How the pandemic could affect your open enrollment choices: Money, Honestly podcast
Open enrollment season is upon us.
For Americans who have insurance plans and other benefits provided by their employers, October and November is generally the window of time designated for workers to make or reevaluate benefit selections for the upcoming year.
In a role-reversal, reporter Stephanie Asymkos plays the role of host and places Cashay editor Janna Herron in the hot seat to discuss the in’s and out’s of open enrollment and how people should plan during an unpredictable time in the latest episode of Money, Honestly podcast.
(Transcript below)
Janna: Hi, this is Money Honestly, I'm Janna Herron. Today, we're going to do a little role reversal. Stephanie Asymkos is a reporter on my team at Yahoo Money and Cashay will be interviewing me about open enrollment during the panel. Hi, Stephanie, thanks for joining us.
Stephanie: Hi, Janna.
JH: And with that, I'll hand it over to you.
SA: Okay, this is going to be fun. Okay. So today I feel like we're going to talk about open enrollment and we hear this phrase usually once a year. Some of us know exactly what to do, we know exactly what the drill is going to be like. And some of us don't know what it means at all. So please tell us in the simplest terms possible, what is open enrollment?
JH: So the open enrollment that we're going to be talking about today is the time period, usually in October or November, when your employer allows you to make changes to some of the benefits that you have. So you might want to switch up your healthcare plan, or maybe your employer is offering a new healthcare plan. Other benefits might be commuter benefits, pet insurance, signing up for life insurance or disability insurance. So basically this is the one time during the year where you can go and make those changes for the next year.
SA: Okay, so it is 2020. It is a year unlike any other. We've learned to operate on this basis of what's up is down, what's down is up. So how is open enrollment, is it more important this year because of the pandemic and what does the pandemic have to do with open enrollment now?
JH: So people are thinking, yes, it is more important this year. According to one MetLife survey this year, half of workers say that open enrollment this year is more important than in 2019, and two-thirds of them cite COVID-19 as that reason, followed by financial reasons, which could also be related to COVID-19, and health care costs, which also could be related to COVID-19.
Another survey from Aflac showed nearly identical numbers as the one from MetLife. So really, the pandemic has been a wake up call for many Americans to really look at the benefits that they get, especially healthcare, and make sure they choose the right ones. But nevertheless, open enrollment choices should be important no matter what year it is, but 2020 is especially important. Usually, 9 in 10 workers just choose the same benefits that they had from the previous year without really doing much research. And I think on average, people spend about 30 minutes reviewing those choices. So, in general, it's really important. Now, it might be even more important than before.
SA: I feel like people spend more time looking through Netflix to watch something than they do for open enrollment and the selections that they make for the next entire year. That's bonkers to me. Okay, so how does it affect the choices that we'd make? Should someone really be thinking, should I change my health? Should I change my dental? You mentioned it's a wake up call. Talk to me more about that.
JH: Sure. So the first thing is it may actually affect what options are available to you. So many companies are hurting financially right now. So they are considering cutting some benefits to reduce those costs, according to the Employee Benefit Research Institute. So you might not have the same options as you did last year. The good news is it won't be the big stuff like healthcare or retirement that's getting cut. It's more like the little ancillary add-ons like employee discount programs, tuition, reimbursements, bank at work partnerships. Those are the kinds of things that will be going away. So when you get your benefits package and you're looking at it, you might see things are missing from last year. And that might be one of the reasons.
Now, how should you be thinking differently when making selections because of the pandemic? So let's start with the big one, healthcare. So if you are a person who has an underlying condition that puts you at risk of severe illness from COVID-19, if you haven't already, if you're not already choosing the more premium healthcare plan with a lower deductible, that might be something you want to consider. I don't want to say people are going to get sick or anything like that, but you might want the more comprehensive package that will cover more of those out of pocket costs than going for a high deductible plan where you're going to be paying a lot of costs upfront first before your health insurance kicks in. So that's one thing about healthcare.
Another thing a lot of people have work from home, basically are working from home, and for the foreseeable future. And some people have moved to a different area. Maybe they go and they live with their parents, maybe they went to a second home, so they might be in a different area than their primary residence. So you want to make sure that your healthcare plan, you want to check out the network of providers, medical providers, in the area where you're living right now, and you want to make sure there are good options. So you want to just make sure that the health plan is portable like that. And last, when it comes to healthcare, tele-health actually has become a lot more popular during the pandemic. People couldn't see their doctors for a while so they tried to Zoom with their doctor, and maybe that's something they want to continue doing. So you want to check to see what kind of coverage you have for telemedicine services as well. So that's healthcare, Stephanie. So that was a lot. But there's more.
SA: I mean, so speaking that there is more, you've given us this understanding that open enrollment is so much more broad than just health and dental. So what are some of the overlooked benefits from employers? You've mentioned things like commuter benefits, life insurance. Talk to me more about that. People maybe could gloss over them and just hit the biggie of health insurance. So what are the ones that we overlooked but shouldn't?
JH: Yes, and definitely shouldn't in light of the pandemic as well. So let's talk about insurance, aside from healthcare insurance. So this may be a little morbid to think about, but I think what's happened this year has gotten a lot of people thinking about, "Oh, do I need life insurance? Should I have disability insurance?" And if you have people who depend on your income, the answer is yes. So check to see what your employer offers. A lot of times employers offer life insurance at no extra cost to you, and then you can increase the amount of insurance at a discounted price. Same thing with disability insurance. So you want to check to see what they offer and at what price, because in some cases you might want to get the free option, but then go to the regular marketplace and get a little bit more life insurance on top of that, because you might get a better deal that way. So those are two types of insurance you really want to look at.
