One of the biggest sources of financial stress Americans face is healthcare: both finding the coverage they need and the cost of obtaining it.
Open enrollment season for the US Health Insurance Marketplace is here and it’s time for those employees without adequate coverage (an estimated 13.8 million) to choose their plans and prepare for the associated costs. Unfortunately, this period can cause confusion and financial stress, especially if your workers don’t have a clear understanding of what they need to do and how much it will cost.
Here are some of the biggest issues that come up during enrollment season and what you can do to guide your employees through this process.
1. Deciding between old and new healthcare coverage
Open enrollment is the time of year when your employees are able to choose a new healthcare plan that covers their medical needs and, if the employer will pay for it, those of their family. Unfortunately, the easiest option is to not make any changes at all, and simply proceed with the same plan from last year. For many employees, this could mean overpaying or paying for coverage they don’t need. Your workers will then stress their budgets and leave themselves vulnerable in the event they need care for which they don’t have coverage.
The best way to conquer this hurdle is to ensure your employees are aware of their options and their responsibility to choose a plan. If you don’t provide this benefit, encourage your employees to compare new plan options to their current coverage by sending them to Healthcare.gov. That way, they can get started with the right resources and see if there’s a better plan option for them.
2. Figuring out what’s affordable and adequate
Once your workers know where to start, they’ll need to find the best coverage for their health needs. This should start with them reviewing their prior plan, seeing which coverage they still need and determining if there’s any coverage they no longer want or something new they need. Health Insurance Marketplace plans all cover things like pre-existing conditions and preventive care, so your workers don’t need to concern themselves with missing out on these offerings.
Your employees do need to worry about whether they can afford the coverage they want. Often – unless there’s an ongoing medical issue for which an employee needs specific coverage or they require a plan for their dependents or they want to keep the same doctors or providers – the most common issue is choosing between plans with higher deductibles or higher premiums.
A higher deductible means their budget is less stressed now, but costs may have to be covered out of pocket when they receive care, whereas a higher premium adds to their monthly bill now but often means lower out-of-pocket costs for future care. Finding the right balance can help lower their level of financial stress.
3. Understanding the deadlines and penalties
In addition to understanding their coverage, your employees must be aware of the deadlines for choosing a plan and the penalty for going without.
The current enrollment season runs from November 1, 2016 through January 31, 2017, though employees must choose a plan by December 15th in order for it to be effective starting January 1.
Your workers must meet these deadlines or they’ll risk having to pay a penalty of at least $695 on their federal tax returns for not having healthcare coverage. That fee could be even higher as it can also be calculated as a percentage of their income (2.5 percent in 2016).
This is a substantial bill, especially when you consider how little most Americans save. If you want your workers to avoid this additional financial stressor, take the time now to help them find the right health care coverage.
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