What is Open Enrollment? And How It Works

It’s that time of year again.

Open enrollment is when you can sign up for health insurance, make changes to your plan, or cancel your plan—whether that plan is through your job, Medicare, or the Affordable Care Act (ACA) marketplace. It’s important to be prepared for it because it only happens once a year, and if you miss it, you may have to wait until next year if you want to adjust your health insurance plan.

Here’s everything you need to know about open enrollment.

How long is open enrollment?

Your open enrollment period depends on where you get your insurance from. For ACA Marketplace plans, open enrollment is running from Nov. 1, 2024 to Jan. 15, 2025 in most states (some states have different periods). For Medicare plans, it’s running from Oct. 15, 2024 to Dec. 7, 2024. The open enrollment period for employer-sponsored insurance plans varies, but typically, it starts in the fall and lasts for a few weeks.

How do I prepare for open enrollment?

Before making changes to your plan, make sure you review your existing plan. Consider your current medical needs, and assess if there are things you need that your plan isn’t covering.

Try to think about what medical needs you may have in the coming year. Obviously, there will be situations you won’t be able to predict, but if you know that you’ll be having medical procedures done or will need medications, for instance, take that into account. 

Who should choose a high-deductible plan?

High-deductible health plans (HDHPs), just as they sound, have higher annual deductibles than other health plans—that means that you’ll have to pay more out-of-pocket costs before your insurance will start covering medical expenses. That being said, many HDHPs fully cover in-network preventive care even before you hit your deductible, so you wouldn’t have to pay out-of-pocket for those kinds of services (for instance, a routine annual physical), but you would have to pay out-of-pocket for non-preventive care, like visits to urgent care, if you haven’t hit your deductible. HDHPs also have lower monthly premiums, which is the amount you pay each month for your health insurance.

Generally speaking, if you’re relatively healthy and don’t expect to have a lot of medical needs—for instance, if you typically only have routine physicals or preventive care appointments—an HDHP might be a good option for you.

Who should not choose a high-deductible plan?

For some, the con of HDHPs is that you have to pay out-of-pocket for non-preventive care until you hit your deductible. If you expect to have more non-preventive care needs—for instance, you’re planning on having a baby soon or you have a chronic condition for which you’re undergoing treatment—an HDHP may not be the best option for you. Also, if you know that you wouldn’t be able to afford the plan’s full deductible if you had a medical emergency early on in the coming year, you may want to consider other health insurance plans instead.

What is an FSA?

FSA stands for Flexible Spending Account (sometimes Flexible Spending Arrangements), which is an employer-owned savings account that allows employees to reserve a portion of their pre-tax income for eligible medical expenses. Some employers may also make contributions to your FSA.

The money in the account usually has to be used within your health insurance plan year, but employers sometimes provide a grace period that can last up to an additional two and a half months or allow you to carry over up to $640 to the next year.

The amount of money you decide to contribute to your FSA will be available for you to use as soon as your plan coverage starts. But you generally can’t adjust how much money is in the account until the following plan year. There’s also a limit to how much you can contribute to your FSA per year, which can change from year to year.

What is an HSA?

HSA stands for Health Savings Account. Like an FSA, an HSA allows you to save money before taxes to pay for qualified medical expenses. You have to be covered under an eligible HDHP in order to contribute to an HSA. Your employer can contribute to your HSA as well. But unlike an FSA, an HSA is employee-owned, meaning that it’ll stay with you even if you change jobs. The money in your HSA also stays in there even if you don’t use it up by the end of the plan year, allowing you to save up to pay for medical needs that may come up further down the line.

Unlike an FSA, the funds in your HSA accumulate throughout the plan year, so you can only use the amount that you’ve contributed to date. That said, you can change your contribution amount at any time during the year. HSAs also have a limit to how much you can contribute per year, depending on a variety of factors.

When can I enroll in Medicare?

Most people enroll in Medicare—Part A, which is hospital insurance, and Part B, which is medical insurance—when they first become eligible for it, which is generally at the age of 65. That’s called the Initial Enrollment Period. The Initial Enrollment Period lasts for seven months, typically starting around three months before you turn 65 and ending about three months after your 65th birthday. You can look up your birth date on the Social Security Administration’s website so you can see the earliest date you can sign up.

If you miss your Initial Enrollment Period, you may also be able to sign up for Medicare, without paying a penalty, during a Special Enrollment Period, in certain qualifying situations—for instance, if you have or had health insurance coverage from your job (learn more about the Special Enrollment Period on Medicare’s website).

If you miss both those periods, you can sign up for Medicare in the General Enrollment Period, between Jan. 1 and March 31 each year, though that may carry some kind of monetary penalty.

What are the requirements for Medicare?

To be eligible for Medicare, you either have to: be 65 or older, have a disability, have End-Stage Renal Disease, or have ALS (also known as Lou Gehrig’s disease). Medicare also has residency requirements, but people who are non-U.S. citizens may still qualify, if they meet certain requirements.