Employer health insurance (open enrollment)

Employer-sponsored health insurance is the most common form of health coverage in the United States, covering roughly 155 million people. Each year, employers offer an open enrollment period — typically in the fall — during which employees can select, change, or drop their health plan for the coming year.

26 steps across 5 sections

1. HMO (Health Maintenance Organization)

  • How it works: You choose a primary care physician (PCP) who coordinates all your care and provides referrals to specialists
  • Network: Restricted; no out-of-network coverage except emergencies
  • Premiums: Lower than PPO
  • Best for: People comfortable with a gatekeeper model who want lower premiums and predictable costs
  • Tradeoff: Less flexibility in choosing providers

2. PPO (Preferred Provider Organization)

  • How it works: You can see any doctor or specialist without a referral, in-network or out-of-network
  • Network: Broad; out-of-network care is covered but at higher cost
  • Premiums: Higher than HMO/HDHP
  • Best for: People who want maximum flexibility, travel frequently, or see many specialists
  • Market share: ~46% of employer-based enrollments are PPOs
  • Tradeoff: Highest premiums

3. EPO (Exclusive Provider Organization)

  • How it works: Like a PPO (no referrals needed) but with no out-of-network coverage
  • Network: Restricted to in-network providers only (except emergencies)
  • Premiums: Lower than PPO, similar to HMO
  • Best for: People who want PPO-style freedom within a defined network
  • Tradeoff: No out-of-network safety net

4. HDHP + HSA (High Deductible Health Plan with Health Savings Account)

  • How it works: Low premiums, high deductible; paired with a tax-advantaged HSA
  • 2026 HDHP minimum deductible: $1,700 individual / $3,400 family
  • 2026 HSA contribution limits: $4,400 individual / $8,750 family
  • Premiums: Lowest of all plan types
  • Best for: Healthy people with low healthcare usage; people who want to build long-term tax-advantaged savings
  • Key advantage: HSA funds roll over indefinitely, are tax-deductible going in, grow tax-free, and are tax-free when used for medical expenses (triple tax advantage)
  • Tradeoff: High out-of-pocket costs before insurance kicks in

5. Scenario Modeling

  • Healthy year: Only preventive care (all ACA plans cover this free) — compare premiums only
  • Moderate use: A few specialist visits, prescriptions, maybe an ER visit — factor in deductible + copays
  • High use: Surgery, chronic condition, pregnancy — the out-of-pocket max becomes the key number

Common Mistakes

  • Defaulting to the same plan
  • Choosing the lowest premium
  • Not checking the provider network
  • Ignoring the HSA option
  • Not using the FSA

Pro Tips

  • Model 3 scenarios
  • Check the formulary
  • Max out employer HSA match
  • Front-load your HSA
  • Use the SBC (Summary of Benefits and Coverage)

Sources

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