Preparing for Open Enrollment Season

For many companies, fall is open enrollment season for their employee benefits for the coming year. This includes health insurance and other benefit options offered by employers. A benefits package is an important part of an employee’s compensation package.

As you receive notices and updates from your company as a lead-in to the annual open enrollment, be sure to review this information carefully so you are prepared to make the best choices for you and your family this open enrollment season.

Health Insurance Options

October is the start of open enrollment season for many employer-sponsored health insurance plans. Even if your open enrollment season is a bit later, be sure to be prepared to review any changes to the health insurance options available for 2025 in light of your current coverage and any changing needs on your part.

Are the plan coverage options similar to what has been offered in past years or have they changed? How has your situation changed? This might include changes to your health situation or perhaps your family coverage needs. This might also include new providers or prescriptions, or perhaps a child has aged off of your family coverage.

You will want to review premiums, deductibles and coverages. Does it make sense to move to a high deductible plan in order to take advantage of an health savings account? Does it make sense to move from a high deductible plan back to regular coverage? Also be sure to review dental coverage for any significant changes.

HSAs and FSAs

This is a good time to assess your use of and need for medical savings accounts such as a Flexible Spending Account (FSA) or a Health Savings Account (HSA). Both types of accounts are funded with pre-tax contributions much in the same fashion as contributions to a traditional 401(k) or IRA. Both types of accounts allow for the use of funds from the account to cover qualified medical expenses with no tax consequences.

With an FSA, all of the money in the account must be used to cover qualified medical expenses by the deadline (usually the end of the year or a period shortly thereafter) or that money is lost to you. With an HSA, this money can be carried over if not used in the current year. This makes an HSA an ideal retirement savings account as money left in the HSA can be used to cover medical expenses in retirement if desired. In addition, money in an HSA can sometimes be invested for an added return.

In order to contribute to an HSA, you must have a high-deductible health insurance plan.  These plans typically have higher deductible limits than a regular plan, but also generally have lower premiums.1

Annual HSA maximum contributions for 2024 are $4,150 for an individual and $8,300 for a family. Like a traditional IRA, these contributions are made on a pre-tax basis.

Review Your Benefit Needs

Open enrollment season is an ideal time to review your current benefits versus your needs for the upcoming year and beyond. This should be done on a comprehensive basis including:

  • Your health insurance needs. Does a high deductible plan make sense along with an HSA? Are there family members aging out of coverage?
  • Do you need more life insurance through the company plan due to a family change such as getting married or having another child, or instead do you just want to increase your coverage in general? Do you need less life insurance coverage? Could paying for added coverage through the company benefit be superfluous?
  • Is the basic company disability policy adequate, or do you need to add more coverage via an addition to the basic benefit through the company plan or on the outside?
  • If offered through the plan, is your dental coverage adequate, or do you need to add a higher level of coverage?

Although this is typically not part of the open enrollment process, this is also a good time to review your participation in the company 401(k). Are you contributing as much as possible? Do you need to adjust your investment allocations including how your contributions are invested?

For most employees, their company’s employee benefit plan is their main source of insurance coverage of various types. Employee benefits are a key part of your overall compensation from your employer, and you should take full advantage of these benefits and tailor them to your unique needs to the fullest extent possible.

Contact your Wedbush financial advisor to discuss your employee benefits package during open enrollment season to resolve any questions you have. The team is ready to help you to ensure you are taking full advantage of this important benefit.

1: UHC

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