For many employees, November marks the kickoff of open enrollment for 2025, meaning that your window of opportunity to select or change your insurance policy will be available until mid-to-late January. For many of us who have little experience choosing or changing our insurance policies, understanding health insurance options and language can feel extremely overwhelming. Luckily, we’ve created an easy-to-follow guide to help you feel prepped and ready to make an educated choice this benefit enrollment season.
Getting Started…
Let’s start with defining a few of those unfamiliar insurance terms.
- Premium: The amount you pay for a health insurance plan in exchange for coverage. Your premium must be paid for your health insurance plan to remain active.
- Deductible: The amount you owe for a health care service before your insurance begins to pay.
- Co-Pay: A fixed amount you pay for covered health care service. Insurance providers charge co-pays frequently for services such as doctor visits and keep in mind that the price varies by plan.
- Co-Insurance: The amount/percentage you pay for certain health care services. This is typically the amount you pay after a deductible is met. (For example, if you went to the doctor and your deductible was already met, you may pay 10% of your bill while your insurance plan pays 90%).
- Out-of-pocket expense: The amount you pay towards the cost of healthcare. This includes co-pays, deductibles, and co-insurance. These expenses are limited in your plan.
- Primary Care Physician (PCP): A doctor who coordinates treatment under your health plan.
Understanding Your Health Insurance Plan: Different Policies & Plans
When doing benefit enrollment, it’s important to understand what policies and plans are available to you and what each has to offer. Based on your age and health status, some plans might be better suited to meet your needs than others.
- One commonly offered plan is called the Preferred Provider Organization (PPO), which is a care plan that offers discounted fees for health care services and lowers copays and deductibles for services within the network. In this type of plan an insurance company covers most of the expenses of medical costs, while you are responsible for paying 10% after copay and deductible.
- Another option is the Exclusive Provider Organization (EPO), which is like the Preferred Provider Organization, however it ONLY covers doctors, specialists, and hospitals within the plans network.
- A High Deductible Health Plan (HDHP) is a plan with higher deductibles (remember, that means how much you pay out of pocket before insurance kicks in). HDHPs can be combined with HSAs or HRAs which can be used to pay for qualifying medical expenses.
- A Health Savings Account (HSA) is a medical savings account available to those enrolled in high deductible health plans. These types of accounts are employee owned and remain theirs even if they leave their company. The funds are also exempt from federal income tax at the time of the deposit and roll over year to year. It is important to note that the funds may only be used for medical expenses.
- A Health Reimbursement Arrangement (HRA) is an employer-owned medical savings account which employees can use as reimbursement for qualified health care expenses.
- Flexible Spending Accounts (FSA) are accounts employees can set up and use to pay out of pocket for medical expenses with tax free dollars. The account holder sets aside a pre-tax dollar amount every year to pay for medical expenses, however these types of funds can expire depending on the policy chosen by the employer.
What About Networks?
There are two types of Networks that you should know about during benefit enrollment. First, an In-Network plan is one where physicians, hospitals, or health care providers who contract an insurance plan provide services to its members. People within the network tend to have more coverage with other In-Network providers than those with Out-Of-Network plans.
Something that is Out-Of-Network means that physicians, hospitals, or other health care providers do not work with an insurance plan to service its members. Expenses for services provided by out of network providers have the potential of not being covered or having less coverage than in-network providers.
Moving ahead into 2025…
Now that you’ve reviewed the basics and are ready to start with benefit enrollment, it’s time to get organized and feel confident as you choose the policy that fits you best.
