We’re coming up on open enrollment time again! In most states, open enrollment begins on November 1st and goes until January 15th.
While it might be tempting to just “set it and forget it” I’ll explain why you should review your benefits every year. Remember that your employee benefits can actually be a big part of your income. You don’t want to leave money on the table!
I started a new job at the beginning of the year. Can I still change my benefits during open enrollment?
Most employers that offer group insurance benefits hold open enrollment in the 4th quarter. This is your opportunity to change benefits that were selected the previous year, or when you originally enrolled if you started a new job at the beginning of the year.
What are some savings plans that I should be aware of?
Many employers offer a Flexible Spending Account (FSA), a Health Savings Account (HAS), or both. They are similar but have one very important difference.
- An FSA is a type of savings account that allows employees to contribute money from your paycheck to pay for qualified medical expenses. The money deducted from your paycheck for an FSA is not subject to income and payroll taxes. The most important rule to know about FSAs is that the money must be spent by the end of the year, and any money not used is forfeited.
- HSAs are similar to FSAs but are offered to employees who are enrolled in a High Deductible Health Plan (HDHP). The tax advantages are the same as FSAs, but funds are allowed to accrue and can be carried over and used in the following years.
Why is it important for me to understand all of my benefits?
There is a significant monetary value to your benefits, and you need to understand them to get the most out of them. Employer benefits are part of your compensation; you definitely don’t want to leave that money on the table.
Health care is expensive and not understanding what your needs are and miscalculating the best plan for you can be a very costly mistake. Deductibles and copays can be thousands of dollars a year. Understanding the details of how each choice works will help you get the most monetary benefit. Remember that mistakes can be very expensive, and you can’t change until the next enrollment period!
It’s also important to know that many employers offer other benefits besides health care. Legal coverage, disability insurance, and life insurance can have significant financial benefits to you, especially if you do not qualify for insurance coverage on your own.
I’ve had the same benefits for years. Can’t I just ignore open enrollment?
Absolutely not! Your employer most likely will require you to reselect your benefits even if you are not changing any of your choices. Plus, in my experience, there always seem to be small changes year-to-year – both with your needs and the benefit plans – so you definitely want to review your choices to make sure they still are the best option for you.
What if I don’t change my benefits now. Can I change them in the future?
Most employers and government entities that have health insurance exchanges only allow you change benefits during the open enrollment period. If you miss this window you must wait until the next year’s open enrollment, unless you have a qualifying life event, such as marriage, birth or adoption of a child, or a death.
One more thing.
Understanding your benefits is a big part of creating a financial planning strategy. If you find yourself confused or not sure about what options you should choose, let’s talk about it. Together we’ll look at your current situation and what you might have coming up to help ensure you’ve got all the coverage you need.
