For most, it’s that time of year again! Sweater weather is here, Pumpkin Spice Lattes are back, and it’s time to complete your Open Enrollment. But what exactly does that mean? Sure, you picked your benefits and chose your insurance plan when you first joined the company, but have you looked at it since? Have your family’s needs changed? Are you paying for coverage that you don’t need? Are you leaving free money or benefits on the table?
Your company’s benefits have a single purpose: to benefit you! It is important that they are not overlooked and that you take time to carefully review and select your benefits.
Here are some questions to ask during Open Enrollment:
Health Insurance
Are you healthy? Do you go to the doctor often?
Depending on your health status, a PPO (Preferred Provider Organization) plan with a low deductible may be favorable if you have pre-existing conditions or see medical specialists. Conversely, if you are in good health and rarely go to the doctor, then a HDHP (High Deductible Health Plan) can reduce your monthly premium.
Are you planning to have surgery, get Invisalign or Lasik?
If you are planning to have a major surgery or other elective procedures, it is important to pay attention to your health plan’s deductible and out-of-pocket maximum. If you have access to an FSA (Flexible Spending Account), funds are tax-deductible and can be used to pay for certain qualified medical expenses.
Do you regularly buy new glasses, see a therapist or chiropractor?
Whether you are buying new frames every year, taking care of your mental health, or getting your monthly adjustment, there are options to help pay for these expenses. These kinds of expenses are considered qualified medical expenses, and can be paid for using an HSA (Health Savings Account) or FSA. Even better? Most employers will give you free money for participating in these accounts.
Life Insurance
Should you sign up for life insurance?
A common benefit that companies provide for employees is group term life insurance. This life insurance policy typically starts at $50,000 at no cost to you. With group policies, there is typically no requirement for you to go through an underwriting process.
What is supplemental life insurance? Is this enough?
Most companies also offer supplemental life insurance. Supplemental life insurance is usually available as 1x, 2x, or 3x of your annual salary, and can also cover your spouse and children. While this may sound great, supplemental life insurance is generally more expensive than a private policy and ends once you leave the company.
Dependent Care
Do you need childcare?
Depending on your company, they may offer onsite daycare for your children. If not, some employers may provide you with a daycare allowance to help pay for the cost. The good news is the first $5,000 of benefits is tax-free!
Should you sign up for a Dependent Care FSA?
If you have children, a Dependent Care FSA is a great way to save on taxes while also saving for childcare expenses. While there are essential items that are eligible for reimbursement, like babysitting expenses, summer day camps and after-school care, there are also specific expenses that do not qualify, such as tutoring, sports, music lessons or overnight summer camps. Make sure that you use all the funds before the plan year ends or you risk losing them!
Fertility and Adoption
Are you planning to have children, but are not quite ready yet?
It’s not 1950 anymore. Women, LGBTQ+, and single prospective parents are increasingly waiting to have children until their 30s and 40s. Whatever your reason may be, most employers offer options and helpful benefits to support your decision.
Do you plan on using Fertility services?
Over the past 5 years, the number of companies offering fertility benefits has increased. These benefits include genetic counseling, fertility medications, and in vitro fertilization (IVF) treatments. Some companies are also covering the cost of egg harvesting, freezing and storage.
Are you considering adoption or fostering a child?
If you are planning to adopt a child, your company may provide you with assistance to cover the cost of adoption fees, attorney fees, court costs and travel expenses. Depending on the amount of assistance you receive and your income, some or all of this assistance may be tax-free.
Other Perks
Are you planning to create an Estate Plan?
Creating an Estate Plan (Will, Living Trust, Advanced Healthcare Directives) is essential to most families’ financial plans. If your company offers a Legal Plan, it may be worth considering. Some estate planning attorneys accept Legal Plan insurance, which could cover some or all of the cost of an Estate Plan.
Do you commute to work?
If you utilize public transportation or drive to the office, you may want to consider commuter benefits. Most companies will allow you to set aside pre-tax funds each month, which can be used to pay for BART, trains, ferries and rideshares or the cost of parking near your work.
Are you on the fence of joining a gym or buying fitness equipment?
With the rise of health & wellness initiatives, most companies are providing a monthly allowance for gym and mental health services. For those that want to stay home, your company may also cover the cost of weights, treadmills or even your Peloton.
If you’re feeling lost and overwhelmed – you’re not alone. Most Employer Benefits packages range from 30 – 50 pages long. If you would like to work with a financial planner to walk you through your options, I would love to help you!
To learn more about becoming a client, schedule a complimentary meeting now!
Disclaimer: This blog is for informational purposes only, and should not be considered advice or recommendations. All opinions expressed herein are solely those of Amaral Financial Planning, LLC, unless otherwise specifically cited. Material presented is believed to be from reliable sources and no representations are made to another parties’ informational accuracy or completeness. You should consult your financial advisor, tax professional or legal counsel prior to implementation.