It’s that time of year—time to enroll in health insurance. If your employer has offered you health insurance coverage, you are in the right place. We’ve built this guide to take the guesswork out of the enrollment process and help you find the right coverage with confidence. We’ll walk you through the basics of different medical plans, their costs, and how to compare your employer’s coverage with any other plans you might be considering. Whether you’re renewing or choosing coverage for the first time, we’ve got you covered!
First up: Are you qualified to enroll?
Many people assume they’re not qualified to enroll in new coverage with their employer if they have existing coverage. Luckily, individuals are eligible to change benefits under a qualifying life event (QLE) anytime during the year. QLEs are events insurance carriers consider to be a valid reason to change benefits outside of open enrollment — including being offered group coverage as a new employee or through your company’s open enrollment. Other common QLEs include marriage or divorce, birth or adoption of a child, and moving in or out of a service plan area.
What should you consider when choosing a health insurance plan?
There are a lot of factors to take into account when choosing a health insurance plan, not least of which are your finances and unique health needs. Here are some considerations to keep in mind:
Your monthly budget for health coverage: How much can you afford to pay every month for premiums?
Your overall finances: How much financial wiggle room do you have to cover out-of-pocket health expenses and emergencies?
Your coverage needs: Are you just covering yourself or looking to cover your entire family?
Potential employer coverage: Does your employer provide health coverage for you or you and your family? Does your spouse’s employer?
Personal health care needs: What’s your current health condition? How often do you require medical care? Do you take regular prescription drugs or need regular health services?
Family health needs: How is your family’s health? Do you have loved ones who need special medical services, take regular prescriptions, or require more regular health care services?
Provider flexibility: Are your preferred doctors and specialists considered “in-network,” meaning they’re covered under your health insurance plan? Do you want more flexibility to visit providers outside your network?
Peace of mind: How comfortable are you with different levels of coverage? Some people prefer to pay more in exchange for more peace of mind, while others don’t carry much health-related stress.
Understanding health insurance plan basics
Shopping for health insurance doesn’t have to be overwhelming. Focus on three main things when choosing a plan: types of plans, metal tiers, and service costs (outlined in the Summary of Benefits and Coverage, or SBC). Let’s break it down:
Plan types: Which plan and network are right for you and your family?
Metal tiers: How much are you comfortable paying each month, and how much coverage do you need?
Service costs: What services will you or your family need this year? Check the SBC to confirm if those services are covered, and what percentage is paid by insurance.
Considering these three factors will help you select the plan that best balances the level of coverage you need with cost.
Plan types
There are four common types of health insurance plans, each designed for different needs. You can find your plan type in your Summary of Benefits or listed in Gusto. Here’s a quick overview:
Plan Type | Premiums | Flexibility | Primary Care Doctor Needed? | Specialist referral needed? | Health Insurance Network* Size | Covers Out-of-Network Costs? | Best For |
HMO | Lowest | Low | Yes | Yes | Smallest | No (except emergencies) | Those who don’t need a lot of specialist care and prefer lower costs. |
POS | Medium | Medium | Yes | Yes | Varies | Yes (but the plan will cover a smaller percentage of the cost) | People who rarely need specialists but want flexibility. |
EPO | Medium | High | Sometimes | Sometimes | Larger | No (except emergencies) | Those who want a balance between lower costs and more provider options. |
PPO | Highest | Highest | No | No | Largest | Yes (but the plan will cover a smaller percentage of the cost) | People who need regular specialist or hospital care and want flexibility. |
*What’s a health insurance network? It’s a group of healthcare providers contracted by your insurance plan to offer services. In-network providers typically cost less than out-of-network ones. Always check your SBC for details!
