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Open enrollment begins Nov. 1st, here's what you need to know

Jean Chatzky, HerMoneyMedia CEO & Co-Founder, joins Yahoo Finance's The First Trade with Alexis Christoforous and Brian Sozzi to discuss how the 2020 open enrollment season may be different and what you should do to maximize your health insurance offerings.

Video Transcript

BRIAN SOZZI: OK, it's that time of year. Open enrollment season is upon us. But this time around, looks a little different, with millions still out of work while in the midst of a public health crisis. Want to bring in HerMoney Media CEO and co-founder, Jean Chatzky, to discuss the latest in our "Financial Advisors Corner" presented by Pimco. Jean good to see you this morning. So what should people be doing differently this year versus last year?

JEAN CHATZKY: Well, I think it's important every year. And by the way, it's nice to see you guys. Thanks for having me. I think it's important every year to really go through the process of shopping around. Research has shown in the past that we spend so much more time buying a television or planning a vacation than we do choosing health insurance.

And our health plans not only costs 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 anything else. So figure out the lay of the land. Figure out what you use in terms of health insurance, and then go through a process to evaluate the different options that you have.

ALEXIS CHRISTOFOROUS: Jean, it's such a tough time to evaluate. How does one evaluate? There are so many question marks with this pandemic. People who might have had situations where they can pretty much figure out what their health care costs are going to be every year, have to sort of now bake something else in, because they just don't know if they might, they or a loved one might get sick next year. So how do you sort of cushion yourself when you're looking at your options?

JEAN CHATZKY: Yeah, first of all, I think you absolutely do want to let your past health experiences be your guide. I mean, 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. So if you've got asthma, if you've got type 2 diabetes, I mean, you know what your expenses are going to be every year. And that should be your guidelines for picking a health plan. Many people this year, because unemployment is raging, are going to need to allow their choice to be determined by what they can afford.

And 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 that will allow you to pay for a lot of your health care expenses with pre-tax dollars. An HSA is a health savings account. And so essentially, you want to evaluate are you better off with an HMO or a PPO, a more traditional plan? Or a high deductible health plan, which could be either an HMO or PPO, with one of those health savings accounts?

BRIAN SOZZI: Jean, what are some overlooked employee health benefits that people should be looking out for. right now?

JEAN CHATZKY: A lot of employers these days have stepped up to offer wellness benefits, to offer incentives for participating in things like health savings accounts. And it's an important time to really check out your benefits manual and see what is available to you for these programs. We know that in particular, when we look at HSAs, 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 401(k) on the sidelines. 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.

BRIAN SOZZI: All right, let's leave it there. HerMoney Media CEO and co-founder, Jean Chatzky, good to see you. And thanks for making sense of all this.

JEAN CHATZKY: Sure, my pleasure.