Open enrollment is a crucial time for employees to review and make decisions about their benefits for the upcoming year. This period typically occurs once a year, and it’s your opportunity to adjust your healthcare, retirement, and other employer-sponsored benefits. To make the most of it, here are some key steps to follow when reviewing your options:
1. Understand Key Dates and Deadlines
Start by knowing the start and end dates of the open enrollment period. Missing these deadlines could mean you're stuck with your current plan or no coverage at all.
2. Review Your Current Coverage
Take a close look at your existing benefits—healthcare, dental, vision, retirement, etc. Identify what you used and didn’t use in the past year. Did your needs change? For example, did you visit the doctor more often, or are you planning a major life event like having a child? This can help guide your decisions on whether to stay with your current plan or explore new options.
3. Evaluate Plan Changes
Employers often make adjustments to the benefits they offer. Review any changes in coverage, premiums, deductibles, or network providers. This information is typically provided in open enrollment materials. Compare how these changes could impact your out-of-pocket costs and overall coverage.
4. Compare Healthcare Plan Options
Most employers offer a variety of healthcare plan types, such as Health Maintenance Organization (HMO), Preferred Provider Organization (PPO), and High Deductible Health Plans (HDHP). Consider how much each plan covers, their premiums, and your anticipated healthcare needs.
For example:
- HMOs typically have lower premiums but require you to choose doctors within a specific network.
- PPOs provide more flexibility in choosing providers but tend to have higher premiums.
- HDHPs have lower premiums but higher deductibles, making them a good option for those who expect minimal healthcare costs and want to take advantage of a Health Savings Account (HSA).
5. Check for Flexible Spending Accounts (FSA) and Health Savings Accounts (HSA)
If your employer offers these accounts, consider enrolling or adjusting your contributions. HSAs offer tax benefits and roll over from year to year, while FSAs are generally "use it or lose it" accounts, which means you'll need to spend the balance by the end of the year or risk losing those funds above the annual rollover limit.
6. Review Additional Benefits
Don’t overlook non-health-related benefits such as life insurance, disability insurance, and retirement plans like a 401(k). Check if you’re contributing enough to take full advantage of employer matches. Open enrollment might also be the time to adjust your beneficiaries or increase your contributions based on your financial goals.
7. Use Online Tools
Many employers offer online calculators or tools that allow you to compare plans side by side based on your specific needs and costs. Use these resources to simplify decision-making.
8. Seek Expert Advice
If you’re unsure which plan is best for you, consult your HR representative or a financial professional like a CERTIFIED FINANCIAL PLANNER™ professional. They can help you weigh your options based on your health needs, family situation, and financial goals.
9. Make Your Selections and Confirm Enrollment
Once you’ve reviewed your options and made your choices, submit your selections before the deadline. Be sure to get confirmation that your enrollment has been completed to avoid any unexpected lapses in coverage.
During open enrollment, take time to review and update your benefits. Start by checking key dates, evaluating your current coverage, and reviewing any plan changes. Compare healthcare options based on your needs—whether HMO, PPO, or HDHP—and consider whether a Health Savings Account (HSA) or Flexible Spending Account (FSA) is right for you. Don’t overlook additional benefits like life insurance or retirement plans, and use available online tools to simplify your decision. If needed, seek advice from HR or a CERTIFIED FINANCIAL PLANNER™ professional. Finally, submit and confirm your selections to ensure coverage for the upcoming year.
By carefully reviewing your benefits during open enrollment, you can ensure you're choosing the options that best fit your needs and financial situation for the year ahead.
Disclaimer: The information provided in this blog post is for informational and educational purposes only and should not be construed as financial, legal or tax advice. While efforts are made to ensure accuracy, we do not guarantee the completeness or reliability of the information. Before making any financial decisions or changes, it is advisable to consult with a qualified professional who can assess your individual circumstances and provide tailored advice.
Risemint Capital Advisors is a fee-only fiduciary firm that specializes in wealth management and comprehensive financial planning. The firm is dedicated to satisfying clients' needs and fostering long-term relationships. Risemint's process involves creating a customized financial plan based on individual circumstances and goals, which is regularly updated and maintained. The firm combines active and passive investing to maximize the utility of investments over the medium and long term.