Navigating Open Enrollment
You may have been hearing the words “Open Enrollment” lately. You probably received an email from HR which mentioned it or heard it mentioned in the news. Unfortunately, open enrollment seems to come and go so fast each year many of us do not take full advantage of the benefits. The benefits you choose can significantly affect your budget and, consequently, your long-term financial plan. Below is a quick guide to help you navigate open enrollment.
What is Open Enrollment?
Generally, this applies to the time of year when you can select certain employee benefits through your employer, like health, vision, dental, and life insurance OR the time of year when you can change your federal marketplace healthcare plan or Medicare supplement plan without the need for a qualifying event.
When is Open Enrollment?
If you are employed – Each company’s specific open enrollment is different, but it always happens in the fall. Typically, open enrollment can start as early as September and ends in December. Check with your HR department for when your specific open enrollment window occurs.
If you are on a marketplace health care plan (ACA plan) – November 1st to December 15th.
If you are on Medicare – October 5th to December 7th.
Navigating Open Enrollment Checklist
o Review default options for any changes – Even if you don’t want to change any of your benefits, they may change anyway. Specifically, healthcare plans often make small changes to deductibles, coinsurance, and other coverages. The plan you were on the previous year may no longer exist. Compare your new coverage to your current coverage and make sure it still fits you and your family.
o Look to maximize all the benefits your company offers – Each employer is different and has different benefits they provide to employees. It can be helpful to have your financial advisor review your open enrollment packet for potential opportunities. For example, one company recently started encouraging employees to move to a high deductible plan. On the surface, this appeared like a bad outcome for a big family, but the company was actually going to contribute $5,000 a year to a Health Savings Account (HSA) for anyone who made the switch. The $5,000 more than covered the higher deductible! This would have been leaving money on the table for most people if they didn’t read their open enrollment info closely.
o Compare combined benefits in two job households – It could be cheaper for you and your spouse to be on separate health plans. Or both on one. Or kids on one and spouse on the other. You must run the numbers to see what works the best.
o Update your financial plan – This is a great time of year to refresh your financial plan or touch base with your financial adviser. You will want to let them know any changes to things like life insurance or healthcare coverage. If you use an FSA or HSA account, it is a good time to plan out your contributions for the next year. Also, if your life insurance coverage through your employer increases or decreases, this will need to be reflected in your plan.
Bottom line: Don’t delete that email you get from HR about open enrollment! Take the time to read the new benefits package and get a second set of eyes to review if you need. The benefits you have which protect your family are a critical part of a successful financial plan.