What Is open enrollment?
Open enrollment is the period of time where you can enroll in your company-sponsored health insurance for the upcoming plan year. With Justworks, the plan year always starts on November 1st (or when your company signs up for health insurance with Justworks), and ends on November 1st of the following year. If you do not enroll in health insurance during the allocated open enrollment period, or if you choose to decline coverage, you won’t be able to sign up for coverage until the next open enrollment period (November the following year) unless you have a qualifying life event.
Health insurance glossary
We know there are a lot of insurance terms, so we've compiled this list to help you get a better understanding of all these complexities.
Benefit package: The primary document you’ll receive when you sign up for insurance. It’ll outline everything that your insurance is going to cover, spending limits, your spending requirements, information about physician visits, hospitalizations, and prescription drugs.
COBRA: In the event that you lose or leave your job, you are eligible to continue receiving your employer-sponsored insurance coverage for up to 18 months. This is a month-to-month plan set forth by the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) and can often times cost significantly more than what you were paying before, because you will need to cover the full cost of the monthly premium.
Coinsurance: The percentage of your medical costs that you are required to pay after you’ve reached your minimum deductible. For example, if you have a deductible of $1,500 and coinsurance of 20%, once you have paid $1500 of your healthcare bills, you are then required to pay 20% of all the bills you accrue for healthcare.
Copayment: A fixed fee that you are required to pay to doctors and other service providers at the time of receiving service. If a service is covered by insurance, you’re only required to pay the copayment amount, which is usually much less than the actual cost of the service. For example, you might have a $40 copay to see your primary care physician. Although doctor’s visits are covered by insurance, you will still need to pay $40 when you visit your doctor. Copayments may vary between services.
Cost sharing: Where you are literally sharing the cost of your healthcare with your insurance provider. Coinsurance, copayments, and deductibles are all examples of cost sharing.
Deductible: The amount you will have to pay for healthcare services before your insurance actually kicks in. If you have a $1,500 deductible, you will pay the full cost of your medical bills until they add up to $1,500. The exception is for services where only the copay is due, like routine doctors visits and annual checkups.
EPO plan: Exclusive Provider Organization Plan. As a member of an EPO plan, you can only visit doctors within a particular network and won’t necessarily have coverage outside of that network. Members don’t always need a recommendation to see a specialist.
FSA: Flexible Spending Account. An account that allows users to set aside a portion of their pre-tax income to pay for qualified healthcare expenses. Your FSA money can be used for copays, some medications and other medical costs, but not for insurance premiums. In the past, the FSA had a “use it or lose it” rule — if you didn’t use all of your FSA funds by the end of the year, you would lose it, but the Affordable Care Act allows for employees to carry over up to $500 into the following year.
HRA: Health Reimbursement Account. A tax-exempt plan to cover the cost of healthcare. HRAs are funded solely by employers and have no limits. A common misconception is that these are only available for high-deductible health plans, but that doesn’t have to be the case.
HSA: Health Savings Account. HSAs are similar to HRAs in that they are tax-exempt plans. But, HSAs must be paired with a high-deductible health plan and employees also contribute funds to the account. To be eligible for an HSA, your annual deductible must be at least $1,300 for individuals and $2,600 for families. Unlike FSAs, this money always rolls over and is never lost. This creates a situation where the money in your account can actually grow, which could be a positive when you reach retirement. Think of it like a retirement account for your body. This article has a ton of great tips and tricks about how to get the most from your HSA.
High-Deductible Health Plan: This is a healthcare plan that requires the individual to pay an upfront chunk of change before the insurance kicks in. The trade off to these sorts of plans is that the premium tends to be lower.
HMO: Health Maintenance Organization. With an HMO plan, you are generally required to choose a primary care physician. HMOs tend to require a referral from the primary care physician to see a specialist, also within network.
In-Network cost: The cost for you to see one of the doctors that have pre-arranged agreements with your insurance company so definitely accept your insurance.
Lifetime benefit maximum: The total amount of money an insurer will pay over the entirety of an insurance policy.
Mandatory benefits: Types of benefits or services that health insurance organizations are mandated to cover by the state. These benefits vary by state, but a common example of a mandatory benefit is mammograms.
Out-of-Network cost: The cost for you to see a doctor that is not in the network covered by your healthcare plan. Out-of-network costs are generally higher than the cost of a service within your network and, depending on your plan, can be the full cost of the service.
Out-of-Pocket costs: All your deductibles, copayments, and coinsurance that are not covered by your health insurance provider. Premiums are not considered out-of-pocket costs.
Out-of-Pocket maximum: The maximum amount you are required to pay for healthcare costs under your plan, not including premiums. For example, you have a deductible of $1,500 and a 20% coinsurance up to a maximum of $5,000. Once you’ve paid a total of $5,000, you won’t have to pay another penny for the remainder of the year, even if you had a catastrophic accident that cost $100,000.
PPO: Preferred Provider Organization. Your typical healthcare plans where you have physicians that are in-network and out-of-network and the costs vary depending on who you see.
Premium: The amount of money you and/or your employer pay monthly for health insurance. Sometimes employers will cover the entire cost of premiums, or sometimes they will contribute a percentage of the premium or a fixed amount per month.
Preventive care: Services that are intended to keep you healthy and prevent health issues and illnesses becoming a more serious (and more expensive) problem. For example, routine physical checks and regular visits to the dentist. Depending on your plan, preventive care services are usually more affordable services and are sometimes completely covered by insurance providers.
Primary care provider: Your day-to-day doctor who is responsible for your overall health. This provider may help coordinate other doctors, like specialists, that you need to see.
Qualifying life event: A life changing event such as: marriage, birth of a child, adoption of a child, separation/divorce, death in the family, or an employee turning 26, that allows for enrollment in health insurance outside of open enrollment.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.