Benefits are critical to keeping you healthy and financially secure. Understanding your benefits is the first step to getting the best coverage you can afford.
We have all the details you need about your benefits, from health insurance to retirement savings. Read on to get the details you need for a basic benefits understanding.
Benefits Are Changing
Before we get started, let’s set the stage. Benefits and benefits offerings have undergone a considerable change in the last few years. Why? Rising benefits costs (mostly from healthcare) and a competitive job market. These two contradictory factors are pulling benefits offerings in opposite directions.
The result has been a slimming down of offerings and choices, but often an expansion of core benefits. It also means that HR and benefits admins need to show the value of benefits, which is now measured against company growth and profitability.
Read the Fine Print
What you might not have noticed is what was called ‘healthcare‘ last year is very different than what is called ‘healthcare’ this year. While all of the plan names and terms (PPO, HMO, HDHP) have remained the same, the value and coverage of those plans have been slowing changing.
Let’s look at an example. PPO plans by definition have lower deductibles, but higher monthly premiums. HDHP have higher deductibles, but lower monthly premiums. Comparing your cost-value equation requires you look at your set monthly costs and coverage vs. your predicted out-of-pocket expenses. This is hard enough!
What you might have missed is that what was covered at a certain tier last year is not this year. Or that your monthly premiums have increased. In fact, family healthcare premiums for employees have increased 5% since last year. Make sure you not only compare each plan but the changes to each plan year over year.
More change in the benefits space can create a problem (planning ahead) and an opportunity (to save money for next year).
401(k)s have been an obvious way to save for years to come. The more you save, tax-free, the more money you have for retirement. Each year you have the opportunity to get farther ahead. These benefits never expire. You own your 401(k).
Healthcare poses an interesting conundrum. It expires each year. How can you plan ahead if you are boxed into a 12-month cycle? The only long-term healthcare saving solution is an HSA. Health savings accounts help you plan for healthcare costs next year, the year after, and in 20 years.
Take What’s Given
While it might be obvious, take what is given to you. Don’t decline free or low-cost benefits. They will help for all of the just in case scenarios, at little or no cost to you. Invest your time to see how you can squeeze as much juice as you can out of those free lemons. This creates more value for you and ultimately more financial and health protection.
The first step to getting ready for open enrollment is understanding your benefits options. Use this to establish your benefits foundation. Build from there. Next, you can get ready to make your benefits selection this year, and prepare for the years to come.
If you need more help with health account decisions, check out our blog. We will make you a healthcare benefits expert in no time, without any extra work or effort on your end.
Disclaimer: the content presented in this article are for informational purposes only, and is not, and must not be considered tax, investment, legal, accounting or financial planning advice, nor a recommendation as to a specific course of action. Investors should consult all available information, including fund prospectuses, and consult with appropriate tax, investment, accounting, legal, and accounting professionals, as appropriate, before making any investment or utilizing any financial planning strategy.