Metal tiers
Health insurance plans come in four metal tiers: Bronze, Silver, Gold, and Platinum. These don’t reflect the quality of care, but rather how you split the cost with your insurer. Here’s what you need to know:
Metal Tier | Premiums | Coverage | Out-of-Pocket Costs | Best For |
Bronze | Lowest | Lowest | Highest | Healthy individuals who don’t use much healthcare and can handle higher out-of-pocket costs for unexpected events. |
Silver | Medium | Medium | High | Those who want a balance between coverage and costs and don’t mind paying a bit more for peace of mind. |
Gold | High | High | Medium | People with medical conditions or those who need frequent care and want lower out-of-pocket costs. |
Platinum | Highest | Highest | Lowest | Individuals who expect to use health insurance frequently and want the best coverage available. |
Summary of Benefits and Coverage (SBC)
The SBC gives you the important details about a health plan, such as costs, covered services, and exclusions. You’ll want to review these key points:
Deductible: The amount you pay before insurance kicks in.
Out-of-Pocket Maximum: The most you’ll pay in a year before insurance covers the rest. If you expect to have costly health services, like major surgery, a lower out-of-pocket maximum can help reduce your costs. Most plans will indicate a maximum cost for individuals and for families (individual + enrolled dependents).
Co-pay: A set amount you pay for services like doctor visits or prescriptions. If you plan to have many doctor visits or prescriptions, a lower copay may help you save.
Covered Services: Make sure any specialists you need are covered, or you can expect to pay out-of-pocket.
To dig in further on how to find the SBCs in the Gusto app and how to understand the SBC info, check out Gusto’s Guide to your medical benefits.
How to compare your current plan to your employer-sponsored plan
If you already have coverage through a spouse, parent, or the individual marketplace, it’s time to compare your options. Here’s how:
Compare the policies: Compare your current SBC through your spouse’s plan with the SBC of the plans offered during your company’s open enrollment in Gusto.
Check who’s paying: Look at the balance between what the employer contributes and what you’ll pay for both your and your spouse’s plan. Many companies cover at least 50% of the premium for their employees and less for dependents, but the specifics can vary.Example:
Your Employer-Sponsored Plan | Your Spouse’s Employer-Sponsored Plan | |
Type | Gold PPO, Anthem | Silver PPO, Blue Shield of California |
Deductible | Individual: $1,500Family: $3,000 | Individual: $2,350Family: $4,700 |
Co-insurance | 30% | 40% |
Out-of-pocket max | Individual: $8,100Family: $16,200 | Individual: $8,750Family: $17,500 |
Copay | $5/visit$65/visit – specialist | $65/visit$80/visit – specialist |
Monthly premium | $400 for your coverage$400 for your spouse | $350 for your spouse$350 for your coverage |
Employer coverage of premium – primary holder | 75% or $300 | 100% or $350 |
Employee responsibility of premium – primary holder | 25% or $100 | 0% or $0 |
Employer coverage of premium – dependents | 75% or $300 | 25% or $87.50 |
Employee responsibility of premium – dependents | 25% or $100 | 75% or $262.50 |
Things to consider in this example:
The network: The plans are similar, so you may want to consider the network. Do you really enjoy your current doctor or specialists? Are they covered by both carriers?
Copay: Your current plan requires $65 copay for each doctor visit, while your new, employer-sponsored plan has a $5 copay.
Employer vs Employee paid premiums: You are covered at 75% on your plan, but only 25% on your spouse’s plan.
Amount paid towards deductible and out-of-pocket max. The deductible is the amount you pay before insurance begins covering costs, while an out-of-pocket maximum is the limit on how much you pay for covered services before insurance covers the rest. Both of these amounts will be reset to $0 if you switch plans, which could end up meaning you pay more during the plan year. Check to see how much of your family’s deductible & family out-of-pocket maximum you’ve contributed to thus far this year to understand any tradeoffs.
Total monthly costs for coverage: If it is just you and your spouse that need coverage, you’ll pay $262.50 per month to get coverage through their plan, but only $100 per month if you move to your employer-sponsored plan and your spouse remains on their employer-sponsored plan. These totals correspond to the employee premium responsibilities for the primary holder and dependents.
