How to Fill the Gaps in Your Health Insurance 

This Open Enrollment Period

In a normal year, open enrollment is merely an afterthought for many people. Just another box to check off in your busy life. But 2020 has been anything but normal.

If you are able to pick and choose from employer-sponsored benefits options this year, you are quite fortunate. After all, you probably know someone who has lost their job and quickly found out just how expensive it is to purchase the same benefits they had through work on their own.

You also may be suffering from sticker shock, with costs on the rise and no end in sight. That’s why now, more than ever, it’s important to take the time to carefully consider all of your health insurance options — including ways to fill the gaps in your coverage. 


How much more will benefits cost?

By definition, insurance is the shared risk of a group of people paying monthly premiums for protection against the unexpected.

The U.S. Small Business Administration (SBA) has provided an overview of how a larger risk pool can result in lower premiums. When more people are enrolled in a group plan, the risks are spread out more evenly across all of the plan members.

Since enrollees in the group plan pay premiums, the insurance company has more funds available to pay claims when group members need medical care. Consequently, the high cost of any one member needing care is balanced out by the larger pool of premium-paying group members.

Not so for smaller businesses enrolling fewer employees in a group insurance plan. The insurance company is collecting lower premium amounts, and one large claim can dramatically impact that group’s profitability for the insurance company in a negative way, which may result in their rates being raised the following year.

What does this mean for employees in 2020 and 2021? Group sizes have shrunk because of layoffs and terminations at companies. The number of employees paying premiums each month is fewer, meaning insurance companies are at greater risk financially with large claims. They lessen their financial exposure by raising group rates to collect larger monthly premiums, lowering their risk.

For employees facing rising costs, it’s important to make the most prudent decisions you can this enrollment period. Here are some actionable tips to help you do just that.


Carefully examine your all available options

According to a study conducted by Kaiser Family Foundation from January to July of this year, employees are now contributing just under $600 per month toward family coverage costs. Employee costs have continued to rise for years and show no signs of slowing down. 

Procedures people have delayed having performed in 2020 may very likely need to be performed in 2021, increasing employee claims and leading to even larger premium increases next year.

How can you combat the rising costs of health insurance premiums? Here are a couple of suggestions:

  • Select a high deductible health plan (HDHP). According to, the IRS defines a high deductible health plan as any plan with a deductible of at least $1,400 for an individual or $2,800 for a family. An HDHP’s total yearly out-of-pocket expenses (including deductibles, copayments, and coinsurance) can’t be greater than $6,900 for an individual or $13,800 for a family. (This limit doesn’t apply to out-of-network services). The higher your deductible, the lower your premium.
  • Change your coinsurance ratio. This is the percentage you’ll pay after you meet your deductible. A standard ratio is 80/20, where the insurance company picks up 80% of the claim, and you pay 20%. Consider changing that ratio to 70/30, which will reduce your monthly premium because you’re assuming a larger percentage of the claim payment.

While this can help you cut costs on the premiums pay each month for now, it does raises another concern: What if you can’t actually afford to pay your high deductible?


Open a Health Savings Account if possible

A Health Savings Account (HSA) can help you lower your taxes, pay for healthcare expenses, and even help you save for retirement. HSAs are only available with high deductible health plans. They can be used to pay for eligible health care expenses and out-of-pocket costs not covered by your health plan.

With an HSA, the money you contribute towards it is made with pre-tax dollars, meaning it will reduce your taxable income. It grows tax-free and isn’t taxed when you spend it. Unused contributions roll over from year-to-year, and at age 65 you can withdraw the money for any reason, which can help fund your retirement (the withdrawal is taxed as regular income).

Together, a health savings account and a high deductible health plan can add up to significant savings. The amount you can contribute to your HSA is quite generous: up to $3,550 for individual coverage and up to $7,100 for family coverage.


Capitalize on critical illness insurance coverage

Every health insurance plan has gaps in coverage and can leave you with large out-of-pocket expenses. Even with an HSA, you can still face serious financial hardship in the case of a catastrophic illness.

Fortunately, that’s where supplemental coverage can help, namely critical illness insurance. It’s a cost-effective way to lower your risk of facing out-of-pocket expenses that your health insurance, HSA, and emergency fund can’t cover. While covered illnesses vary from carrier to carrier, critical illness insurance will typically provide a lump-sum cash benefit directly to you if you experience:

  • Heart Attack
  • Coronary artery bypass surgery
  • Angioplasty
  • Stroke
  • Invasive cancer
  • Non-invasive cancer
  • Kidney (renal) failure
  • Major Organ Transplant
  • Advanced Alzheimer’s disease
  • Paralysis
  • Coma


This money can be used to cover health insurance deductibles and copays, replace lost income from missed work, and pay everyday bills and living expenses.

If you’re fortunate enough to be offered this coverage as an employer-sponsored benefit, be sure to capitalize on it. Especially if you have concerns about your high deducible health plan, emergency savings, or family health history.

If it’s not offered by your employer, buying a personal policy online is convenient and affordable.


Final thoughts

As you consider your coverage decisions this year, be sure to carefully evaluate your options and ask plenty of questions. Open enrollment begins November 1 and lasts until December 15, so you still have plenty of time to assess any potential gaps in coverage you may need to fill. But now is not time to procrastinate.