4 Things to Review During Open Enrollment
It’s that time of year again—Open Enrollment season! This is your opportunity to review and update your benefit elections, which can include health insurance and other employer-provided options. Here are four key categories to review during your open enrollment this year:
1. Healthcare
Open enrollment is an excellent time to reassess your healthcare needs for the upcoming year. Here are a few items to review for your healthcare benefits:
Consider if you need to change the type of healthcare plan you will have for the upcoming year. If you have an upcoming surgery or a baby on the way, a lower-deductible health plan might be beneficial. Conversely, if you are generally healthy and don’t anticipate significant medical needs, a high-deductible health plan could be more cost-effective.
If you do choose the HDHP, you may also have the option to open a Health Savings Account (HSA) where you can contribute pretax dollars to an investment account that can grow and be withdrawn tax-free to be used for eligible healthcare expenses over the rest of your life.
Does your employer offer a Flexible Spending Account? If so, you have the benefit of setting aside a specific amount from each paycheck, pretax, to go into an account to be used for various healthcare expenses for that year. The trick with an FSA is that these dollars don’t roll over every year so you may need to adjust how much you contribute each year based on what you expect to spend on healthcare-related expenses for the upcoming year.
2. Disability Insurance
Check whether you have disability insurance through your employer. Some employers automatically provide this benefit, covering the premium and offering about 60-65% of your income if you need it. If your employer offers you the option to purchase additional coverage, remember that paying the premium yourself means your disability income will be tax-free. If your employer pays the premium, the income will be taxed, which can affect your take-home amount. Understanding your coverage and tax implications is crucial to ensuring you have adequate protection. Use open enrollment as a time to confirm you have disability insurance, review how much coverage you have, and consider whether you might need additional coverage through a private policy if what you have through work would not be sufficient for your family.
3. Life Insurance
Review your life insurance options during open enrollment. Employers often provide a base amount of life insurance, typically one to two times your salary. You may also have the option to purchase additional coverage for yourself or your spouse. Group policies offered through employers are usually more cost-effective, making this an opportune time to secure adequate life insurance, especially after significant life changes like marriage, home purchase, or childbirth.
4. Legal Benefits
I’ve seen a lot more employers starting to offer legal services to their employees. This could be useful to you if you need estate planning done, which could be at a free or reduced cost through your benefits. There are also legal plans you can sign up for that allow you a set number of hours of legal counsel as well. Be sure to check your full benefits package to see if this is available to you!
I hope this helps you in reviewing your employer benefits during this open enrollment season and if you have questions about whether you have the right coverages for you, reach out to us at MainStreetplanning.com and we would be happy to review your employee benefits with you as you decide what benefits are right for you this year.
