The 4 Biggest Mistakes People Make During Open Enrollment and How to Avoid Them – NBC New York

Open registration season doesn’t come with much fanfare, but making an uninformed election decision now could impact your health and finances for next year.

And decisions that cause regret are more common than you think. Roughly half of millennials and Gen Z adult workers say they don’t understand health insurance options and choose their plans blindly, according to the study. recent survey 4,167 people from Justworks, an HR technology company, and The Harris Poll.

As a result, nearly half also say they regret their health insurance choices.

“Unlike other types of insurance, where you can cancel or change your car insurance or renter’s insurance throughout the year except for certain life events, (health insurance) is a decision you have to make. live with it for 12 months,” says David Feinberg, senior vice president of risk and insurance at Justworks.

Even experts make mistakes that haunt them.

“I made decisions that I would later regret,” Feinberg says.

“It’s like any budgeting exercise: you do the best you can with the information you have about expected results for the coming year,” he explains. “Unexpected claims arise or not. (Then) things either work out more favorably, in which case I might be reinsured, or less favorably, in which case I probably had to pocket it more than I wanted.”

Here, Feinberg shares the biggest mistakes he often sees people make with health insurance during open enrollment and how to avoid them.

Waiting until the last minute

“The worst thing you can do during open enrollment season is put off exploring your options,” Feinberg says.

The open enrollment period will depend on where you get your health insurance. For example, the registration window for Affordable Care Act Marketplace Plans valid from November 1, 2024 to January 15, 2025. Meanwhile, the enrollment period for most employer-sponsored insurance plans typically begins in the fall and lasts several weeks.

“This is a really big decision that will impact people’s income (and is probably their biggest expense after rent),” he says. “And so it’s really important to make sure they understand what those decisions are and how they will impact their lives.”

Use any printed materials, question-and-answer sessions, town hall meetings, or other resources provided by your HR department to understand your options.

Making an uninformed decision at the last minute is “as effective as gambling,” Feinberg says. “It could work in your favor, but it’s a rash decision and, unfortunately, that’s probably what leads to regret.”

Thinking that the most expensive option is better

When people make last-minute choices, they often assume that the most expensive option means the best and most comprehensive coverage for them, Feinberg says. This is a big mistake.

Instead, it’s important to consider your specific health needs and the needs of any dependents or partners on your plan.

Feinberg recommends asking yourself a few key questions to determine your needs:

• What health-related expenses did you pay last year for medical, dental, vision and other health needs?
• What procedures do you think will be required in the next year?
• What is your typical prescription drug cost?
• What is your risk tolerance? Can you cover unexpected healthcare costs out of pocket?

In general, Feinberg is a fan high deductible health plansor HDHP, which have lower monthly premiums and are generally popular among people with minimal health insurance needs. When combined with a health savings account (HSA), this option can provide the most flexibility in health insurance, he adds.

That being said, “this type of health insurance plan typically requires the highest level of understanding and research.”

Ignoring HSAs and FSAs

Speaking of savings accounts, Feinberg says you should learn about HSAs and flexible spending accounts, or FSAs.

Both types of accounts use your pre-tax contributions to cover certain medical expenses, but they differ in several significant ways. For example, to access an HSA, you must be enrolled in an HDHP and not covered by Medicare and not be considered a dependent.

FSA money is usually due be spent by the end of the year, unless your employer allows you to extend the amount.

For those who are eligible, HSAs are popular because of their “triple tax benefit“: Contributions come tax-free, funds grow tax-free, and you can withdraw money for qualified tax-deductible medical expenses.

Feinberg took advantage of an HSA himself: When his wife gave birth to their first child, he contributed money to pay for a private room in a New York hospital.

Don’t learn from your mistakes

It can take several years for younger workers to learn how to navigate the health insurance system and determine their annual needs.

If you end up making a regretful decision about your insurance coverage, Feinberg says it’s important to learn from your mistakes, track your results, and course-correct in the next open enrollment season.

“When you make these decisions, you make them in the abstract: Well, what if something happens? Or what does a one-time event look like?” he says. “The benefit of going through a year with a plan you regret is that you can see what those real-life examples are like and then start thinking about how if you had done something different, things might have been turn out differently.”

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