Open enrollment creates opportunity and stress. Trying to find the best (and mosy cost-effective) benefits means coverage for the next year. In fact, with the right benefits mix, it could mean coverage and savings for years to come. Let us help you select benefits during openenrollment.
Review your Open Enrollment Requirements
Take stock in the benefits you used this year and the cost-value ratio of these benefits. Determine how much value you extracted from each benefit versus the monthly cost of those benefits.
It's not just about costs, but also the value you get from those benefits. Need an example? Let's say a PPO and HMO are the same in terms of cost per month and deductibles, but your in-network PPO doctor is 15 min from your home versus one hour away. Try and calculate the cost this extra time has on your lifestyle or even the extra gas required to get you there.
Do your best to formulate an understanding of your current benefits. As you review options for the upcoming year, you will have a clear vision of what you and your family needs and how much that will cost.
Understand How Benefits Coupling Works
Evaluating benefits so that you can compare health insurance plans and other benefitsis often done in a silo. Most people review one benefit at a time and decide to select or ignore it. While your 401(k) might have little to do with your health insurance, your healthcare is very important when considering other benefits such as an HSA.
When you review and select benefits during open enrollment, consider them alone and coupled with other benefits, when applicable.
Plan for This Year and Next
Open enrollment is an annual process to renew or select new benefits. There are a few selections that will create value for you and your family for years to come. A 401(k) is an obvious example. The tax-free money you save each year in your 401(k) will be there in retirement. You are building a financial nest egg that never expires.
An HSA (health savings account) is a less, but equally advantageous benefits saving option. It has a similar tax-structure as the 401(k), but all the money you save can be used anytime for qualified medical expenses. If you save those funds until you are 65 years old, you can use that money for anything, like a 401(k) and pay no penalty!
Don't get stuck in the yearly carousel ride that most benefits solutions provide. Look for benefits and benefits combinations that get you ahead of the curve for next year.
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.