Next steps: Enroll or waive coverage
Once you’ve made your decision, you can easily enroll or waive coverage through Gusto. Here’s what to do:
If you’re switching plans: Log into Gusto, select your new plan, and we’ll handle the rest! Make sure to notify your current carrier that you’re dropping your old coverage by submitting a qualifying life event.
If you’re keeping your current coverage: Simply log in to Gusto and opt out. You’ll need to provide a reason, such as having existing coverage through a spouse or the marketplace. Be as specific as possible to prevent delays with your company’s open enrollment. In some cases, Gusto may need to provide “proof” of your existing coverage, so be prepared to enter your existing coverage member ID or upload a copy of your ID card as part of the process.
Why choose employer-sponsored health insurance over an individual plan?
Employer-sponsored plans have some big advantages:
Get better coverage: These plans often include dental, vision, and mental health services that marketplace plans might not. Furthermore, employer-sponsored plans typically provide access to a broader network of providers.
Save with pre-tax deductions: Your premium is taken out of your paycheck before taxes, lowering your taxable income, effectively increasing your take-home pay.
Get more predictable costs: Unlike marketplace plans, which can change year to year, employer-sponsored plans tend to offer more stable rates.
Simplify enrollment: Gusto makes the process quick and easy, so you don’t have to spend hours comparing plans on the marketplace. Plus, our all-in-one platform means you get to go through open enrollment in a digital-first system you already know and trust.
Choosing the right plan for health insurance can feel complicated, but it doesn’t have to be. With Gusto, you have the information and support you need to make the best choice for you and your family.
FAQ
Will my preferred doctors and hospitals be covered under the plan?
Whether or not your preferred doctors and hospitals will be covered under your health insurance plan depends on which plan you choose—and whether or not the specific doctors are in your plan’s network. You can find out what’s covered by visiting your health insurance company’s website and looking for a tool like “Find a Doctor” or “Find a Provider.” Then you’ll be able to search the name.
What are the total costs—including premiums, deductibles, copays, and out-of-pocket maximums?
Your total health care costs depend on your plan type, how often you go to the doctor, and the specific care you end up requiring. Bronze plans, for example, will have lower premiums but higher deductibles and copays. If you don’t end up going to the doctor often, your total costs will stay fairly low with a Bronze plan; on the other hand, if you end up needing more medical care than you anticipated, your total costs could rack up with higher out-of-pocket medical expenses. On the opposite end of the spectrum, Gold plans have higher monthly premiums but lower out-of-pocket expenses, which make them a more cost-effective option (though still not necessarily the cheapest) for people who require regular medical care.
Are my prescription medications included in the plan, and what will they cost?
Prescription medications might be included in your health plan—it depends on your plan type and particular prescription. Prescriptions fall into different drug tiers categorized by health insurance companies. Tier 1 drugs, which include generic brands and preferred brand-name drugs, are the cheapest. Tier 2 drugs are more expensive, but include generic brands and some brand-name drugs. Tiers 3 and 4 include specialty drugs and treatments, which is why they come with the highest price tag.
You can find out if your prescriptions are covered by visiting your health insurance company’s website and using their formulary or “drug look-up” tool to search for your prescription.
Do health insurance plans come with additional benefits like wellness programs, and how is the insurer’s customer service?
Yes, some health insurance plans do offer additional health benefits. Think: health coaching, discounted gym memberships, nutrition advice, stress management support, digital wellness subscriptions, discounted massages, and preventive care. You’ll generally pay more to access these benefits, though. Check with your health insurance provider to find out which benefits they offer beyond basic care.
As for the customer service at different health insurance companies, there’s a wide range you can expect. Certain health insurance companies are known for their excellent customer service, while others are notorious for being difficult to work with. Ask friends and family about their personal experiences, or check out an insurer’s online reviews.
