4. Open enrollment isn’t important because the Marketplace is always available. Unfortunately, this is one of the misconceptions that can trip up individuals who need this health-care option the most. Open enrollment, which began Nov. 1 and runs through Jan. 31, 2016, is the primary opportunity get into the Marketplace. There are other special enrollment periods, but choosing to drop your health insurance plan isn’t one of those options. Qualifying life events that may allow Marketplace enrollment include moving to a new coverage area, a marriage, divorce or death in the family. Loss of insurance that wasn’t voluntary, for example, tied to loss of employment, also may qualify someone for a special enrollment period in the Marketplace.
The importance of exploring Marketplace alternatives is especially striking because of the trends we’re seeing for older workers.
First, annual health-care costs come in at higher levels. A comparison of companies with a higher percentage of older workers finds costs increase by 5-7 percent or more, according to Kaiser Family Foundation, which reported an average annual family premium of $17,425 in firms where 35 percent or more of workers were age 50 or older. This level of cost is simply too significant to fold into the family financials without a closer look, especially when the Marketplace may offer key cost reductions for clients.
Second, employers are altering their benefits programs and sometimes older workers are the hardest hit. More companies are exploring methods to reduce their health-care costs, and this includes changes to the benefits offered to dependents and workers. For example, more employers are only offering benefits to the worker and not dependents, especially if the dependents have an alternative coverage option. In addition, more employers are asking workers to pay a larger share of the health-care costs, either through higher premiums or by switching to high-deductible health plans with health savings accounts (HSAs).
Unfortunately, there may be limits with the Marketplace. For example, as long as the employee-only costs meet the ACA’s affordability standard, it does not matter how much dependents will have to pay for coverage. Also, dependents may not be able to access subsidies if they have the option for coverage, even if it costs more. This doesn’t negate the important opportunity to explore cost-saving alternatives through exchange plans.
Financial advisors and their clients may want to keep health insurance choices outside the parameters of their professional relationship, but it’s simply becoming too large of an elephant in the room to ignore any longer. Health-care cost decisions, including health insurance and treatment-purchasing decisions, have arrived as a discipline of financial planning. It’s important that financial planners become knowledgeable in this area and find the strategic partners who will augment their practice with expertise that benefits their clients’ short-term and long-term objectives.
Mary Dale Walters is senior vice president of Allsup Inc. Allsup and its subsidiaries provide nationwide assistance for individuals and business navigating the complexities of private and public health insurance benefits before and after retirement. Allsup Benefits Coordination is a nationwide healthcare benefits coordination service and the Allsup Medicare Advisor is a nationwide Medicare plan selection service, offered for a flat fee, that provide important analysis and serve as trusted resources for financial advisors and seniors. Financial advisors may contact (888) 220-9678 or go to FinancialAdvisor.Allsup.com for more information.