Open Enrollment for Employer-Sponsored Health Insurance

During open enrollment choose the best health plan option for you & your family

Medical professionals
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The majority of non-elderly Americans get their health insurance through an employer-sponsored plan. And many companies—especially larger employers—offer several health plan options that may have different costs and benefits. Your employer's annual open enrollment period is your opportunity to make changes to your coverage, and it's definitely in your best interest to take an active look at your coverage options during open enrollment, instead of just letting your existing plan auto-renew for the coming year.

Although employers can have health plan renewal dates that don't follow the calendar year, most employers choose to align their plan year with the calendar year. In that case, they'll generally schedule open enrollment for sometime in the fall, with changes effective January 1. Check with your company’s human resources department to find out when your open enrollment period begins and ends, and when enrollments or plan changes go into effect.

The length of open enrollment will vary depending on the company, but it usually only lasts a few weeks. If you miss your company’s annual open enrollment, you may not be able to enroll in your employer's health plan—or make changes to your existing coverage—for another year.

Choosing a Health Plan During Open Enrollment

Make sure to look carefully at all your health plan options to decide what plan is the best fit for you and your family. Many people choose the plan that has the least impact on their paycheck—the plan with the lowest premium. However, that may not be the best option for you.

Invest some time and do your homework!
Your company should provide you with written materials that explain your benefits. Many employers offer benefit plan meetings where you can ask questions about your health plan options. If you do not understand your insurance options, ask for help. Remember, once you make a decision, you may not be able to change plans until next year.

Understand basic health insurance terms
If you don’t understand the terms of your insurance it could cost you more during the coming year. Some important things to learn about are:

Examine your health care spending during the past year
Review the medical care and costs that your family used this year and think about changes in the healthcare services you may need in the coming year. For example, are you planning to have a child or was someone in the family recently diagnosed with a chronic illness such as diabetes?

Check to See if Your Healthcare Providers Still Accept Your Insurance
Before you fill out the paperwork to switch plans, confirm that your doctor, nurse practitioner, and hospital are part of the network for the health plan you are choosing. Your providers may not be in the network of the new plan, and this isn't something you want to find out later on, when you're trying to schedule a medical appointment. For that matter, it's important to check that your providers are still in-network even if you're opting to keep your current coverage since providers can come and go from insurance networks at any time.

5 Things to Watch Out for During Open Enrollment

Employers are trying to save money, especially as the cost of healthcare continues its relentless climb. One way to do this is to reduce health insurance benefits (ie, higher deductibles, copays, and total out-of-pocket costs) and/or shift more of the premium costs to employees. Make sure to carefully read your health plan materials, as you may find that your benefits and costs will change for the coming year, even if you make no changes yourself.

  1. Check to see if your dependents—spouse, partner, and children—are covered. Under the Affordable Care Act, all large employers (50 or more employees) are required to offer coverage to full-time employees and their dependents, but they are not required to offer coverage to spouses. Most employer-sponsored plans continue to be available to spouses, but surcharges apply in some cases, so be sure you understand how your employer's plan will cover your family members.
  2. Review any prior authorization requirements required by the plans. Under the Affordable Care Act, employer-sponsored health plans cannot impose pre-existing condition waiting periods (neither can individual market plans, with the exception of grandfathered individual plans), but insurers can and do still require pre-authorization for non-emergency care.
  3. If you take prescription medications, check them against the list of approved drugs (formulary) for the health plan (or plans, if there are multiple options) your employer offers. Also, if you take an expensive brand-name medication, find out the amount of the copayment or coinsurance for each medication on each available plan.
  4. If you or any family member needs ongoing physical therapy or has a mental health problem that requires therapy, review what your health plan will and will not cover. The ACA requires individual and small group plans to cover all of the essential health benefits without a dollar cap on the total amount the insurer will pay (although the insurer can impose limits on the number of visits they'll cover). But the essential health benefits requirements do not apply to large group plans, so be sure you understand the limitations of the plans you're considering.
  5. Check to make sure that you and your family have adequate coverage for emergencies if you are traveling either in the U.S. or in a foreign country. You may find that you need travel medical insurance during such trips, which is something you'll want to understand ahead of time.

The Effect of the Affordable Care Act on Your Benefits

Several additional provisions of the Affordable Care Act impact group health insurance. These changes, which you should know about when choosing a health plan provided by your employer, include:

  • You can keep your adult children on your health plan until they are age 26.
  • For services that are considered essential health benefits, health plans cannot impose dollar caps on how much they'll pay in a given year or over your lifetime. This applies to both large and small group plans; large group plans do not have to cover all of the essential health benefits—although most do—but to the extent that they do cover essential health benefits, there cannot be any lifetime or annual dollar caps on how much the insurer will pay for those services.
  • There are upper limits on the out-of-pocket maximum exposure that health plans can have, although these rules don't apply to grandfathered or grandmothered plans.

Some Tips From Dr. Mike

Typically, if you pay a higher premium, your annual deductible and copayments will be lower. Therefore, you may want to consider a plan with higher premiums and lower out-of-pocket expenses if you anticipate using a lot of healthcare services throughout the coming year. And, if you are young and healthy and do not have any children, you may want to choose a plan with low premiums and higher out-of-pocket expenses. 

But this generalization isn't always true—sometimes you'll come out ahead in terms of total costs by picking a lower-premium plan, despite the higher out-of-pocket costs, even if you end up having to meet the full out-of-pocket limit for the year. 

If your employer offers an HSA-qualified plan, give it careful consideration, especially if your employer will make a contribution to your HSA on your behalf. Once you factor in the tax savings, lower premiums, and employer contribution to the HSA (if applicable), you might find that the HSA-qualified health plan is the best choice, even if you're anticipating fairly high medical costs during the coming year.

Although your employer-sponsored plan is most likely your least expensive option and offers better coverage, you may be able to opt-out and shop around. Speak with a health insurance agent in your community or check out the plans available on HealthCare.gov. If your employer is offering affordable health insurance that provides minimum value, you won't be eligible for premium subsidies (premium tax credits) in the exchange. But depending on the plan your employer offers, whether your employer covers part of the premium for family members, and how much health care you anticipate using, it's possible that a plan purchased in the individual market could present a better value, so it's worth your while to check.

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Article Sources

Verywell Health uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial policy to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. Kaiser Family Foundation. Health Insurance Coverage of Non-Elderly 0-64. 2017


  2. Centers for Medicare and Medicaid Services. Center for Consumer Information and Insurance Oversight. Annual Limits.


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