Open Enrollment: What People With Employer-Provided Insurance Need to Know

By Terry Wilcox, patientsrising.org

It's open enrollment season for health insurance.

The phrase sounds so inviting, yet it can be an anxiety-filled event—almost making us need mental health therapy just to get through it. And while there are many articles and resources available for people who purchase insurance through an Affordable Care Act exchange, many people with employer-provided insurance coverage are unclear about how open enrollment affects them.

In 2016, employer-provided insurance plans covered157 million Americans. And many with health benefits provided through an employer are still struggling to access the treatments we need, when we need them.

Here are a few things that everyone with employer-provided insurance should know during open enrollment.

Employer-Provided Insurance: Funding the Benefit

Not all employers offer the same health insurance. First, you need to identify whether your employer-provided health coverage is either fully insured or self-insured.

• Fully insured health plans are those in which the plan takes on the responsibilities and risks for paying an individual's claims.
• Self-insured or self-funded plans put the risks and responsibilities of paying claims directly on the employer.
  

Fewer and fewer companies are opting for fully insured plans. If the company is small, a fully insured plan may be the best approach because the health plan continues to manage the financial risk. If you have a few very sick newborns or employees with high-cost conditions, such as hemophilia, those costs are spread out across a health plan with thousands of people and not just one employer.

Over the last decade, more large employers have decided to take on increased risk and do it themselves with self-funded plans. Self-funded plans are also known as administrative services only (ASO) or administrative service contract (ASC) plans. Regardless of the name, the principle is the same: large companies managing the health benefits themselves.

Types of Employer-Provided Insurance Plans

Many employers are offering their employees consumer-directed health plans, which go by the acronym CDHPs.

You might say that CDHPs are really the "I pay for everything" health plan. That's because these high-deductible plans require people to pay full-price for everything until you reach the deductible. After that, the health plan kicks in. Usually, people still pay a deductible of between 20 percent to 30 percent and insurance pays the rest.

As more insurance companies shift to self-insured plans, it alters our concept of health insurance. In essence, your employer has taken on the role of the traditional health insurance company with the insurer acting as a third-party administrator to process and pay the bills. Most human relations departments in these large companies rely on the expertise of health plans, but the final decision over coverage rests with your company.

Employer-Provided Insurance: Benefit Design

Selecting your specific health plan can be overwhelming, but it's critical to review each plan's benefit design.

Start by calculating how much you and your family spent last year on health care—maybe even the last two years. Next, identify any new potential health care needs, including an upcoming surgery, labor and delivery, behavioral health services and pharmaceutical benefits. This process can take a few hours, but it could save you thousands or even tens of thousands of dollars later.

Use an online calculator that is designed to help you anticipate costs under each plan option. These tools use sophisticated algorithms based on claims data from millions of people to calculate costs based on predictive health insurance models incorporating your age, risk, prior costs, health status and experience.

Employer-Provided Insurance: Provider Selection

Finally, everyone with an employer-provided insurance plan should consider a plan's selection of providers. Is a health care provider or hospital you want to use in-network or out-of-network?

Many people look for a plan that has their health care providers in-network. Other people may be open to finding a new health care provider to lower their health care costs. Decide what is important to you and select a plan accordingly.

Beware that surprise billing for out-of-network charges is a common problem. If you have a preferred health care provider or specialist, take the time to review whether he or she is covered by your plan. Today, many health care providers prefer to operate independent of a plan to deliberately remain out-of-network. It's critical for you to select the right plan that will get you access to the right care.