Kelln Small: What Most Employees Miss When Choosing Health Plans

Navigating health plan options during open enrollment can be overwhelming, especially with the wide range of choices and fine print involved. Employees fall into common traps—choosing plans based on surface-level costs or sticking with old selections without reviewing updates.

Many select a health plan based primarily on the monthly premium without considering the bigger financial picture. While a lower premium might look appealing, it doesn’t always mean lower overall costs. As Kelln Small notes, plans with smaller monthly payments often come with higher deductibles and greater out-of-pocket expenses when care is actually needed.

Take two plans with a $50 difference in monthly premiums—on the surface, the cheaper option might seem like the smarter pick. But when someone needs regular prescriptions or sees a specialist several times a year, the added costs can outweigh the initial savings. In some cases, just one unexpected medical procedure can erase all the perceived savings from a lower premium plan.

Matching the Plan to Personal Needs

Choosing a health plan without considering your unique medical needs can lead to frustration and higher costs. Someone with a chronic condition, such as diabetes or asthma, will likely require a plan that covers regular doctor visits, lab work, and prescriptions with manageable copays. A plan that looks affordable on paper may fall short when it comes to actual coverage.

Health plan types also play a big role. HMOs typically require referrals and limit provider options, while PPOs provide more flexibility but often come at a higher cost. High-deductible health plans may suit someone who rarely visits the doctor, but they can quickly become expensive if unexpected issues arise. People with ongoing treatments or a history of unexpected medical events should weigh the risk of out-of-pocket costs carefully.

Prescription coverage is another critical area often underestimated. A plan that doesn’t include the necessary medications in its formulary or classifies them in a higher pricing tier could result in hundreds of dollars in extra spending. Reviewing the drug list and tier levels in advance can prevent frustration at the pharmacy counter.

Overlooking Employer Contributions and Tax-Saving Accounts

Many employees miss out on valuable savings simply by not factoring in employer contributions to HSAs or FSAs. These accounts can offset costs, especially in plans with higher deductibles. When an employer adds funds to your HSA, it’s essentially free money that can be used for qualified medical expenses. These contributions can build up over time and carry over year to year, boosting your healthcare budget.

Besides the upfront benefit, HSAs offer long-term value through tax advantages. Contributions are pre-tax, funds grow tax-free, and withdrawals for medical expenses are also tax-free. FSAs can also be useful, though they often have stricter rules and use-it-or-lose-it policies. Still, when used strategically, both options can reduce taxable income and improve the overall affordability of care. Many people don’t realize these accounts can also cover dental and vision expenses, adding even more value when fully utilized.

Ignoring Provider Networks

One of the most common oversights when choosing a plan is failing to confirm whether preferred doctors and hospitals are in-network. Out-of-network care often comes with much higher costs, and in some cases, it may not be covered at all. A plan that seems comprehensive on paper loses value quickly if it doesn’t include your trusted healthcare providers.

Sometimes people assume that a well-known insurer automatically includes their favorite clinic or specialist, only to be surprised after receiving a large bill. Taking just a few minutes to check the network can prevent both inconvenience and financial strain down the road.

Network size and accessibility also matter. A narrower network might save you money, but it could mean driving farther for care or waiting longer for appointments. Balancing cost with convenience is key to making a plan work. Some networks may also exclude top-rated hospitals or specialists, which can be a concern if specialized care is needed.

Skipping the Review of Annual Plan Changes

Each year, employers and insurance companies make adjustments to health plans. These changes can affect premiums, deductibles, provider networks, prescription coverage, and more. Assuming last year’s plan is the same can lead to unexpected costs or coverage gaps.

Even subtle plan shifts—like moving a commonly used medication to a different pricing tier—can impact your budget. During open enrollment, taking time to read the updated summary of benefits can reveal changes that affect your care or expenses. Some changes may not be prominently announced, so looking closely at the fine print is essential to avoid surprises.

Some employees stick with their current plan out of habit, but a quick review can reveal better options or highlight adjustments that make switching worthwhile. A little attention now can save a lot later.

Tools and Resources Employees Often Miss

Many workers overlook resources designed to simplify health plan decisions. Online comparison platforms, cost estimators, and provider lookups can make it much easier to understand what each plan offers and how it matches up with individual needs.

Speaking with HR or benefits representatives can also uncover helpful insights. They often have access to plan details or examples that aren’t obvious in the paperwork. When there’s uncertainty, a quick conversation might clarify how a plan handles specific situations like surgeries, therapies, or specialty medications. These discussions can also help clarify any confusing terminology or plan limitations that might otherwise go unnoticed.