Every year, companies talk with their employees about their insurance coverage for the new health plan year. For most employers, that takes place in the fall as a traditional method of enrolling in insurance plans, and some organizations use another time frame for their plan year.

Either way, employees must decide what type of coverage they want or can afford. This period is called open enrollment because that is when you can elect certain changes to be made for benefits offered to everyone at their respective companies.

According to the National Association of Insurance Commissioners (NAIC), during an open enrollment period, insurance carriers are required to accept all applicants of the group without underwriting or evidence of insurability. Open enrollment is generally only held once a year. If you miss your company's annual open enrollment, you likely will not be able to enroll in your employer-sponsored health insurance program until next year. Certain exceptions apply for new employees or employees with life changing events. Before making a choice:

  • Check to see if your current physicians and area hospitals are in the plan's network. Using network providers generally will save money on your health care.
  • Check to see if spouses or dependents are covered. Some plans will cover spouses and other dependents, while other plans will not. Clarify coverage for step children.
  • Read all of the plan materials thoroughly. Doing so will tell you what your rights and responsibilities are under each plan.
  • Review any pre-existing condition exclusions and prior authorization requirements in the plan materials. Under the Affordable Care Act (health reform legislation), health plans cannot exclude coverage for pre-existing conditions for children under age 19. However, this does not go into effect for adults until 2014.
  • If you take prescription medications, check them against the list of approved drugs in each plan booklet. Also, if you take an expensive brand-name medication, check the copayment that each plan requires.
  • If any part of a plan is unclear to you, ask for help from your human resources department or the insurance carrier.
  • If you are not satisfied with the answers to your questions, contact your state insurance department.
  • If you or any family member needs ongoing physical therapy or has a mental health problem that requires therapy, review what your health plan will and will not cover.
  • Check to make sure that you and your family have adequate coverage for emergencies if you are traveling either in the U.S. or in a foreign country.

Employers are trying to save money, especially during the current economic downturn. One way to do this is to reduce health insurance benefits and shift more of the premium costs to employees. Employees should make sure to carefully read their health plan materials, they may find that their benefits and costs will change for the coming year. Several of the provisions of the Affordable Care Act that took effect on September 23, 2010, impact group health insurance. These changes, which employees should know about when choosing a health plan provided by an employer, include:

  • You can keep your adult children on your health plan until they are age 26.
  • Your health plan cannot exclude coverage for pre-existing conditions for children under age 19.
  • Lifetime limits on health insurance coverage are not allowed.
  • Limits on annual coverage amounts are being phased out.

In this uncertain market, as an employee it's important to carefully evaluate your health care costs when making your annual enrollment decisions. While one option might have high monthly premiums and a low deductible, and another might have a low premium but more out-of-pocket expenses, it could be misleading which plan is best for you until you do the figures.

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