Are You Ready For Open Enrollment?

October 27, 2015

It’s open enrollment time…that time of the year when you get this huge booklet or email of benefits and have to wade through all of the papers and links to figure out what to do while planning for the holidays at the same time. Remember to take time to really think about how you used your benefits last year so you can make the best decision. Here are a few things to consider:

Medical Benefits. As you evaluate your healthcare options, ask yourself how often you went to the doctor and how much you paid out-of-pocket for medical expenses?

  • If you only went to an annual exam, then maybe a high-deductible plan that qualifies you to use a Healthcare Savings Account (HSA) may be a consideration.
  • On the other hand, if you went to the doctor often, maybe a high deductible plan is not the best choice.
  • Consider using pre-tax medical savings plans like HSAs and Healthcare Flexible Spending Account (FSA), if available, to pay for the expenses. If you’re unsure of how much to save, start with at least the deductible and any ongoing medical expenses.
  • If you are thinking of changing insurance carriers, you might want to call your medical provider and ask the billing office if they accept the insurance and what insurance carriers they would recommend. Your medical billing office typically work with a lot of carriers and knows which ones pay the most or are difficult to work with.

Life Insurance. Go to websites like LifeHappens.org and calculate your life insurance needs and review your existing life insurance coverage to ensure that you have enough.

Estate Planning. If getting a will, trust or some other estate document is high on your to-do list, consider enrolling in a pre-paid legal plan that may pay for the majority of your estate planning documents.

Beneficiary Review. Use open enrollment as a reminder to check your beneficiary designations on your retirement plan and life insurance policies to make sure you have the people you want on your accounts.

401(k) Review: Estimate if you are on track to retire. If your 401(k) plan website does not have a calculator, you can use this estimator . If you find that you are not on track, consider increasing your contributions to your 401(k) plan. If increasing your contributions is too financially difficult, consider using a feature called auto-escalate that can automatically increase your 401(k) contributions annually by as little as 1% on any month of your choosing. Most people choose the month after their hire date where they are the most likely to get a raise.

Tax Withholding Review. I admire people who want to give a free loan to the federal government until April 15th of every year but I am sure that you have financial goals you want to use your money for. Consider using the IRS Withholding Calculator to find the right amount of withholding to take.

Using open enrollment season to do a review of your benefits and tax withholding can go a long way in making sure that you have the best benefits for you and your family. Just don’t put it off until the last minute. If you miss the deadline, you’ll have to wait until next year!