Summer is long gone now, and we’re deep into the throes of fall. Halloween mischief has been had, and now we’re looking forward to Thanksgiving celebrations. The magic of Christmas isn’t far off either. But for many HR professionals, financial planners and anyone who likes to keep on top of things, the fall means something else too.
It’s open enrollment season. Open enrollment is that time of year when employees can reassess their benefits and make changes if they need to, changes which will come into play the following year. Benefits packages vary from company to company, from nothing at all to extremely comprehensive. At the very least, they should include health insurance, paid time off and some extras.
Open enrollment generally happens during November and December, but some employers will have started gearing up for it in October. There’s a lot of information for employees to have to process. Employees need time to review their own situation and the benefits options from the employers, to make decisions and then receive the necessary documentation to use from January onwards.
What Happens During Open Enrollment?
Open enrollment is a time to consider which benefits will best meet your needs, and protect your assets most efficiently. You need to use this time well, by making sure you are well equipped with all the necessary information needed to choose which benefits to enroll with for next year.
Employers should dedicate an adequate amount of time during open enrollment to communicating with employees about their options. There might be information briefings and chances to speak with benefit providers. If employers have changed any of their benefit provisions, they should make this known during open enrollment as well.
Mind you, don’t get caught out in 2020. This year, your organization may well be running things differently due to the pandemic. Your workplace may be offering virtual information sessions, or sharing the necessary information online. Make sure you know how your employer plans to run their open enrollment this year.
During open enrollment, employees can add to, change, or terminate any coverage that they have previously arranged as part of their benefits package. Workplace benefits up for selection in open enrollment include the more standard options as well as voluntary benefits.
Voluntary benefits might include supplemental insurance policies that are offered more cheaply to employees through their employers than ‘off the rack.’ So while health insurance is very often provided, you may have the option to choose other insurance policies such as dental, vision, disability, and even pet insurance.
What Do I Need To Consider?
While it feels like there’s an awful lot to think about, there are a few key things to consider during open enrollment. Some may be obvious, and others are tips that we’ve picked up along the way.
What’s Changed Since Last Year?
Firstly, ask yourself if any of your personal circumstances have changed over the last year, that might change your insurance requirements. This might involve changes in a relationship, to property ownership, to your own health. Is your current coverage adequate for your current needs?
Has your employer made any significant changes to their offering? Are your preferred doctors still available? Make sure the options still meet your requirements.
Protect Your Future
Is your current benefits package adequate for your future needs? Is your current life insurance adequate for your family’s needs, if something were to happen to you? Will it cover mortgage payments, or kids’ education expenses? If you’ve had a promotion and are now a higher earner, make sure your life insurance policy reflects that.
The best way to protect all of your assets into the future is through insurance, but make sure you’re not paying for things you don’t need. Think about necessary extras like disability insurance and even long term care insurance, but remember to weigh the costs against the benefits.
Can you get better coverage elsewhere? If you’re married, you might find that it makes better financial sense to be covered by your spouse’s plan, especially if it provides better coverage. While it might add to the cost of a spouse’s premium, it might be cheaper than maintaining your own and offers better terms.
If you have children, even if they are of working age they can remain on your plan until they are 26. So does it make better sense for them to be included on your plan, or have their own?
Don’t Miss Out
Even though there’s a lot of it, examine all the fine print, and look at all the options. Don’t just stop at the basics. Are there tax-advantaged options to make the most of? For example, is your employer offering a Health Savings Account? Health Savings Accounts can make a huge difference should you have to face large medical bills, and are potentially great tools for expenses in retirement.
Could you save money with voluntary benefits available through your employer? All sorts of things that you hadn’t thought of might be available. You may be paying for gym membership, but as part of a wellness program you may be able to access a cheaper one through your voluntary benefits package. Some employers have even been including fitness wearables so you can monitor and improve your health more actively.
Why is Open Enrollment Important To My Financial Plan?
I often find that clients don’t scrutinize their workplace benefits enough, and this can leave them, their families and their financial plan vulnerable. Comparing available benefits and making adjustments due to changes in circumstances is a vital part of the success of anyone’s financial plan. Open enrollment is a great time to revisit your benefits, and make sure they’re serving you and your plan as efficiently as possible.
It’s simple really. If you’re saving money for a big life event – buying a house, your children’s education, opening a business – then making sure you have adequate insurance is vital to protecting those goals. If you’re in an accident and can no longer work, disability insurance will mean you still have an income and won’t be eating away at your savings.
Or if you get sick, a large medical bill could wipe out your savings instantly. Prescription drugs could slowly chip away at your finances over time. Adequate health insurance will protect those savings and keep your money available for when you need it most.
Reconsidering all your options during open enrollment also ensures that you’re not paying too much for any of your premiums or added extras either. If you find that you can get cheaper alternatives elsewhere, or remove unnecessary plans, then you can take home more of your monthly pay. This means more money for living your life right now, or more money to invest for the future.
Need Some Help?
It can be hard to pick through all the information during open enrollment. It can also be difficult to assess your current and future needs against the available options. If you’d like a fresh pair of eyes to look things over or just a bit of additional guidance, please do get in touch or schedule a meeting. I’ll be more than happy to help you to select the best benefits for you, your family, and your finances.