The four most common errors individuals commit during open enrollment and strategies to prevent them.

The upcoming open enrollment period may not generate much excitement, but choosing your health and financial plans without proper knowledge could have significant consequences for the upcoming year.

A recent survey of 4,167 people from Justworks and The Harris Poll found that roughly half of millennials and Gen Z adult workers are unsure about their health-care insurance options and often make hasty decisions without fully understanding their choices.

Nearly half of those surveyed have regretted their health insurance choices.

Unlike other types of insurance, such as car or renters insurance, health insurance requires a 12-month commitment, with the exception of certain qualified life events.

Even experts make miscalculations that come back to haunt them.

Feinberg admits that he has made decisions that he regrets at a later date.

"Just like any budgeting process, you make the best decisions with the information you have about future outcomes. Unexpected events may occur or not, and if they do, things may work out better or worse. If the outcome is better, you may have been over-insured, or if it's worse, you may have to spend more than you planned."

During open enrollment, Feinberg highlights common errors individuals make with their health coverage and offers guidance on how to prevent them.

Waiting until the last minute

Feinberg advises against procrastinating on researching options during open enrollment season, as it can lead to making the worst decision.

The duration of your open enrollment period will vary depending on the source of your health coverage. For instance, the enrollment period for Affordable Care Act Marketplace plans is from November 1, 2024 to January 15, 2025. On the other hand, most employer-sponsored insurance plans usually commence their enrollment process in the fall and last for a few weeks.

"Ensuring individuals comprehend the consequences of this significant decision, which may affect their income and highest expense after rent, is crucial."

Utilize any resources provided by the HR department, such as print materials, Q&A sessions, and town halls, to gain knowledge about your available options.

Feinberg argues that making an uninformed last-minute decision is as effective as gambling, as it may result in a positive outcome, but it is an uneducated decision that often leads to regret.

Thinking the most expensive option is best

Feinberg says that people who make their elections at the last minute often believe that the most expensive option provides the best and most comprehensive coverage, which is a common misconception.

It's crucial to consider your unique health requirements and those of your dependents or partners when selecting a health plan.

Feinberg recommends asking yourself a few key questions to determine your needs:

• In the past year, what were the health-related expenses you incurred in terms of medical, dental, vision, and other wellness requirements?
• What procedures do you anticipate needing in the next year?
• What are your typical prescription drug costs?
• What is your risk tolerance? Could you cover unexpected health costs out-of-pocket?

HDHPs are preferred by Feinberg due to their lower monthly premiums and popularity among people with minimal health coverage needs. When paired with an HSA, the option offers flexibility in health insurance coverage, he notes.

Understanding and research are typically the highest level required for this type of health plan.

Ignoring HSAs and FSAs

It's worth considering learning about HSAs and FSAs, according to Feinberg, when it comes to savings accounts.

An HSA and a FSA are both types of accounts that allow you to use pre-tax contributions to pay for qualified medical expenses. However, there are some key differences between the two. To be eligible for an HSA, you must be enrolled in an HDHP, not be covered by Medicare, and not be claimed as a dependent.

Unless your employer permits you to roll over a certain amount, you must typically spend FSA money by the end of the year.

Thanks to their "triple tax benefit," HSAs are popular among those who qualify. Contributions are made with pre-taxed funds, which grow tax-free, and withdrawals for qualified medical expenses are tax-free.

Feinberg utilized the advantages of an HSA for himself: when his wife delivered their first son, he had funds saved to cover a private hospital room in New York City.

Not learning from your mistakes

It may take some time for young workers to become familiar with the health-insurance system and determine their annual requirements.

If you make a regretful decision in your coverage, it's important to learn from your mistakes, track the outcomes, and adjust your strategy during the next open enrollment season, according to Feinberg.

"Making decisions in the abstract can be risky, but going through a year with a regrettable plan can provide valuable real-life examples to consider how things might have turned out differently if different choices were made."

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