Although it might be tempting to let your current benefits stand when your workplace's open enrollment rolls around, it’s critical to review the details of your benefits and make any changes required.
You don't want to ignore open enrollment to avoid wasting money if a better plan or more affordable coverage is available.
We explore some of the key potentially money-saving moves to make during the open enrollment period based on Suze Orman’s advice.
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Review your current health plan
Start by looking at your current health plan and comparing it to the other available options. Find out if premiums have increased for your current plan. Beyond premium hikes, read the fine print to see if the costs have risen for any services you regularly use.
Orman wrote in a recent blog post, “If you are in good health and you have a big emergency savings fund that could cover your annual deductible, you may want to consider if using your plan’s high-deductible health insurance plan, which will come with a lower monthly premium.”
But Orman stresses that it’s not a good idea to choose a high-deductible health plan (HDHP) if you don’t have enough savings to cover the deductible.
Explore Health Savings Account (HSA) options
If you opt to switch to an HDHP, you might be able to open a companion Health Savings Account (HSA).
HSAs are tax-advantaged accounts with multiple benefits. The funds you contribute to an HSA are pre-tax, the funds grow without tax bills along the way, and when you use the funds for a qualified medical expense at any time, you won’t have to pay any taxes on your withdrawal.
Orman wrote in a recent blog post, “That triple tax break makes an HSA a great financial move if you have the ability to do some saving today. An added benefit is that some employers offer a matching contribution to an HSA.”
Double-check your doctors
If you like your current doctor and want to continue seeing them, take a minute to confirm that the doctor or provider you want is still covered as an in-network option in the coming year.
Unfortunately, things can change from year to year. It’s better to learn about the change now because you can potentially switch up your health insurance plan to retain access to your preferred doctors.
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Consider your spouse’s insurance options
If you and your spouse both have access to health insurance options through work, it’s a good idea to explore what’s available from each employer. You might discover a better option through your spouse’s employer-sponsored options.
Explore the wellness programs
Many employer-sponsored health insurance plans offer wellness programs. As you review your benefits, keep an eye out for potential wellness perks.
For example, you might get a discount on your premiums, a gym membership credit, or a gift card for completing specific wellness tasks. If you find a perk, don’t hesitate to take advantage of it.
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Don’t just rely on workplace life insurance
Many employers offer workplace life insurance policies. Although this coverage is nice to have, it’s generally not enough coverage to protect your dependents.
For example, many employer-provided life insurance policies offer a death benefit equivalent to one year’s salary.
Orman wrote in a recent post, “My general advice is that unless you already have large savings, you should aim for a life insurance policy with a death benefit that is equal to at least 20x to 25x your current salary.”
If the worst should happen, your family will have the financial safety net they need.
Beef up your retirement savings
Saving for retirement is critical to a stable financial future. Orman recommends saving at least 15% of your salary for retirement, which can include your contributions and any employer-matching contributions.
Start by determining how much you are currently saving for retirement. Next up, make the necessary adjustments to increase your retirement savings.
How do you make this adjustment to your budget? Orman wrote in a recent blog post, “My advice is that they just dive in cold. That is, commit to automatically saving 15% of their income ASAP. The faster this becomes a habit, the easier it is to pull off.”
Explore automated savings opportunities
An automatic savings strategy is a great way to stay on track with your budgeting goals. Some employers offer a savings plan through work.
Essentially, the company will send a portion of your paycheck into a dedicated savings account. Depending on your employer, you might even be able to receive a match for your savings contributions.
Bottom line
During benefits season, it’s a good idea to read through the fine print and seek out the best possible option for your situation.
Not only will making the necessary changes potentially help you get ahead financially, but making these money moves can help you protect your family’s future.
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