It’s that time again! Another year has come and gone and the 2018 open enrollment period to select your healthcare options is here! From November 1, 2017, to December 15, 2017, you can make any changes you want to your healthcare coverage penalty-free. As open enrollment only comes around once a year, you do not want to squander this opportunity!
You Only Have Until December 15, 2018, To Make Adjustments
The 2018 open enrollment period is only 45 days instead of the previous 90 days, although some states have extended their own marketplace deadlines into January. You only have from November 1 to December 15 to make any changes to your healthcare coverage that will be in effect from January 1, 2018, until December 31, 2018. Not making any changes means your current selections will carry over to the next year.
The open enrollment period lets you make penalty-free changes on the “Obamacare” Exchanges and through employer-sponsored plans. Here’s why you might want to make adjustments:
- Are currently uninsured and want coverage
- Want to switch to a cheaper plan
- Switch to a plan with more extensive coverage
- Switch insurance providers
- Enroll in additional employer-sponsored programs like childcare or a Health Savings Account (HSA)
Remember, once December 16th arrives, you will no longer be able to make any adjustments to your health plan unless you live in one of these states or experience a “life event” like getting married, birth of a child, changing jobs, relocate to a new county or zip code, or turn 26 years old.
Also, if you receive employer-sponsored healthcare, verify their open enrollment dates. They might differ from the Federal open enrollment dates.S
See If You Qualify for a Tax Credit
If you plan on applying for coverage through the Federal Health Insurance Marketplace, all or most of your monthly premium might be covered by a tax subsidy. To see if you qualify for a credit, enter your estimated household income for 2018. Try to be as precise as possible to ensure you receive an accurate credit amount. If you understate your annual income, you may have to repay a portion of your credit on your 2018 tax return.
Determining if you qualify for a credit can also mean the difference between being able to afford insurance and having to be uninsured. Except for a few exceptions, you will be fined if you do not have health insurance. If you do not have an approved healthcare plan with “minimum essential coverage,” you will have to pay a fee for each month you were completely uninsured if you go more than two consecutive months without insurance.
Having your tax documents readily available when you apply will streamline the application process and allow you to complete the application in a single session.
Consider an Obamacare Alternative (and NOT pay a fine)
If you are not pleased with your healthcare options for next year, you can also consider joining a health-sharing plan that can be significantly cheaper than traditional medical insurance plans. There are some key differences with these plans that help make them more affordable:
- You are a “self-pay” patient
- Certain procedures and medications are not reimbursed
- Must pursue a healthy lifestyle
- Dental and Vision expenses are ineligible
Since these plans are notably cheaper, health-sharing plans have skyrocketed in popularity in recent years as households from all over the country have joined to save money while still having adequate medical coverage that isn’t subject to any fines that the uninsured might have to pay.
Research Employer Wellness Programs
If you have employer-based insurance, you might be able to get a discount by participating in a healthy behavior program. For example, they might make a $100 contribution to your health reimbursement account if you commit to having an annual physical and are tobacco-free, in addition to a monthly premium discount. They might also offer rewards if you track your exercise with a Fitbit device.
By focusing on healthy behaviors and preventative health care, you not only save money on your monthly premiums now but, you might also pay less in treatments later on because you took care of your body.
Use a Healthcare Navigator
If you need help choosing an insurance plan, your employer or exchange should provide free, personal help to answer any questions you might have. They can help you determine if the cheaper, high-deductible plan will be more cost-effective or if you should upgrade to a more extensive plan that has a higher monthly premium but will save you money long-term because of the higher coverage amounts.
Sign-Up For a Tax-Advantaged Health Savings Account
If you qualify for an HSA, HRA, or FSA through your employer or insurance provider, you might want to sign up for one. During the year, you can make tax-free contributions that will help lower your taxable income for the 2018 calendar year. And, when you use your contributions for qualified medical expenses, you will not pay any tax when you spend your “health dollars.” Since most medical treatments and purchases are eligible, you shouldn’t have to worry too much about making a taxable purchase. But, check the plan rules before paying your bill with the health savings account contributions.
Of the three options –HSA, HRA, and FSA– the HSA (Health Savings Account) is the most lucrative because your contributions never expire. Even if you are 20 years old and do not make your first withdrawal until you retire at age 65, you will never pay a single penny in taxes on the contribution either. And, since the contributions can be invested, your account size can grow as your contributions accrue interest!
Make sure to avoid these common HSA mistakes, if you can contribute to a tax-advantaged health savings account.
Don’t Wait Until The Last Minute
Finally, the 2018 open enrollment will be extremely busy. The insurance providers hire extra staff to provide customer service. However, you can still experience longer-than-usual wait times when calling the helpline. It can also take longer for your application to process. Don’t wait until December 15 to make your selections. Avoid any potential setbacks that prevent you from qualifying for adequate coverage,
If you are required to submit any additional documentation to qualify for coverage, you might miss the filing deadlines and will have to wait until the 2019 open enrollment period to obtain coverage. In the meantime, you might be subject to the tax if you do not qualify for an exemption.
Summary
For most people, the healthcare open enrollment evokes the same emotions as filing your taxes. It’s something you want to complete as soon as possible and not think about until next year. Making wise choices during the 2018 open enrollment period can be one of the easiest ways to improve your financial situation.
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