Every fall, an email lands in Maya’s inbox announcing open enrollment. And every year, she quickly clicks “renew” and moves on.
Open enrollment is when you choose your medical and other workplace benefits for the coming year. Most companies hold it in the fall. Once it closes, you usually can’t make changes unless there’s a major life event, like marriage, divorce or a new child.
This year’s decisions may carry more weight than usual. Many workers are facing higher health care costs, making it especially important to understand what you’re paying for and what protection you’re receiving in return.
It’s tempting to renew last year’s choices, but you owe your future self more. Your employer’s plans, providers or costs may have changed, and your life might look different from a year ago, perhaps with a new dependent or new medical needs. A fresh look helps ensure your benefits match your life.
Compare health plans. Employers often offer more than one health, dental or vision option. Rather than simply glancing at the monthly premium, look at the total potential cost of each plan, including deductibles, copays, coinsurance and out-of-pocket maximums.
Check whether your doctors are in network, your prescriptions are covered and what you’d pay out of pocket for visits and medications. If you and your spouse both have coverage, compare the plans. Some employers charge a fee if you enroll a partner who has their own workplace coverage.
Check your life insurance. Many employers provide basic coverage, often one or two times your salary, with the option to buy more. If your family has grown or your responsibilities increased, make sure that amount still fits your needs. If you’ve maxed out employer coverage, consider supplementing it with an individual policy.
Consider disability coverage. Short-term disability coverage, along with paid sick leave and emergency savings, should help bridge income gaps for up to six months during recovery from surgery, illness or childbirth. Long-term disability insurance should protect you if you can’t work for an extended period, up to age 65. Ideally, it should replace up to 100% of your after-tax income.
Look for tax-friendly accounts. Flexible spending accounts (FSAs) and health savings accounts (HSAs) let you use pretax dollars for eligible medical expenses. If you have dependents, ask about a dependent care FSA to pay for care costs. Remember that FSAs are use-it-or-lose-it, so contribute only what you expect to spend. HSAs, available with high-deductible plans, allow unused funds to roll over and can help supplement retirement savings.
Consider your retirement plan. While your retirement plan usually isn’t part of open enrollment, this is a good time to revisit it. Make sure that, at a minimum, you’re contributing enough to earn any employer’s match.
Back to Maya. This year, she sets aside an hour, pours a cup of coffee and reads her options. She’s adding more life insurance and increasing her HSA contribution. Open enrollment may never be thrilling, but time spent now can mean a more confident year for you and the people who count on you.
***This article was written by Edward Jones for use by your local Edward Jones Financial Advisor. Edward Jones, Member SIPC***
