Pot o’ Gold Benefits

With St. Patty’s Day coming up, I’m thinking about leprechauns. We’d all love to have a leprechaun help us find a pot of gold. That’s especially true when thinking about healthcare costs. Traditional health plans save us pots of money (compared to being uninsured), and consumer-directed healthcare (CDH) accounts make those pots seem even fuller. In fact, having a CDH account can make you feel like you have the proverbial “luck of the Irish.” But what happens when you miss open enrollment? Do you have to forego these “pot o’ gold” benefits for a whole year?

Health Plans

If you were in a health plan and missed open enrollment, that plan may have automatically renewed. Even if it’s not the best fit for your needs this year, it is likely better than having no coverage. However, if you were eligible for first-time enrollment in an employer-sponsored group plan and didn’t choose one during enrollment, you are probably out of luck.

Gold Benefit Accounts

Many employers offer various optional benefit accounts either instead of, or to supplement, traditional group health insurance coverage. Some of these (but not all) are tied to open enrollment. Let’s look at the various account types and when you can and cannot enroll.

Health Savings Accounts (HSAs)

Health Savings Accounts require that you also enroll in an HSA-eligible high-deductible health plan (HDHP) to open an HSA. If you don’t enroll in an HDHP, you can’t enroll in an HSA, period. If your employer doesn’t offer an HSA, you may have the luck of being able to enroll in one through a local bank. Regardless of where you find an HSA, you can enroll anytime, during or outside of open enrollment.

Health Reimbursement Arrangements (HRAs)

Health Reimbursement Arrangements come in several different versions. Qualified small employers can offer QSEHRAs, and any employer can offer Individual Coverage HRAs. These two can start anytime outside of open enrollment for eligible employers and can be used to pay health insurance premiums and possibly certain qualified medical expenses. When offered outside of open enrollment, a Special Enrollment Period triggers for eligible employees.

Lifestyle Spending Accounts (LSAs)

While they may not cover Section 213(d) medical expenses, Lifestyle Spending Accounts (LSAs) can pay for various health and wellness-related expenses. Here’s an example: You overlooked open enrollment but need access to mental health support. While the LSA may not pay for sessions with a psychologist or counselor, you may be able to use LSA funds to cover a spiritual retreat, life coaching sessions, or meditation classes. LSAs are not subject to open enrollment period regulations, meaning they can start anytime during the calendar year.

Flexible Spending Accounts (FSAs)

Flexible Spending Accounts are employer-sponsored and subject to regulations like open enrollment. You must wait until the next enrollment period if you missed the enrollment deadline. If you wanted to change your contributions but missed the deadline, you’re out of luck again and must wait until the next enrollment period. However, if you have a qualifying life event, you can adjust your contributions to account for the life change, such as increasing your annual election after your family grows through a new birth or adoption, or decreasing your election if you have gone through a divorce.

What’s the bottom line?

Open enrollment is a critical time of year. Third-party administrators do their best to ensure that the employers they work with offer attractive benefits and that all of you get the necessary information and reminders. But life happens, and sometimes we’re just out of luck. The good news is that employers have other ways to support your health and well-being needs.

So if you’ve missed open enrollment, you can still qualify for some of those pot o’ gold benefit accounts. While traditional group plans and FSAs are only available during open enrollment, you can seek individual coverage on the Healthcare Marketplace or elsewhere and receive employer assistance through QSEHRAs or ICHRAs. If you have eligible HDHP coverage, you can open an HSA anytime during the plan year. Finally, employers may also offer financial assistance through LSAs at any point during the calendar year.