Navigating Annual Enrollment for Benefits at Work
What is open enrollment for benefits?
Employers that offer benefits set aside a period every year to make elections for the next year. This “enrollment period” usually happens in the fall. Organizations will give anywhere from a week to month to allow benefit-eligible employees a chance to make elections on benefits for the next calendar year.
Why should you pay attention to the annual enrollment period?
Your employer’s annual enrollment window is your opportunity to pick important benefits for an entire year! There’s a few exceptions that allow you to change benefits during the year (adoption and birth of a child are two exceptions), but for the most part you’ll be locked in. Put another way, you could be making a choice in October about what healthcare covers your family in December of the next year!
With that in mind, does the average American spend time making a wise choice about benefits? No, not according to a survey from a benefits company. About half of the survey respondents said they spent less than 30 minutes on picking benefits for the next year. Put another way, some people spend less time on decision that could mean thousands of dollars’ worth of impact on their household than time spent watching Netflix that day. Your benefits are an important part of your compensation. Treat it that way.
"For the Lord gives wisdom; from his mouth come knowledge and understanding" Proverbs 2:6 ESV
What happens if you don’t make an election during annual enrollment?
Most employers and HR departments will keep you on the same option you chose from the year before. This is not guaranteed! Don’t assume you’ll just be put in the same options as last year and don’t assume that the options are the same in terms of benefits offered or cost. You need to make time every year to review all the options and make elections.
If both spouses have a job with benefits, pay close attention
If you and your spouse both have jobs with benefits, extra care is required. For example, if both workplaces offer dental insurance, don’t assume both will cover braces the same way. It’s important to compare each benefit side by side and choose the best. This means you might end up with different benefits spread across both employers. Although you’ll have to spend more time on comparisons, it’s a worthy time investment.
How do I know my options during annual enrollment for benefits?
Your experience with open enrollment will vary depending on the size of your employer. Big companies will often have printed guides, a dedicated website, or fancy benefits tools to help with enrollment. Small to midsize companies will offer a different experience which might be an email or slide deck. In either case, use the resources and ask questions if something is not clear. You are entitled to understand the options before locking in a choice. Contact and HR person and ask questions to ensure you make an educated choice for your family.
Which benefits do I need to pay attention to during annual enrollment?
Benefits are unique to your company. You family’s situation is also different from year to year. With that in mind, here’s some highlights you should pay attention to when evaluating benefits options.
Medical insurance is the one we all think about when we think about benefits for good reason. Most midsize to large employers will offer 2-3 plans to choose from. If you’re expecting something in the coming year like a new child or major procedure, include those events as part of the process to see what plan the best for your family will be.
Healthcare accounts-HSA, FSA, or HRA
Some employers, depending on the specific health insurance you choose, allow you to set up an account that holds money that be used for healthcare expenses during the year. Review options here carefully and keep an eye out for whether your employer will put money into the account in addition to what you add.
Cleanings are important here but think beyond just regular cleanings. If you have a someone in your household who might need something like braces or other in procedure, review the plan options to see what is covered and what is not.
If your employer has life insurance options, it may be worth considering especially if you don’t have any life insurance.
If someone in your household is expected to need glasses or other vision correction, look closely here.
Retirement or 401k
Jobs that offer retirement accounts generally do not tie your ability to enroll to annual enrollment like other benefits. If you’re not enrolled already, however, now is just as good as any time!
Long Term Disability
Long Term Disability is very important and ensures a portion of your income is still paid to you in the event you are unable to work. LT disability is designed to start after you have been unable to work for a pre-defined period of time, usually a number of weeks your employer specifies.
Short Term Disability
Short Term Disability ensures your paychecks will continue if you are unable to work. ST disability will usually start after a waiting period (elimination period) of a number of days. The upper limit for the number of days this disability benefit will cover is usually designed to match up with LT disability.
Wellness is a newer benefit, but worth watching. Many companies have decided to not just focus on sickness, but keeping employees healthy and hopefully avoiding poor health altogether. Wellness programs at many workplaces have decided to pair incentives alongside their program. This means you might be able to get real money incentives or other rewards for staying healthy.
Paid Time Off
Some employers will allow you, during benefits enrollment, to purchase additional time off. If you have a big life event coming up next year, this might be the time to try this unique benefit out.
Choose wisely, but with humility
It's important to put time into benefits selection during your employer's open enrollment period. With that in mind, there is some level of speculation on the future involved. You may not get everything right, but do your best during the signup process and be at peace with your decision.
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