Tara and Erik are a two-income family. Tara works as a paralegal and Erik works as a family counselor at a nonprofit for troubled youth. They have a two-year-old son and Tara is due with their second child in a few months. A few weeks ago both Tara and Erik received paperwork from their employers that listed their benefits and announced something called “open enrollment” where they could possibly change the benefits they receive through work. Both Tara and Erik glanced at the sheaf of papers but neither one took the time to go through them. With meetings and deadlines and children to care for and errands to run the papers just got pushed to the side. Unfortunately, they didn’t take the time to realize that if they took time to take advantage of “open enrollment” they can:
- open a flexible spending account to help lower their taxes and save for out of pocket health costs at the same time
- enroll their child in a new dental plan for dependents under one of their plans
- increase the amount of money they’re both currently putting toward their retirement savings plans
Just a few minutes and Tara and Erik could have taken advantage of new features to improve their family’s health insurance coverage, reduce their taxable income and save for the future. That’s what “open enrollment” season can mean to you and your family.
Numerous employers hold what’s called “open enrollment” during the fall. This is a specified time (for example November 1 – December 15) when you are able to review the benefits your employer offers and decide whether or not you want to maintain your current benefits or change them.
Let’s back up to review what exactly a benefit is. A benefit is something that your employer offers you in addition to your regular paycheck for the work you perform. Employers can choose what benefits to offer employers. Examples of benefits that employers may offer include:
- Health insurance
- Life insurance
- Flexible spending accounts
- Short and long-term disability insurance
- Retirement savings plans
- Dental plans
- Vision benefits
- Legal coverage
- Accidental death and dismemberment
- Vacation and sick leave
- Mental health benefits
At the beginning of the open enrollment season your employer’s Human Resources (HR) department should send you a statement outlining the current benefits you hold, all of the benefits your employer offers and which benefits you are eligible for.
Look over your benefits statement carefully. If you are married, be sure to review both your and your spouse’s benefit packages to see what benefits you are receiving and how much it is costing your family. By reviewing both benefit plans you may realize that you have more coverage than you need in some areas, not enough in other areas, or that you could save money or improve your coverage by switching plans (i.e. having your children listed on your husband’s health insurance, with him as the primary policy holder and your children listed as dependents.)
Once you understand which benefits you currently hold, ask the following questions about each benefit:
- Am I automatically enrolled in this benefit? For example, some companies will automatically enroll their employees for life insurance or accidental death and dismemberment insurance. Some benefits may be fully paid for by your employer; others may carry a premium, or cost to you. If you are automatically enrolled in any benefits that carry a cost to you, ask your HR department if you are required to maintain that coverage. If you’re not required to carry the coverage, ask the HR department about any plusses and minuses of having the coverage.
- How much am I currently paying for the benefit? Remember to include both money that is deducted from your paycheck (also sometimes referred to as a monthly premium) and out of pocket costs. Let’s take health insurance as an example. If you have health insurance through your employer, review your benefits statement and ask:
- How much is deducted from my paycheck every pay period for the insurance?
- Is there a deductible that I need to meet every year first before the insurance will begin paying for out-of-pocket costs?
- Is there co-pay that I am required to pay for office visits, prescriptions, etc.?
- The next question you want to know the answer to is -- will those rates increase? If so, by how much?
- Is the benefit being expanded or restricted in any way? Are there any new limitations on the benefit? Are any new features being added?
- Do I need to re-enroll for each benefit in order to maintain coverage?
- Do I need to re-enroll for just myself or for each of my dependents covered under the plan?
- Is the eligibility changing for the benefit? For example, if you were not previously eligible for a specific benefit, say life insurance, are you eligible now? Are your family members or dependents eligible?
If you are interested in enrolling for a new benefit you were not previously eligible for, review your open enrollment information or ask your employer’s HR representative:
- How and when can I enroll? Check to see if you can enroll online or if you need to fill out paperwork to submit to the HR department.
- How much does the benefit cost? Will the cost be deducted from your paycheck or paid out of pocket or both?
- When does coverage begin? Sometimes coverage will begin the day your paperwork is received and processed. Sometimes there is a delay if you enroll during open enrollment.
No matter how busy life is, take just a few minutes during your employer’s open enrollment season every year, beginning this year, to take control of your benefits package for you and your family today. Just a few minutes to read, review and respond can mean savings, new benefits, and increased peace of mind knowing that you’re taking advantage of plans that can help you care for your family.