With Fall just around the corner, we are about to enter an employee open enrollment benefits season different than we’ve experienced in the past. Many companies are operating under different conditions because of COVID-19, and employees are more concerned than ever about having the right coverage in place during these uncertain times. Let’s look at open enrollment planning during the COVID-19 pandemic and how you can prepare.
Get ready for a virtual enrollment experience
Virtual enrollment has been trending for several years, and the COVID-10 pandemic is making it more of a common practice, so chances are your organization may hold the entire thing online. The good news is this can give you more time to think things over and discuss with your family in the comfort of your home.
Open the benefits packet, read the packet
Employers go to great lengths to arm employees with helpful health benefits information. The first step toward success is to block out some time to go through the materials. Know how much your health benefits cost you, or maybe your employer picks up 100% of your premium. The more knowledge you have about your benefits, the more satisfied you’ll be.
If you’ve read the materials and are still not sure what to look for, ask for clarification. Many companies set up time for employees to meet with Human Resources (although likely virtually this year) about their benefits during open enrollment. It’s also a terrific thing to discuss with your financial planner!
Big changes in the year ahead
Getting married or divorced? Having a baby? Anticipating major medical expenses? If you’ve got life changes happening over the next year, make sure your benefits reflect that. For example, if you’re getting married, you might need to compare your health care benefits to your future spouse’s plan to see if you want to join theirs instead.
Measure your needs
You may think the more health insurance, the better. But you may be paying for coverage in your policy that you don’t need. Instead, make an assessment based on your family’s real health needs.
If you or someone in your family has special needs, or a chronic health condition, plan for that. But if you’re healthy, look at lower premium options. For instance, with a high-deductible health insurance plan you’ll pay out of pocket until you reach your annual deductible (usually several thousand dollars), but your monthly premiums can be significantly lower than traditional health plans. On the other hand, if you have ongoing health issues or school-age kids that will likely need doctor visits—and maybe even an occasional emergency room visit—a plan that has higher monthly premiums, but a lower overall deductible might be more cost effective. Make some assumptions for the coming year and do the financial calculations.
Don’t worry about COVID-19 treatment
Good news for all medically insured members is COVID-19 treatment is considered an essential benefit. Tests, treatments, and likely future vaccines are currently covered by most plans.
Explore a flexible spending account
A flexible spending account allows you to set aside money tax free for qualifying expenses. Essentially, you can reduce your taxable income by paying for things you may be purchasing already. The IRS’ Publication 502 explains what’s covered and what’s not, and it includes a wide range of items, from medicines to crutches to acupuncture. Even some home improvements are covered if they’re medically necessary (think entrance ramps, handrails, and lowering or modifying kitchen cabinets or equipment).
If you’ve never participated in an FSA, give it consideration this coming open enrollment.
FSAs operate on a use-it-or-lose-it basis, where money put into the account is lost if it isn’t spent in the contributing year. So, what if you find yourself on the wrong end of a use-it-or-lose-it FSA with time running out and a large balance? Some employer plans may offer a grace period to spend unused funds from the FSA each year, provided the expense took place in the contributing year, or the plan may allow you to roll over $500 from one year to the next. This is especially true now during the COVID-19 pandemic. Check with your employer to see if this has been implemented on our benefit plan.
Think strategically with a health savings account
Don’t think of a health insurance policy just as something you call upon when you’re sick. Think of it as a part of your financial wellness. A health savings account (HSA) allows you to contribute tax free into an account that rolls over year after year. If you’re young and/or healthy now, what you contribute this year likely won’t be used before year’s end. The HSA contributions can be placed in a savings account or if available, invested in a mutual fund (options vary by employer).
Money goes in tax free and comes out tax free if you use it for qualifying medical expenses (now, or later in retirement).
“There’s no use-it-or-lose-it provision, and there’s a tax advantage to using it in retirement to pay for medical expenses, including premiums. That way, you can use your 401(k) or other savings to pay for other things.
It is generally not a good idea to have the majority of your life insurance coverage through your employers, as your employment and insurability may change and the underlying policy may not be portable (i.e., you may not be able to convert it to personal coverage). Nevertheless, if life insurance is offered to you, be sure to ask your employer about the portability of the plan. Life insurance coverage is a key item your financial planner can discuss with you as well. At Johnson Bixby, we have an Insurance Specialist on our team to help guide you through any insurance needs you may have. Reach out to Jeri Boston with questions!
Help When You Need it Most
Check with your employer to see if they offer an Employee Assistance Program (EAP). Your EAP is designed to help you lead a happier and more productive life at home and at work – something extremely important during these tough times in our world. If you haven’t taken advantage of this service, it may be a great time to do so. You – or anyone in your family – can call for confidential access to a Licensed Professional Counselor, legal advice, help with access to elder and child care. Most plans have unlimited online/phone access support and up to 3 in-person visits.
Open enrollment can be stressful but keeping these things in mind will help you navigate the many decisions you face. If you still have questions, we’re here to help. Give us a call.