Open enrollment for workplace medical and health benefits begins soon for millions of workers across the country. To help you maximize your opportunities, here are few tips I share with my clients:
Health Insurance
Now is a good time to evaluate how you used your medical insurance last year. If your company gives you a choice of providers, you'll want to review whether the deductible level, choice of doctors and cost all still make sense. If you don't use your medical insurance as often as you thought, perhaps a higher-deductible plan can help keep the monthly costs down.
Health Savings Account
If you have a high-deductible plan, ensure you are enrolled in the Health Savings Account (HSA). If you are over 55, there is a $1,000 catch-up contribution allowed for the HSA. The Health Savings Account (HSA) contribution limits are $4,400 for self-only coverage and $8,750 for family coverage. Individuals age 55 and over can make an additional $1,000 catch-up contribution. The deadline to contribute for the 2026 tax year is April 15, 2027.
Planner's tip: Don't forget, you can invest your money in the HSA - there are usually several mutual fund choices like a low-cost equity index fund or an interest-bearing account. Also, try not to use the HSA funds each year. Instead, keep the money in the HSA for retirement health care expenses. Unused HSA funds are allowed to roll over to future years.
Flexible Spending Account
With an FSA, you contribute pretax dollars through payroll deductions (like an HSA). However, the funds in a FSA must typically be used within the plan year unless your employer offers a grace period or limited rollover.
Life Insurance
Group life insurance is usually cheap or free so it can make sense to elect the coverage, however group insurance is not perfect. Most often group life is not portable, meaning you can't take with you if you leave your employer. Or if you can, the cost is usually higher. Group life is also usually banded to increase in cost over time.
Planner's Tip: Consider purchasing life insurance outside of the company so you are not tied to the company's plan.
Disability Coverage
To the extent you need it, maintain your group short-term and long-term disability coverage, which is often the cheapest coverage you will find. However, group disability usually has limitations, such as a restrictive definition of disability or no portability, or worse no coverage for a partial disability, which is the most common form of a long-term disability.
Planner's Tip: You may want to see if your company offers supplemental disability in addition to the group, or consider pricing out a stand-alone policy with a private company.
Accidental Death Coverage
If you always opt in for the Accidental Death and Dismemberment Life Insurance (AD&D), you may want to reconsider. AD&D only covers very specific causes of death – think extreme accidents where you lose an eye or a limb. These are very rare; hence the premium is so cheap.
Planner's Tip: You may want to consider allocating the premiums from the Accidental Death and Dismemberment toward buying more life insurance where the definitions of death are not as restrictive.
Beneficiary Check
Use this time to double-check the beneficiaries on all your retirement plans at work and group life insurance policies. This is also a good time to consider estate planning. Should your Group Life Insurance be owned by an insurance trust? Does your 401(k) and HSA have a contingent beneficiary? Now is a good time to check.
As you go through open enrollment, take the time to think through each choice. It may seem like a mindless ritual, and it can be tempting to let your coverage roll over from last year, but that may cost you. Getting a second opinion from a benefits consultant or experienced financial adviser can help validate your choices or uncover opportunities you were unaware of previously, all of which may make your benefits enrollment process a lot less tedious. Now that's a box worth checking.
For a more detailed review, please feel free to schedule a Complimentary Open Enrollment Call or email me at maloi@sfr1.com