Understanding Your Health Care Options for 2021

It may seem that 2021 is a long time from now, but decision-making on your health care coverage for the coming year must be done soon. Know the time frame for making choices and what those choices are.

Time frame for health coverage decisions

The type of coverage you have access to governs the time in which you must make your choices.

Employer-provided coverage. Generally, employers with group health plans must give you notice of your options for 2021 by early in October. The notice you receive should lay out:

• The type of plan(s) involved. This may include not only basic group health coverage, but also your ability to participate in a flexible spending account (FSA), a premium-only cafeteria plan to cover your share of premiums (in a group health plan or other type of plan), and health savings account (HSA). If you are age 65 or older, understand whether employer group coverage is your primary or secondary coverage, which depends on the size of the employer.
• Your salary reduction contributions. If you choose to be in an FSA and/or premium-only cafeteria plan, decide how much to contribute for the coming year. The notice will provide the information needed to make your decision (e.g., cap on FSA contributions for 2021).

Individual coverage through the Marketplace. Open enrollment for 2021 in the federal Marketplace runs from November 1, 2020, through December 15, 2020. Some states have different enrollment periods (e.g., the period in California and Colorado runs through January 31, 2021; District of Columbia, Nevada, and Pennsylvania through January 15, 2021).

Medicare. Open enrollment is from October 15, 2020, through December 7, 2020. However, for those attaining age 65 in 2021, enrollment runs for seven months, starting three months before the month of the 65^th birthday and ending three months after the month of the 65^th birthday.

Basic health care options from employers

You may be eligible for a company’s group health plan. The premiums may be fully or partially covered by the employer.

Alternatively, you may receive reimbursement from your employer for individually-obtained health coverage through a:

• Qualified small employer health reimbursement arrangement (QSERA). The reimbursement amounts are capped annually for individual coverage and family coverage.
• Individual coverage health reimbursement arrangement (ICHRA). The reimbursement amounts are fixed by the employer. Check the notice form you receive.

Supplemental health plans

Basic health coverage is not the end of the story for decision making for 2021. Other types of plans to consider include:

• Flexible spending accounts (FSAs) for medical expenses to cover certain out-of-pocket expenses.
• Health savings accounts (HSAs) to cover certain out-of-pocket expenses and/or save for the future.
• Supplemental Medicare insurance for Medicare beneficiaries with traditional Medicare coverage (not for those with Medicare Advantage plans) to cover insurance deductibles and co-payments not covered by Medicare.
• Excepted benefit health reimbursement arrangements (EBHRAs) to pay for vision, dental, or certain other care not covered medical insurance.

Conclusion

Health coverage is always important, but the pandemic has heightened awareness of the need for good coverage. Check your options and your budget to make informed decisions for the coming year. And watch the calendar so your decisions are timely.