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What you need to know about enrolling for 2021 health benefits

Ines Ferré
·Markets Reporter
·2 min read

Open enrollment for health benefits begins on November 1, 2020, with those benefits kicking in on January 1, 2021. However, this year’s outlook looks different with millions still out of work during the coronavirus pandemic. Jean Chatzky, CEO of HerMoney, joined Yahoo Finance’s The First Trade to discuss three key ways to navigate open enrollment this year.

Read more: How to choose a health insurance plan: The full breakdown

1) Let your past experience be your guide

Your past health history should serve as a guideline — even amid the pandemic.

“COVID is a problem. It's an outlier. But in fact, 75% of the health care spending in this country, every single year, goes to taking care of people who have chronic diseases,” Chatzky said.

“If you've got asthma, if you've got Type 2 diabetes, you know what your expenses are going to be every year. And that should be your guideline for picking a health plan,” she said.

2) Research and evaluate different plan options

“We spend so much more time buying a television or planning a vacation than we do choosing health insurance,” said Chatzky.

Meanwhile health plans “cost significantly more, but have such a greater impact on our future when you consider that every single year more bankruptcies are caused by medical emergencies than than anything else,” she added.

3) Consider PPO vs HMO plans, and take advantage of HSA money!

Because of high unemployment, many people’s choices this year will be determined by cost.

“What we've seen is a huge growth in the number of people who are opting for high deductible health plans, where the premiums are lower and you put some money into an HSA (Health Savings Account) that will allow you to pay for a lot of your health care expenses with pre-tax dollars,” said Chatzky.

She recommends evaluating the trade-offs between a more traditional plan, or a high deductible health plan, which could be an HMO or PPO along with a health savings account (HSA).

“A lot of HSAs don't even get opened each year, which means that those incentive dollars are being left on the sidelines. And this is kind of the equivalent in the financial world or the retirement world of leaving matching dollars in a 401K on the sidelines,” said Chatzy.

“You absolutely don't want to do that. You want to look at what you can capture in terms of that free money and grab it,” she said.

Ines covers the U.S. stock market. Follow her on Twitter at @ines_ferre

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