If you're enrolled in your company's health insurance plan, and you take advantage of the flexible spending account options and other employee benefits, the end of the year may be a busy time as you have to sit down and figure out what parts of their offerings to take advantage of, and which ones to pass on. It can be stressful, and a lot of people admit to making mistakes. One study, released by Harris Interactive/Aflac showed that a lot of people are making mistakes and wasting money:
The study reports that 77 percent of workers say they’ve made mistakes in their benefit decisions in the past, with 42 percent saying they waste money every year. The most common mistakes, according to Aflac, include choosing the wrong deductible, not taking advantage of their flexible spending account and passing on coverage — such as vision and dental care — that they later wish they had taken.
There are a lot of things to remember when looking at what to do during your company's open enrollment period, so today I thought I would go over some of those things.
Open Enrollment – What Should I Sign Up For?
We all know the feeling, at the last minute you get an email from the HR department, letting you know that the company will be having a meeting on Friday, and on that day (and that day only!) you'll need to make some very big choices. What health insurance plan do you want? Do you want to contribute pre-tax to a flexible spending account? Do you want to take part in a company short term disability insurance plan?
Instead of feeling that panic mode when it comes time to enroll, instead do a bit of homework on your situation and what's best for your family ahead of time.
So let's go over some of the things you may need to consider:
- Health Care Flexible Spending Accounts (FSA): To me this one is definitely one that most people should take advantage of if they can – especially if they anticipate a lot of medical bills one year. It essentially allows you to save money on all of your health care spending by having money set aside from your paycheck tax-free that you can spend on health care related expenditures only. At our house last year we ended up saving close to $900 in taxes because we withheld money to pay for our health spending in our flexible spending account. It's basically free money! Just make sure that you're only setting aside what you KNOW you'll be spending because anything left unspent you won't get back. Also be aware that FSA rules have tightened in the last year. Read more: Details about FSA accounts.
- Dependent Care Flexible Spending Accounts: Do you have a child in daycare? You may want to consider setting aside money for your dependent's childcare costs. My wife stays home with our son, so this isn't a concern for us.
- Commuter Accounts: Set aside money pre-tax to pay for commuting costs. I haven't used one of these personally, but at some offices it may be an option.
- High Deductible Health Insurance Plan With Health Savings Accounts, or Traditional Health Insurance: For us the decision whether to go with a traditional health care plan or a high deductible health care plan (HDHCP) in tandem with a health savings account has been a tough one. My employer currently offers both options, and for employees moving to the high deductible plan with health savings account they are offering a $1000 bonus as well (because it costs them less!). We've considered moving, but our health care costs are just too great right now with my wife's health issues and with our son still having a ton of doctor's office visits. For us the traditional plan still makes more sense, but for a lot of people – especially those who are healthier, a high deductible plan may make more sense. Read up on Health Savings Accounts.
- Company Life and Disability Insurance: If your company offers free life insurance or disability, you should definitely take advantage. Even if their offering isn't free, it may make sense to investigate it and see if it is affordable compared to what you could get on your own. In my instance we had no free offerings, and it was cheaper to buy the insurance on my own – so we passed. Some will offer short term disability as well – as opposed to long term disability. We passed because we have self-insured for short term layoffs, and will buy our own long term disability insurance.
Things To Remember During Open Enrollment
There are a variety of things that you'll need to remember when it comes to open enrollment time.
- How much did you spend last year? Figure out before enrollment time just how much you spent last year on health care costs, daycare costs, etc. Figure out based on your average spending in that category whether you want to participate – and how much – in your employer's plan.
- What things do you really need? There are invariably some parts of an employer plan that you really don't need, or could do without. Consider your past spending, current coverage elsewhere and only take advantage of parts of the plan you'll really use.
- Ask about discounts during your meeting: At your meeting they may discuss some plan benefits and discounts you can expect to receive. Look for things like discounts on eyeglasses and health club memberships among other things.
- Ask about health care advocate and cost comparison services: Some company plans will now offer a health costs savings comparison company and/or health care advocate that you can call along with your plan. At our company whenever we're thinking about doing a costly medical procedure we can call this company, and they'll compare costs of the service across several local hospitals. Costs can vary by thousands, and this can be especially helpful if you're on a high deductible health insurance plan.
Open Enrollment Tools And Resources
As mentioned previously, open enrollment time can be extremely confusing. There are tools, however, to make it easier.
Tools to simplify open enrollment decisions:
- WageWorks Health Care And Commuter Account Calculators: Check out these calculators if you're not sure how much you can save by going with a FSA, HSA or commuter or daycare spending accounts. For many the savings can be pretty dramatic!
- Simplee.com: This site, once you give it access to your health care records, can give you ways to save on your costs.
- Benefits Simplifier Tool: This site will ask you questions about your family, health and income and then give you some suggestions to consider when it comes to what benefits to sign up for.
- Health Plan Matchmaker: This tool will ask you some questions about your health care situation and give you a suggestion on what type of plan may fit your needs the best.
Have your own tips or tricks for being prepared for open enrollment? Have things you think others should look out for? Tell us in the comments.