How to Prepare for Open Enrollment

Open enrollment is the time of year when employees can change their workplace benefits, or enroll in new ones. For most companies, this happens every fall. So if your employer’s open enrollment season is coming up, here is what you need to know before you enroll.

What does open enrollment include?

Typically, open enrollment includes employer-sponsored health insurance and other workplace benefits. Depending on where you work, you might have to re-enroll every year, or only make changes when necessary.

Open enrollment dates vary by employer, but it often spans a few weeks every fall. The changes you make during open enrollment will usually kick in on Jan. 1 of the upcoming year.

When should you review your benefits?

It’s a smart idea to review your benefits every year, if only to reacquaint you with what’s offered, and what you might be eligible for. But it’s especially important to review your benefits when you’ve experienced life changes. 

For example, if your family has grown, you might find that a different plan offers more benefits now Or, you might need to change your dependents, cancel a plan or sign up for a new benefit. Open enrollment is the ideal (and sometimes, the only) opportunity to make those changes.

Prepare for open enrollment

Before it’s officially open enrollment time at your place of work, take some time to see how your current health insurance plan has worked for you. Figure out how much you spent this year on healthcare, and know what your deductible, co-pay, and premium costs. That way, when it’s time to review benefits, you can compare your current plan to other options.

You should also pay attention to what would be covered in a new plan, and whether your current doctors or services would be in-network.

FSA, HSA and other benefits: Prepare for open enrollment

During open enrollment, you can add or adjust a flexible savings account (FSA) or health savings account (HSA.) These accounts offer tax benefits for putting money aside for qualified expenses. 

These accounts cover similar medical and care costs, but there are some differences. Make sure you check with your employer to see which accounts they offer, and which would be better for you.

You can also update or add on disability and life insurance policies, if needed.

Here is an overview of those benefits:

  • Health Savings Account (HSA) – HSAs are savings accounts funded with pre-tax contributions. They also have tax-free earnings and tax-free withdrawals for qualified medical expenses. If you don’t spend the money in your HSA, don’t worry; it will continue to roll over to the next year until you use it. 2024 account limits: $4,150 for self and $8,300 for families, plus $1,000 catch-up payment for anyone aged 55 or over.
  • Health Flexible Savings Account (FSA) – Like HSAs, health FSAs are funded with pre-tax money and can be deducted from tax-free for qualifying health and medical expenses. Unlike an HSA, FSA accounts do have a “use it or lose it” rule, so you will lose out on any unspent money in your account. (Some employers do allow a grace period of up to 2.5 months to spend that money, or up to $640 in rollover money.) Projected 2024 account limit: $3,200
  • Dependent Care FSA – A Dependent Care FSA offers the benefits of an FSA for child or adult care expenses. Check with your employer for specific rules and guidelines they might have. With a dependent care FSA, you pay out of pocket and then get reimbursed later, so make sure to keep excellent records of your costs and set a reminder to apply for reimbursement when it’s time. 2024 account limits: $5,000 per year per household, or $2,500 for married filing separately.
  • Disability insurance – Disability insurance is a frequently forgotten but very important benefit. It’s meant to replace your income in the event of an illness, injury or other disability that prevents you from working. Read my post about disability insurance here. 
  • Life insurance – Many employers offer a life insurance option, and it’s a good idea to sign up. That being said, you often need to supplement that insurance with other life insurance sources, but you should still learn more about what is offered through your employer. Read my post about life insurance here.

About Your Richest Life

At Your Richest Life, physician-focused financial planner Katie Brewer, CFP®, wants to help you build a successful financial future. For more information on the services offered, contact Katie today.

The post How to Prepare for Open Enrollment appeared first on Your Richest Life.

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