance plan or a traditional health insurance plan. You should consider your overall out-of-pocket costs for each plan and the likelihood that you will meet those maximums. This may change from year to year.

For example, if you are healthy and single, a high-deductible plan may be a cost-saving option, since you rarely go to the doctor. However, if you are planning on having a child in the next year, you may save money by choosing the traditional health insurance plan. You can add up the costs of the different plans to find one that is best for your situation.

Note

Some states enacted laws restricting reproductive health care rights after the Supreme Court overturned Roe v. Wade in June 2022. As a result, many employers have added or expanded coverage for travel costs incurred while seeking reproductive health care such as abortions or other medical procedures. Check whether your plan covers these costs.

What Are the Changes in Providers?

You need to also consider if there are changes in the providers of your benefits. Your employer may switch insurance companies depending on the overall cost for them for coverage. If there is a change in insurance providers, your doctor or dentist may no longer be covered under the new insurance plan.

There may also be changes in how the plans are administered. Some things may need pre-approval that did not before. You may also need to file your claims yourself for some procedures. (This is more likely to be the case with vision or dental insurance.)

Note

You will need to check with your insurance company before you go to the doctor to make sure you are covered and to avoid out-of-network costs or denied claims.

What Insurance Do I Actually Need?

It is also important to consider the insurance that you actually need for coverage.

For instance, if you do not have a family history of cancer, then you can likely skip the cancer insurance. Similarly, if you do not need glasses, you could decline vision insurance. You can always add it at the next open enrollment if you need it later on.

Term life insurance should be purchased independently of your job so that your coverage will continue if you change jobs.

When you are younger—in your 20s and early 30s—you may not need long-term disability insurance. When you reach your 40s, though, you may want to consider getting it.

How Will Things Affect My Take-Home Pay?

The final thing you need to consider is how your benefits will affect your take-home pay.

It is important to realize that many of the costs, such as premiums, will come out before taxes. This lowers your taxable income and may make it so that you do not notice the changes as much.

Money that you take out for your flexible spending account to help cover things like medical expenses and daycare may reduce your take-home pay. However, they may not affect you much if you were already budgeting for the expenses, since the costs are spread over the entire year.

You may also want to consider how the cost of using your health insurance will affect your budget. It is a good idea to have money set aside to cover your deductible so that you can use your health insurance when you need it.

Frequently Asked Questions (FAQs)

Why does open enrollment exist?

Open enrollment lets everyone eligible sign up for a health care plan at the same time. This can keep premiums down, as it discourages people from waiting until they are sick to sign up for health care. With an annual enrollment period, everyone signs up at the same time—healthy people included.

How long is the open enrollment period?

Open enrollment typically lasts for several weeks. For example, open enrollment for the health insurance marketplace is from Nov. 1 to Jan. 15 each year. Other insurance plans may have open enrollment in late fall; Medicare's open enrollment period is Oct. 15 to Dec. 7.

What happens if I don't sign up before the end of open enrollment?

You might miss your chance to sign up for health benefits if you miss the open enrollment deadline. An exception is if you experience a life change, such as marriage or birth, that qualifies you for a special enrollment period. If that's the case, you may be eligible to change your insurance benefits for a set period near the date of the change.

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Sources

The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.

HealthCare.gov. “How to Get or Stay on a Parent’s Plan.”
Supreme Court of the United States. "Dobbs v. Jackson Women’s Health Organization."
Willis Towers Watson. "More U.S. Employers to Offer Travel Benefits for Abortion Services in Wake of Dobbs Decision, WTW Survey Finds."
Healthcare.gov. "When Can You Get Health Insurance?"
Centers for Medicare and Medicaid Services. "Medicare Open Enrollment."
HealthCare.gov. "Special Enrollment Period (SEP)."