11 Nov It’s Open Enrollment Time: How to choose your benefits for next year.
What is open enrollment?
Typically, you can make changes once a year, unless you have a major life event such as having a baby, getting married or losing a spouse’s health coverage. This is when you have the opportunity to make changes to the benefits offered by your employer.
Open enrollment offers you a chance to change (or keep) health, dental, and vision plans along with life insurance policies and voluntary benefits and contribute to a health savings account or a flexible savings account.
Use this time to double-check beneficiaries on accounts and policies, including retirement and life insurance.
Health insurance plans
Benefit enrollment is a great time to do a side-by-side comparison. Keep in mind that your selection will stay in effect until next year. You get to evaluate every year.
When considering your health out of pocket costs make sure to include premiums, co-pays and deductibles, out of pocket maximums, and prescriptions coverage.
Dental and vision insurance
Use open enrollment to plan for likely costs for dental or vision and compare them to the cost of the insurance and what cost the benefits cover.
Health savings accounts (HSAs)
HSA’s are used with a high deductible health plans. It offers you the ability to save for out-of-pocket medical expenses with a triple tax advantage – tax-free contributions, earnings grow tax-free and withdrawals are tax-free if used for qualified medical expenses. The unused funds can roll over from year to year and you decide each year how much to contribute.
There are limits on how much you can contribute each year and for 2025 they are:
- Individual – $4,300
- Family – $$8,550
- Age 55+ – may have an additional catch-up contribution of $1,000
- Employers may contribute but it counts toward your annual contribution limit
Flexible spending accounts (FSA)
FSA’s allow you to contribute pre-tax basis for qualified health care and dependent care expenses. Dependent care may include childcare as well and elder care.
An FSA plan differs from an HSA plan in two ways. It includes dependent care, but the big difference is the FSA is a use or lose plan. It does not carry over from year to year. If you haven’t used it by the end of the year you forfeit the money.
Life insurance
During open enrollment, there are a few things to consider about life insurance. First, you may be able to buy more coverage through your employer (called “voluntary” life insurance), with the premiums deducted from your paycheck. Typically, group life insurance premiums are higher than privately owned policies. Talk to us about this.
If you lose or change jobs, you will likely lose employer-provided life insurance, but you can retain voluntary coverage and pay the premiums directly to the carrier.
Voluntary benefits
Voluntary benefits are typically a suite of benefits that you may choose to add. These benefits often fit into four categories: health and wellness; financial wellness; personal benefits; and security.
For information about what voluntary benefits may be available to you, reach out to your employer’s human resources.
Disability income insurance
Your employer may offer long term disability for free but if you want short term disability you may have to contribute premium. However, if you choose to purchase short term disability is will cover a portion of your income sooner and if your disability last longer it will transition to long term disability. Typically, employer sponsored plans cover 60% of your base gross pay. As with all employer benefits, this coverage isn’t portable and doesn’t cover 100% of your income if you become disabled. Talk to us about protecting your income appropriately!
Retirement plan savings
Use these key questions to make sure you’re on track with your retirement savings. Are you contributing enough to get an employer match? Does your current investment strategy still reflect your risk tolerance?
Employee Assistance Programs (EAP)
Your workplace may offer a variety of options including childcare assistance, education assistance, or mental health benefits, sometimes called employee assistance programs (EAP). An EAP is a voluntary program that offers free and confidential assessments, short-term counseling, and referrals for work or personal problems.
Spending time each year to review your employee benefits will ensure that you have the right benefits in place for the upcoming year.