Your employer funded insurance open enrollment period usually rolls around once a year. A lot of people don’t put enough thought into their options and benefit choices. With a well rounded financial plan the type of coverage your family needs and benefits for your specific situation should be taken into account.
Sam is going to go over five things that you should consider when revising or selecting a health coverage plan. He goes into why it’s so important to be proactive and to weigh the options available for you. He talks about benefits and drawbacks of having an HSA or an FSA, and even how you can be covered, get tax benefits, and have a little extra to invest.
Sam also talks about how he sees people using an HSA and how he recommends using one. He also talks about similarities and differences in an FSA. He also talks about use it or lose it, grace periods, and rollover options. The enrollment period is a good time to look at retirement benefits and other insurance options. Sam also talks about common pitfalls and some of the biggest mistakes that people make.
[02:08] Open enrollment. Health insurance is a big part of open enrollment. If you're not going through an employer and looking at an ACA or exchange plan the timeframe will typically be November to January.
[03:03] Employers also offer an open enrollment plan where employees have the opportunity to choose their health insurance and other benefits.
[03:20] This episode is about open enrollment sponsored through an employer and five things that are important to be aware of.
[03:43] Be proactive. Know when the enrollment period is and put thought into what benefits you actually need.
[04:52] Weigh the pros and cons of the health insurance plans available to you. Look at things like premiums, deductibles, and what types of physicians are covered in your plan.
[06:04] Look through your spouse's offered plans and see what makes the most sense for your family.
[06:29] Consider an HSA or FSA.
[06:33] An HSA can be one of the most efficient accounts for saving for long-term health expenses.
[06:53] To be eligible for an HSA, you will need a high deductible health insurance plan. It's usually from $1500 to $3000.
[07:29] You and your employer can contribute to an HSA. There's a triple tax benefit because you contribute on a pre-tax basis.
[09:16] Healthcare expenses are one of the biggest expenses in retirement. The best way to use your HSA is to pay most expenses out of cash flow, so the investment portion can grow.
[11:04] An FSA is pretax dollars, but there isn't an investment portion. You can reimburse yourself for certain specified medical expenses. There is also a dependent care FSA that you can use for daycare. This is a pre-tax option for those expenses.
[12:27] Use it or lose it feature. The money put in that calendar year needs to be used.
[13:15] Do you have enough? You also have the opportunity to up your retirement contributions and look at life and disability insurance.
[13:45] A common pitfall is thinking that the basic amount of life and disability insurance from your employer is all that you will need.
[14:55] This is also a great opportunity to do a financial check-up.
[15:38] Legal insurance awards you an opportunity for legal services. Make sure you know what's actually covered in those programs.
Certified Financial Planner Board of Standards, Inc. (CFP Board) owns the CFP® certification mark, the CERTIFIED FINANCIAL PLANNER™ certification mark, and the CFP® certification mark (with plaque design) logo in the United States, which it authorizes use of by individuals who successfully complete CFP Board’s initial and ongoing certification requirements.
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