Welcome to fall, the season of changing leaves, falling temperatures, and, of course, open enrollment for employer benefits. Open enrollment is the period of time when eligible employees can enroll or make changes to their employer-sponsored benefits.
Unless you experience a qualifying life event, such as getting married or having a baby, open enrollment is the only time of year to make changes to your insurance coverage and spending account contributions. That’s why it’s important to carefully review all options and select benefits that make sense for your particular situation.
Following are eight common open enrollment mistakes to avoid.
1. Failing to review all options
Many employers offer multiple types and levels of health, life, and disability insurance coverage. Be sure to review all options available to you and select coverage levels that make sense for your personal life and financial situation. Your wealth manager can help you evaluate your options and select appropriate levels of coverage.
2. Overlooking plan changes
Don’t assume this year’s coverage is the same as last year’s. Both employers and insurers can change plan details, such as coverage levels, premiums, in-network providers, and out-of-pocket costs. That’s why it’s important to carefully review all plan documents for updates.
3. Forgetting to consider how your life has changed
It’s important to reevaluate your benefits in light of any major life events that occurred over the past year, such as marriage, divorce, the birth of a child, etc. Failing to account for these important changes may leave you underinsured or lead to higher-than-necessary costs.
4. Selecting the wrong type of health insurance coverage
Many health insurance plans offer different levels of coverage. Selecting the wrong level may result in insufficient coverage or require you to pay higher premiums than necessary.
5. Missing out on employer matching contributions
If your employer offers a 401(k) match, make sure you’re contributing enough to take full advantage of this money.
6. Overlooking the benefits of flexible spending accounts (FSAs) and health savings accounts (HSAs)
FSAs and HSAs offer a tax-advantaged way to save for qualified medical expenses. Take time to understand how these plans work, the differences between the two plan types, and how you can maximize your contributions.
7. Failing to update beneficiaries
If you have employer-sponsored life insurance or retirement accounts, it’s important to regularly review your beneficiary designations to ensure they continue to reflect your wishes as your life evolves over time.
8. Procrastinating
Waiting until the last minute to enroll in benefits can lead to rushed decisions and missed opportunities. Begin the open enrollment process as soon as possible, and work with your wealth manager to ensure your benefit elections are in line with your overall financial plan and long-term goals.
Gene Gard, CFA, CFP, CFT-I, is a Partner and Private Wealth Manager with Creative Planning. Creative Planning is one of the nation’s largest Registered Investment Advisory firms providing comprehensive wealth management services to ensure all elements of a client’s financial life are working together, including investments, taxes, estate planning, and risk management. For more information or to request a free, no-obligation consultation, visit CreativePlanning.com.
