How to avoid costly open-enrollment mistakes

Open enrollment is always tempting to ignore. When those weighty health insurance booklets arrive demanding that you make important elections right before the holidays, millions of Americans set them aside and either decide to look later -- or never. Whether that's because they're happy with their employer-sponsored health plan and don't intend to change it or simply because they neglect the choices until it's too late, experts say ignoring open enrollment is becoming increasingly costly.

More than half of employees find that bad choices cost them about $750 per year -- roughly $62 per month. And those who keep the same plan as the previous year aren't exempt. That's because a lot could change under the hood of your health plan from year to year, said Matthew Owenby, senior vice president of supplemental insurance provider Aflac.

"People think that they've gone to the same doctor and had the same plan for years, so they don't even bother to check if that doctor is still in their network," he said. "They just don't realize that the plans themselves can change."

In fact, roughly two-thirds of the consumers who went to a doctor or hospital that was out of their health care network had no idea they were doing it, said Rebecca Madsen, chief consumer officer at UnitedHealthcare (UNH). Going to an out-of-network provider can result in higher out-of-pocket costs because you are essentially underinsured or even not covered.

Plans also can change co-payments, prescription drug coverage and other easily overlooked details that could also leave you with unexpected costs, she said. Taking a few minutes to review your plan now could help you sidestep these unexpected costs and potentially lower your future health care bills. Better yet, it doesn't necessarily have to be time-consuming. Madsen suggests that employees focus on just a handful of key items:

Changes: Look at  whether your plan has changed providers, deductibles or co-payments. Most plans will provide a summary of these changes. Besides reading through those changes and evaluating how they might affect you, make sure that all of your doctors remain "in network." 

And while you're considering changes, think of your own. Are you sicker or healthier than you were last year? Did you develop an illness, go on any sort of regular prescription? Did you have a child, or do you plan to in the next year? Big changes in your life suggest a more careful review of what's covered.

Costs: What did you spend on health care last year, and do you expect it to be roughly the same this year? If so, compare the options your employer provides side-by-side to see if an alternative plan could result in lower overall premiums, deductibles and co-payments. Look, too, at whether your plan offers mail-order pharmacy options, which can help people who have chronic ailments get their medications at a discount. 

Wellness programs and perks: Big companies have offered wellness discounts for years, often encouraging simple things like weight management and smoking cessation, as well as regular checkups. Those willing to partake typically get a small financial incentive. 

However, an increasing number of companies are offering targeted wellness programs that promise more lucrative rewards. Madsen said her company will provide up to $1,000 in discounts and incentives each year for employees willing to wear fitness trackers, for example. Other companies provide wellness assessments that let workers tap into tailored programs, such as stress- or sleep-management, for example. 

Those quit-smoking and weight-loss classes are available, too. But they're likely to be offered to those who seek out that specific benefit. Participating in these targeted wellness programs saves the average worker nearly $750 annually.

Other benefits: Also look into whether your employer offers tax-saving accounts that can help pay co-payments, deductibles and even child care expenses. While these benefit programs don't cut your out-of-pocket costs, they typically allow you to pay with pretax dollars, which reduces your annual tax bill.

If you're uncertain about how any particular piece of your plan operates, ask. Employers and health plans mobilize hundreds of benefit agents to field questions at this time of year. Asking a few pertinent ones now can save a whole lot of time, effort and money later.