In a recent blog post, Rick Bryan provided some helpful tips about the current open enrollment period for Medicare. If you have a job, there’s another important window that usually occurs in fall—the open enrollment period for your employee benefits.
Open enrollment is a short annual interval during which employees can make changes to their benefits. You should make a point of finding out the dates of your company’s open enrollment calendar and take the time to carefully review your options. Most people just assume that their prior selections are still the best. CNBC reports that 93 percent of employees renew their benefits without making changes.
But that can be a costly assumption. Even if your personal situation has not changed, you may find your benefit selection has. For health insurance—the most substantial benefit for most workers—premiums and deductibles have been steadily increasing. And in any given year, the list of providers in a network can change. What if your doctor is no longer on your plan? Would you want to switch?
You also need to examine other specifics of the plans your employer offers and reevaluate them in light of your current health and family situation. Many companies offer high-deductible plans. If you choose one of these, you will want to open a health savings account (HSA) with an approved bank or provider. Make sure you save money in advance, since you may need to cover medical expenses before the deductible is satisfied. Be sure to read the rules about expenses the HSA does and does not cover.
Another option for some employees is a flexible spending account (FSA), which may cover qualifying childcare or medical expenses. If your employer offers either a medical or a childcare FSA, evaluate your anticipated spending in that area to see whether it would work for you. Be aware that these are “use it or lose it” accounts, so it is important not to overfund your FSA.
Some employers offer life insurance, disability insurance, and other supplemental insurance policies. You should assess your needs each year to decide if this additional insurance would be beneficial and cost-effective.
We are available to help as well. As financial planners we consider all elements of your financial life, employee benefits included. Your benefits package can be a significant portion of your compensation, therefore it’s worthwhile to take the time to evaluate them every year. Even if you find that your prior selections still work best, knowing you’re getting the most from your benefit options is time well spent.
If you want to learn more, this USA Today article has a good, concise summary of the various types of medical insurance and ancillary benefits that employers commonly offer.