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Don't mess up this year: Avoid health insurance open enrollment errors

Just over three-quarters of American workers who make decisions about health insurance during their employers' annual open enrollment periods say they make costly mistakes, a new survey has found.

Businesses shouldn't wait until open enrollment begins to educate their employees about what to look for in the health insurance plans, says Joe Bohling, senior vice president of human resources at Aflac, the insurance company that commissioned the survey.

mom-with-daughtersHowever, most businesses--like most employees--wait until close to the deadline before tackling open enrollment questions. By then everyone is rushed, especially when open enrollment happens near the end of the year and the holidays are approaching. When you're in a hurry, mistakes are more likely to happen.

Here are five common mistakes employees make when choosing medical insurance and how you can avoid them:

  • Ignoring the open enrollment guide. Most employers make their annual open enrollment guides available online or through the mail. Some drop them off at your desk or cubicle. "A common mistake is to look at the guide and say, 'It's fairly thick. I'm not going to spend time to read it. I'll just let my benefits roll over,'" Bohling says. Chances are good that your employer has made some changes to its medical insurance coverage offerings. You should at least be aware of what they are and how they might affect your selections. Take the time to read the guide so you're not unpleasantly surprised when you need care.
  • Not asking for help from your human resources department. If you read the guide and have questions, seek answers, Bohling says. "A big mistake lots of employees make is not reaching out to someone in HR to get those questions answered."
  • Choosing a health insurance plan that doesn't include your doctors. If you didn't check the open enrollment guide, you may not realize that your current doctors are no longer part of your plan's network. If you still want to see those doctors, find out whether they are part of another available health plan option. You may be able to choose a plan that will enable you to go outside the network. Also, be sure to check your options to determine which plan provides the best coverage for your medications.
  • Not taking advantage of flexible spending accounts. Flexible spending accounts (FSAs) allow you to use pre-tax dollars toward out-of-pocket medical expenses such as co-pays and deductibles. FSAs can cover optometry costs or the co-pays on your medication. You don't want to overfund your FSA because you lose the money you don't spend at the end of the year. But you don't want to underfund it either, Bohling says.
  • Being underinsured or overinsured. In this shaky economy, many people are living paycheck to paycheck with very little savings, Bohling says. A major medical expense could wipe them out. If your employer makes supplemental coverage for accidents or serious illnesses available to you, consider your circumstances, Bohling says. At the same time, you don't need double coverage. Check what your medical insurance covers before buying supplemental medical insurance, which generally pays a lump sum if you're diagnosed with a critical illness such as cancer.

Harris Interactive conducted the online survey of 2,220 U.S. adults in August. Of the respondents, 980 were employed full time or part time and responsible for medical insurance decisions.

More from Beth Orenstein here

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