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WalletPrep worksheet · Work and income

What to do during open enrollment

Name ____________________ Date __________

Key ideas

  1. Compare total cost, not just premiums. Add a year of premiums to the care you expect. Then add premiums to the out-of-pocket maximum for a bad year.
  2. Most FSA elections don't roll over. Many employers make you choose your FSA amount again each year. Miss it and you start the year with $0 set aside.
  3. After the window closes, you usually wait. Outside open enrollment you can only change plans after a qualifying life event, like a birth, a marriage or losing other coverage.

Vocabulary

Flexible spending account
A workplace account that lets you set aside pre-tax pay for medical costs (or dependent care), usually lost if you don't spend it in the plan year.
Beneficiary
The person or group you name to receive an account, a trust or an insurance payout when you die.
Open enrollment
The yearly window when you can sign up for, drop or change health insurance and other benefits for the coming year.
401(k)
A retirement savings plan offered through an employer. Money comes straight from your paycheck, often with an employer match.

Work it out

Dana is single and expects about $800 of care next year. Plan A: $110 a month, $1,000 deductible. Plan B: high-deductible, $40 a month, $2,000 deductible, $500 employer HSA deposit.

  1. Plan A premiums
  2. Care she expects
  3. Plan A typical year
  4. Plan B premiums
  5. Care she expects
  6. Employer HSA deposit
  7. Plan B typical year

Check yourself

  1. A plan costs $90 a month and you expect $600 of care, all under the deductible. What is your typical-year cost?

    • A. $690
    • B. $1,080
    • C. $1,680
    • D. $2,160

  2. Which is generally true of a health FSA?

    • A. Unused money rolls over in full every year
    • B. Money left at year end can be lost, beyond any carryover your plan allows
    • C. It only works with a high-deductible plan
    • D. You can change the amount any month

  3. You have a baby in March. Can you add the baby to your health plan?

    • A. No, only during open enrollment
    • B. Only if you switch to a new plan
    • C. Only next year
    • D. Yes, a birth is a qualifying life event

Your turn

Find your open enrollment deadline and put it in your calendar. Then write down each health plan's yearly premium, deductible and out-of-pocket maximum, and figure a typical year and a bad year for each.

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Answer key

What to do during open enrollment

Work it out

  1. Plan A premiums$1,320
  2. Care she expects$800
  3. Plan A typical year= $2,120
  4. Plan B premiums$480
  5. Care she expects$800
  6. Employer HSA deposit− $500
  7. Plan B typical year= $780
  1. Premiums are $110 × 12 = $1,320 for Plan A and $40 × 12 = $480 for Plan B. Her $800 of care is under both deductibles, so she pays it all.
  2. Plan A: $1,320 + $800 = $2,120. Plan B: $480 + $800 − $500 = $780. Plan B saves $2,120 − $780 = $1,340 in a typical year.
  3. Bad year: Plan A's out-of-pocket maximum is $3,000 and Plan B's is $6,000. That is $1,320 + $3,000 = $4,320 against $480 + $6,000 − $500 = $5,980.

Check yourself

  1. C. $1,680 Premiums are $90 × 12 = $1,080. Add the $600 of care: $1,080 + $600 = $1,680.
  2. B. Money left at year end can be lost, beyond any carryover your plan allows FSAs are generally use-it-or-lose-it. Plans may allow a limited carryover or extra spending time, but not both.
  3. D. Yes, a birth is a qualifying life event A birth starts a special enrollment period. Job-based plans must give you at least 30 days to add your child.