Another thing is dependent care flexible spending accounts. So this is money that you put in pre-tax into an account that can be used to offset childcare or dependent care, if you have somebody taking care of an elderly relative, for example. So this I think is one of the toughest ones for parents right now, especially because schooling has just changed so much and we don't know what it's going to look like going forward. And so, for some people, maybe they're working from home and so their child is home with them and they don't really need to put much money into a flexible spending account because they can watch over their child and they don't have to pay daycare expenses. For other people who may not have used daycare or after school care before but now they have to go to work, but their child has to be at home, remote learning, they might be hiring somebody to come in and watch their child and help them do that. So maybe they need to put some funds into the flexible spending account. I mean, I'm a parent myself and my husband and I have been talking about this, how much money are we going to put away for afterschool care costs or summer camp costs next year? And it's a moving target. And the problem is, these funds are use it or lose it at the end of the year. So you don't want to lose those funds, not when we're in the type of uncertain environment that we're in right now.
SA: Definitely not. So on the flip side of that, are there benefits that we maybe don't need right now?
JH: You know what, it's not even right now. There are some benefits that are out there that are superfluous, really. So some of the ones that you can skip are cancer, accident, or death and dismemberment insurance at an extra cost. While these sound like they're really helpful, your healthcare coverage should cover most of these instances. Plus, these don't really kick in unless you meet certain thresholds and very specific cases, and it's not really worth the extra costs. Other things that you might want to look at that you didn't consider before, just going back to your other question, is programs that help to establish emergency funds. Some employers offer that. Some employers offer short-term loan programs and/or access to payroll advances. Walmart does that, I think. So these might be helpful for people if they run into a cash crunch and they have reduced income, and God knows that this can happen at any time right now with things shutting down, things opening up. So those programs that might be helpful to some people as well.
SA: Okay, so it's really just predicated on who you are and what your situation is, correct?
JH: Yeah.
SA: So what if you're married and you need to make these decisions together? How does that impact open enrollment?
JH: So that's a little bit harder, but you get more choices. So, say, both you and your spouse work and you both get benefits from your respective employers. All of a sudden you may be looking at four different healthcare plans to choose from versus two plans. And the real difficult part of this is that oftentimes your enrollment, open enrollment periods, don't necessarily overlap. But as much as they do, and as much as you can, you want to compare those four healthcare plans to figure out what's best for you and your spouse. And it could be that it's best for each spouse to take their own employers healthcare plan. It might be better for one spouse to carry both of you on their employers healthcare plan. So that's the tricky part of it. You get more options, but it makes it that much tougher to find what's best for you.
SA: Okay, got it. So this is my last question, and we will round this out and end with how we started on that this has been a bonkers year, and if anything, I feel like all of us will walk away with 2020 just knowing that life happens and sometimes it's unpredictable. So with open enrollment, are you stuck and are you beholden to the changes and the selections that you make during open enrollment? Because we don't know what the next 11, 12 months bring. There could be a new child, a marriage, a divorce. Anything could happen between now and this time next year, so can someone make changes after they have selected a new plan?
JH: Yes, but only in certain circumstances. So you can't just say, "Oh, you know what? I change my mind. I really, really want to go with the premium healthcare plan." It doesn't work that way. So, basically, you can to make these changes. If you have a certain life event happen, and these are usually the big things, you get married, you get divorced, your spouse loses a job or he gets a new job, you adopt a child, you have a child, your spouse passes away. Those are reasons that will allow you to make changes to your open enrollment. If you're 25 and then you turn 26 and you lose your parents' healthcare coverage, that's another life event that will trigger a special open enrollment period for you, so then you can make those changes to fit your life circumstances. Otherwise, you're stuck. You're stuck with it until next open enrollment. So if you find that you really don't like that healthcare plan, make a note of it so that you will change it next year.
One of the things I forgot to mention is commuter benefits. I think that's another big one that might be affected by the pandemic. So, Stephanie, you and I are in New York City. When we go in to work, sometimes we use the subway, and so we might have commuter benefits to help us cover the cost of taking the subway. And we're not doing that anymore. But maybe sometime when we decide to go back to work, maybe we bike to work or we use some other way. Maybe we drive to work. I don't even see that happening. So you might want to change what your commuter benefits are and make sure that they cover your new way of transporting yourself to work, if and when that happens.
SA: Right, when it's no longer from the kitchen to the living room.
JH: Right. Right. Yeah, so open enrollment, I think that's also good as you get a glimpse of other kinds of benefits that you do not necessarily have to enroll in, that you may take advantage of later on. For example, there's a lot of employee discount programs, and so if you're buying a new computer or you're buying tickets or you're buying this or that you might actually get a discount through your employer through this employee discount program. So open enrollment can be a good way to look at those options that you have, that you don't necessarily need to sign up for. Legal services, there might be some financial wellness services as well that you may not realize you had, and maybe now is the time to take stock of what your employer offers and how it can help your financial and regular well-being.
SA: There you have it.
JH: I guess I should wrap this up.
SA: Yeah, that's my cue to you.
JH: Well, Stephanie, thank you so much for joining us today and playing host on Money, Honestly. And thanks for everyone listening. Head over to Apple Podcasts, and leave us a five-star rating and review. We'll see you next week.
Stephanie is a reporter for Yahoo Money and Cashay, a new personal finance website. She can be reached at stephanie.asymkos@yahoofinance.com. Follow her on Twitter @SJAsymkos.
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