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It's Open Enrollment: Are You Making the Most of Your Employee Benefits?

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Dear Readers: It's open enrollment time, and I have a question for you: Are you taking full advantage of your employee benefits? Employee benefits play a significant part in your financial life. And to me, staying on top of what's offered is as important as staying on top of your investments.

Open enrollment gives you the opportunity to make sure you're maximizing what's offered. So don't just assume that what worked in the past is the best for the future. It is absolutely worth it to take the time to carefully review your choices.

Health Insurance: One of the Most Important to Review Yearly

You never want to be complacent about health insurance, especially with health care cost -- and insurance premiums -- going up. If you're lucky enough to have health insurance through your employer, make sure you're getting the best trade-off between comprehensive and cost-effective coverage.

For instance, do you have a choice between a preferred provider organization (PPO) and a health maintenance organization (HMO)? A PPO usually offers more flexibility, while an HMO may have lower monthly premiums and additional benefits in exchange for getting health care services within a plan's provider network. It's worthwhile to do a thorough cost comparison of each, including premiums, deductibles, copays, coinsurance and out-of-pocket maximums.

If you have a high-deductible health plan ($1,400 for an individual, $2,800 for a family in 2020), check into a health savings account. An HSA operates somewhat like an individual retirement account for medical expenses. For 2020, the annual limit on tax-deductible contributions is $7,100 for a family and $3,550 for individuals with self-only coverage, with a $1,000 catch-up contribution for ages 55-plus.

 

In addition to the upfront tax deduction, money can be withdrawn from an HSA tax-free for qualified medical expenses including deductibles, copays, prescriptions and fees for medical services. Plus, there's no "use it or lose it" annual catch, as with a flexible spending account (FSA). Unused money can continue to grow tax-deferred for health care costs in the future, and you'll often have a number of investment choices to help your money grow and keep up with the rising cost of health care.

As you review your choices, be sure to coordinate with your spouse or partner. If you have different options between employer plans, choose carefully. You might even be able to mix and match. For instance, one plan may offer low-cost vision or dental coverage that the other doesn't. All this research takes some effort, but it's absolutely worth it.

Life Insurance: The Good, the Bad and the Difficult

Group term life insurance is a good news/bad news story. On the plus side, employees are often offered some level of basic coverage either for free or at a reduced cost, and you're not required to undergo a physical exam to qualify.

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Copyright 2019 Creators Syndicate, Inc.
 

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