It’s open enrollment time for many employer-sponsored insurance plans. Many people just renew the same old plan, without considering what they can do to better use their health care and life insurance dollars. However, with premiums and other costs constantly going up, it pays to take the time to review your options. Here are six things to consider during open enrollment:
When we experience life changes, we often forget that these changes can impact insurance policies. Marriage, divorce, death and the addition of a child mean that it becomes necessary to change your beneficiaries. Check your plans — especially your life insurance and retirement plans — to make sure that your beneficiaries are updated. Who is designated on your insurance policies supersedes what you have in your will, so don’t forget to make sure they match up.
2. Long-term care insurance
Open enrollment season now comes with more employers offering access to long-term care policies. While you will probably have to pay the full premium, getting it through an employer can mean a group discount, along with a wide range of coverage options. If you are concerned about long-term coverage, this might be a good time to get a policy.
3. Disability insurance
Even though many employers offer some disability coverage as a standard benefit, it may not be as much as you need, since many policies cover only about 60% of your base pay, and there may be a monthly benefit cap. Double-check the disability coverage you already have, and determine whether you need a little bit more. If you get your own coverage, you can take it with you when you switch jobs, and if you are paying your own premiums, the benefits are tax-free.
4. Change your flexible spending account contribution
If you have seen an increase in co-pays and deductibles on your health insurance, it might be worth it to increase your monthly contributions to a flexible savings account. Your contributions are pre-tax, and they can help you cover expenses that your insurance policy doesn’t. Make sure you understand the limits on contributions, and realize that if you do not use the money in your account by the end of the year, you will lose it.
5. Consider a high deductible health insurance plan
If premiums are becoming too much to handle, you might consider a high deductible health insurance plan. These are plans that require you to pay more out of pocket, but come with lower premiums — sometimes drastically lower premiums. If your employer offers a high deductible option, you can save on your premiums. Combine your high deductible health insurance plan with a Flexible Spending Account or a Health Savings Account, and you can ease the difficulties associated with paying more out of pocket while receiving tax benefits. Warning: A high deductible plan may not be practical for someone with frequent illnesses and very high health care costs.
6. Employer health incentives
Some employers are offering incentives and discounts for those who are willing to go the extra mile to prove their healthy lifestyle. Find out whether or not your employer has incentives if you are willing to take a blood test, fill out a health questionnaire or join a gym. If you can prove your efforts to boost your health, you might eligible for special employer programs.
In the end, make sure that you carefully review your options. You want to make sure that you have the coverage you need, as well as ensuring that your employer sponsored plans are working for you.
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