As I write this, the election results are not known, so let’s
concentrate on something you can control: open enrollment season
for health coverage! I hear you groaning, but this is your
not-so-gentle nudge to pay attention, because there is serious
money on the line. For the 157 million Americans who receive their
health insurance benefits through their
Jill
Schlesinger�
employers, workers will shell out $5,588 for family coverage
($1,243 for single), not including deductibles, according to the
annual Kaiser Family Foundation survey.
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To get started, review your existing coverage, what you spent
this past year; and then try to project what your health care costs
will be in 2021 – that may sound crazy amid a health pandemic,
but do your best. Then compare available plans to see what they
cover; how much they cost, including co-pays and deductibles; and
whether your doctors are in the network. Don’t forget to factor
in regular medications that you take and make sure that the plan
covers them.
You may want to consider a High Deductible Health Plan (HDHP),
which offers lower premiums and is paired with tax-advantaged
Health Savings Accounts (HSAs). If you’re generally healthy and
want to save for future health care expenses, the HDHP/HSA may be
an attractive choice. Or if you’re near retirement, it may make
sense because the money in the HSA can be used to offset costs of
medical care after retirement. The maximum contribution for 2021 is
$3,600 for an individual and $7,200 for a family. Those who are
over age 55 can make an extra $1,000 contribution.
Amid COVID-19, the IRS has made changes to some HDHP rules. The
CARES Act provides “flexibility for health care spending that may
be helpful.†Specifically, HDHP’s temporarily (from January 1,
2020 through December 31, 2021) can cover telehealth and other
remote care services without a deductible, or with a deductible
below the minimum annual deductible otherwise required by law.
In addition to HDHPs, many companies also offer Flexible
Spending Accounts (FSAs), which allow you to set aside $2,750
pre-tax in 2021 to help pay for unreimbursed medical expenses. Some
FSA’s can be “use-it-or-lose it,†which means you have to
incur eligible expenses by the end of the plan year or forfeit any
unspent amounts. Employers may, if they choose, allow you to carry
over up to $550 of unused FSA funds to the following plan year, but
some of those rules have been loosened due to the pandemic, so
check with your HR department.
MEDICARE: Open enrollment has begun for the
nation’s health care plan for those over age 65 and runs through
December 7th. Because insurance companies often change what they
cover from year to year and/or your health or regular medications
also may have changes, all enrollees (maybe with the help of family
or friends) should review and potentially update their coverage. Go
to the Medicare Plan Finder to compare plans and select what is
right for you.
AFFORDABLE CARE ACT (ACA): The 2021 ACA Open
Enrollment Period has started and runs to December 15. However, if
you lose your job-based benefits, whether due to COVID-19 or other
reasons, you may qualify for a Special Enrollment Period.
Additionally, if your income has dropped, don’t forget to update
your ACA application – doing so may allow you to qualify for
federal tax credits. If you are having problems paying for premiums
because of a hardship due to COVID-19, ask your insurance company
to extend premium payment deadlines or ask that they delay
terminating your coverage if you can’t pay your premiums. For
more information about COVID-related changes to the ACA, go to
healthcare.gov/coronavirus.
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Jill Schlesinger, CFP, is a CBS News business analyst. A former
options trader and CIO of an investment advisory firm, she welcomes
comments and questions at [email protected]. Check her
website at www.jillonmoney.com.
