Checklist: 6 Simple Steps to Tackling Open Enrollment
Remember, remember … the first of November?
Yes, we realize the original literary reference is to the fifth, but we’ve taken some liberties with the poem about Guy Fawkes Day for a good cause—to remind you that open enrollment officially kicked off on the exchanges at the beginning of the month.
For coverage starting January 2017, you have from now until December 15 to make important elections that could impact your health—and wallet.
But just because that’s more than a month away doesn’t mean you should drag your feet. For starters, that date is the government’s deadline for picking health coverage—if you’re electing benefits through your company, your deadline is likely sooner.
Wait until the last minute, and you may end up rushing through the process: According to an Aflac study, 46% of people spend a mere half hour (or less!) reviewing their health plan offerings.
Since we know that this end-of-year ritual can be daunting, we’ve whipped up an easy-to-follow open enrollment benefits checklist that helps breaks down the process for you into six key to-dos.
Evaluate Your Medical Coverage Offerings
It’s one of the biggest open-enrollment decisions: Which health plan will you pick?
It’s also one of the more complicated ones, since your choice depends on multiple factors:
- How often you tend to visit the doctor
- Whether you anticipate a change in your health care needs
- Whether you have more dependents to cover, like a new baby
- Whether you take regular prescription medications
- How much the plan will cost you
Speaking of, if it seems like you’ve been paying more out of your own pocket for health care year after year, you’re not alone.
According to a 2016 Kaiser Family Foundation study, the amount that workers contribute to their family’s health-insurance premiums have skyrocketed by 58% over the past 10 years.
And remember that there’s more to your health care expense picture than just your monthly premium—you also need to factor in your deductible, copay, coinsurance, total out-of-pocket limits and out-of-network coverage.
So with open enrollment season upon us, it’s important to weigh all these factors against your coverage options to see which makes the most sense for your situation.
And regardless of which type of health plan you pick, find the time to double-check that your doctors, specialists and preferred hospitals are still covered by your chosen network.
For a more detailed rundown of factors to consider before choosing a health plan, see our checklist.
Look Into Dental and Vision Benefits
Don’t neglect those pearly whites and baby blues.
Once you have your core health plan hammered out, check to see if your employer also offers dental and vision coverage. Some health insurance plans may incorporate these benefits already—but if they don’t, you may be able to elect standalone plans.
For vision insurance, ask if your company’s plan is a vision benefits plan or a vision discount plan.
A vision benefits plan operates like traditional insurance: You pay a premium in exchange for eye care coverage and, possibly, an allowance for frames and lenses.
A vision discount plan, meanwhile, typically offers lower premiums, but only for a percentage discount off services from participating eye practitioners.
And when it comes to dental insurance, ask yourself these key questions: Do you only need to cover preventive checkups and cleanings? Or do you anticipate needing such services as root canals, oral surgery or orthodontics in the coming year?
These questions will help inform the level of coverage you may choose to select.
One other thing that may play into your decision?
Unlike health insurance, adult dental and vision coverage is not required under the Affordable Care Act. So even though it may be a good idea to purchase both types of plans, you won’t be penalized for not having them.
Determine If You May Want an FSA or HSA
For a tax-advantaged way to help offset some out-of-pocket medical costs, you can consider opening either a flexible spending account (FSA) or a health savings account (HSA).
Both types of accounts enable you to use pretax money to cover eligible health expenses, such as premiums and deductibles, over-the-counter medications, prescription eyeglasses and acupuncture.
The differences between the two?
Your company owns the FSA, and if you don’t use all the funds by the end of the year, you could end up forfeiting the cash. (Your employer may allow up to a $500 rollover, but they aren’t required to do so.)
For 2017 the maximum you can contribute to an FSA is $2,600, regardless of whether you use the account for personal or family expenses.
By contrast, you own an HSA, your funds can be rolled over, and the money can be invested—but you can only contribute to the account if you have a high-deductible health plan.
For 2017 the contribution limit is $3,400 for individuals, and $6,750 for a family, with an additional $1,000 catch-up contribution for those who are 55 and older.
Reassess Your Retirement Contributions
How’s your nest egg doing?
Open enrollment can be a good time to ask yourself this question to help determine if you may want to change your contributions going into 2017.
For starters, if your employer offers a 401(k) match, check to see if you are contributing enough to maximize that match.
According to a Financial Engines survey, one in four employees don’t take full advantage of this benefit—leaving, on average, $1,336 in potential retirement money on the table each year.
Second, think about whether you’re on track to meet your retirement number, based on the goals you’ve set for your golden years.
Not contributing quite enough toward that future seaside cottage? Here are a few ways to give yourself a little extra savings motivation.
Review Your Insurance Options
Although open enrollment is most often associated with health insurance, there are other types of coverage your company may offer that could help protect your income:
Life insurance: If you have a spouse, children or other dependents who rely on you for financial support, a company-sponsored life insurance policy can help provide some level of protection for your family—or help supplement any existing life insurance you may have.
Disability insurance: The reality is that you never know when a disabling injury could happen, so consider calculating your PDQ—personal disability quotient—to see what the chances are that someone in your demo could suffer a disability.
Now that you’ve run your number, get to know what short- and long-term disability insurance options are available to you, so you’re covered should a temporary illness or more serious disease keep you from being able to work.
One important thing to check for, specifically, is whether your company offers “own occupation” versus “any occupation” disability insurance. Own-occupation policies tend to offer better benefits because they consider you disabled if you’re unable to perform the same job you held. Any-occupation policies define disabled as being unable to perform any job for which you are reasonably qualified.
Accidental death and dismemberment insurance: Yes, it’s morbid to think about, but this type of coverage can provide an additional financial cushion in the event an accident causes you or someone in your family to die; lose a limb; or suffer impairment to speech, hearing or eyesight.
Update Your Beneficiaries
If you’ve elected all your benefits, congrats! But you’re not off the hook just yet ….
Have you double-checked—even triple-checked—that all of your designated beneficiaries are up-to-date?
If you’ve recently been through a major life event—like tying the knot or bringing home a bundle of joy—then chances are you’ll want your new family members to be your beneficiaries over great aunt Martha or second cousin Earl.
And it’s important to make those updates sooner rather than later, so your insurance payouts or retirement money will eventually go to whom you intend it to—especially considering that your beneficiary designations trump what’s written in a last will and testament.
LearnVest Planning Services is a registered investment adviser and subsidiary of LearnVest, Inc., that provides financial plans for its clients. Information shown is for illustrative purposes only and is not intended as investment, legal or tax planning advice. Please consult a financial adviser, attorney or tax specialist for advice specific to your financial situation. LearnVest Planning Services and any third parties listed, linked to or otherwise appearing in this message are separate and unaffiliated and are not responsible for each other’s products, services or policies. LearnVest, Inc., is wholly owned by NM Planning, LLC, a subsidiary of The Northwestern Mutual Life Insurance Company.