If you are a salaried employee, you're probably entitled to a number of workplace benefits, some of which you may have the ability to elect yourself or opt in and out of. The time to choose those benefits is none other than open enrollment season, which typically takes place during the last few months of the year. If you're confused about open enrollment or overwhelmed by the notion of having to select which benefits to take, here are a few tips to help you navigate the process.
1. Understand your health insurance plan options
Perhaps the most daunting task you will face during open enrollment is deciding which health plan to get through your employer. Generally, the things you want to look at when choosing health insurance are premium costs, deductibles, and scope of coverage.
Your premium is essentially the fee you'll pay for having your plan. Your deductible, meanwhile, is the amount you'll need to spend out of pocket before your insurance provider will pay for your medical services. Usually, the higher your premium, the lower your deductible and the better your actual coverage. That said, a high-premium plan may not make sense if you don't have any known medical issues or don't tend to get sick often.
Either way, you'll want to review the type of coverage you get under each plan option before choosing one. Some plans, for instance, might charge a high copay for office visits or limit you to a fairly narrow network of doctors. A plan like that with a low premium might therefore not end up being a bargain. Keep in mind that if you see your current health plan listed as an option for next year, you'll still want to do some research to understand its scope of coverage, since these things can change from one year to the next.
2. Sign up for a flexible spending account
Flexible spending accounts, or FSAs, can save you a large chunk of money if you use them correctly, since they allow you to allocate pretax dollars to pay for healthcare and child care. For the current year, you can contribute up to $2,650 to a healthcare FSA and $5,000 to a dependent-care FSA. And while the 2019 contribution limits have not been announced as of this writing, some insiders expect healthcare FSAs to rise to $2,700 for the upcoming year.
The only danger with funding an FSA is that these accounts operate on a use-it-or-lose-it basis. If you put $2,000 into a healthcare FSA but only rack up $1,500 in eligible medical expenses during your plan year, you risk forfeiting the remaining $500. That said, if you're able to accurately estimate your medical costs, an FSA could save you a bundle. Furthermore, since the $5,000 annual limit for dependent-care FSAs is well below the average cost of child care in the country, many families have no problem accruing $5,000 in expenses.
3. Think about your upcoming legal needs
These days, a growing number of companies are offering employees group legal plans. With these plans, you typically pay a single annual fee (which, like your FSA and health plan contributions, get deducted from your paycheck in equal installments), and that fee entitles you to a host of legal services that might, in some cases, be more expensive on their own. If you're planning to buy a home in 2019, signing up for a legal plan could end up being more cost effective than paying a lawyer to handle your closing. Similarly, if you don't have a will, you may find it cheaper to pay for a legal plan and have that document drafted for free under it.
4. Be wary of pet insurance
Though it's certainly not as common as health insurance for humans, a growing number of companies are starting to offer insurance for pets. And while that might seem like a benefit to jump on at first glance, be sure to carefully read up on the policies you're granted access to before signing up. Pet insurance plans are notoriously limiting in their coverage, and the last thing you want to do is pay, say, $60 a month only to learn that your plan won't kick in when you need it to. Therefore, make sure you understand exactly what sort of coverage you'll be getting for things like injuries, illnesses, medications, and general vet visits before determining whether a plan is worth it.
Many employees find open enrollment stressful, but the key is to take your time when choosing your benefits. The less rushed you are during the process, the better your chances of making the right call.
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