By Kerrie Beene, CFP®
During October and November a majority of people will be having open enrollment for benefits. We encourage you to take the time to thoroughly review your benefit options. Make sure you pick the best options for your situation and do not leave any benefits on the table. Below are some do’s and don’ts when reviewing your employee benefits.
Do
Take the time to compare the medical, dental, and vision plan options. While it may be easiest to pick the plan with the lowest premium, that plan may not be the best option for your situation. Some factors to consider when reviewing your plan are:
Premiums
Out of Pocket Expenses
Prescription drug coverage
Networks (Before switching plans or signing up for a new one, check the availability of doctors within that network)
Sign up for disability coverage. It is easy to think nothing will happen to us, however, a 35 year old has a 50% chance of becoming disabled for a 90 day period or longer before the age of 65. While you can purchase a policy from an outside source, employer options are often the best place to start.
Sign up for life insurance. Your personal situation will depend on how much life insurance you need but your employer is often the lowest cost provider. Take the time to analyze how much life insurance you may need and maximize the benefit available to you through your employer and then seek outside insurance if needed.
Take advantage of employer sponsored retirement plans. This could be a 401k, 403b, 457b, Simple IRA, etc. Most employers offer a match, such as 3% of your salary. This is money you do not want to leave on the table. Be sure to contribute at least the percentage your employer matches to ensure you receive the full benefit.
Ask questions. If there is a benefit you do not understand, reach out to your human resources manager and ask questions.
Don’t
Wait until the last minute to enroll in your benefits. Review your benefits as soon as possible and make sure you understand the options available. If there is a benefit you don’t understand, reach out and get clarification.
Sign up for benefits based on your co-workers choices. Make sure you are picking the best options for your personal situation.
Rule out supplemental disability options. Some employers offer a supplement policy that will add coverage above and beyond the basic policy. Think about how much of your pay you would need if something were to happen and you needed to file for disability. If the policy covers 60% of your salary, will you be able to manage without the other 40%?
Rule out the high deductible plan. While signing up for a policy with a higher deductible can be scary, the health savings account available with this plan makes this a very attractive option. For more information on health savings accounts, check out this article.
Rule out “other” benefits available. Sometimes employers offer benefits such as dependent care spending accounts and legal plans. If your employer offers a legal plan, this is something you could take advantage of if you need Estate Planning Documents set up.