Make the Most of Open Enrollment
"Open enrollment" refers to those few weeks--usually in the fall--when your employer allows you to reaffirm or change the options you have chosen for your health insurance, life insurance and other benefits.
Many employees reaffirm their existing options simply because they don't understand their benefits or they aren't sure how to maximize their choices. Others change their options, but they are not really sure whether their changes make sense. Understanding your benefits and doing some homework before the open enrollment period will help you make the right open enrollment choices.
Flexible Spending Account
Your employer sets aside an amount you designate for your FSA tax-free from your paycheck. You can use money in your FSA to pay for qualified medical and dental expenses, prescription drugs and medical devices. To get the biggest bang for your FSA buck, get out your checkbook and your receipts for medical care or log onto your online banking app to help you decide how much money to set aside in the coming year.
Analyze each expense as you go through the process. Was this a typical year in terms of medical costs, or was there some catastrophic accident or disease that drove your expenses outside of the normal range? Look at the coming year. Will you need a new prescription for eyeglasses or contact lenses? Do you and your spouse plan to add a baby to the family next year? All these facts have an impact on your healthcare spend for the coming year.
Taking all of these factors into consideration, estimate the amount you will pay for medical expenses, dental expenses, prescription drugs and devices such as eyeglasses throughout the next year. When you complete your open enrollment form, designate this amount to be deposited into your FSA. Don't overestimate your FSA designation; you won't get back any funds you do not spend on healthcare. If you don't spend the money, you lose it.
Throughout the coming year, make a note of any expenses that you can anticipate for the following year. If the dentist says that your child will need orthodontia soon, work the cost of braces into your calculations for the following year's FSA designation.
Comparing your Spouse's Benefits
Another issue that often arises during open enrollment is the question of whether to cover your spouse on your medical insurance. If your spouse has insurance through his or her job, it may seem like a simple exercise of comparing the cost of coverage on both plans and insuring the family on the plan that costs less.
Cost, however, is not the only consideration when it comes to health insurance. If choosing your doctors and specialists is important to you, it may be worth the extra cost to pay for an indemnity plan, where you can choose your own medical providers, instead of paying less for a Preferred Provider Option plan, where you must choose providers from a network or pay more for their services.
Other factors you should evaluate in addition to the premium cost include a plan's deductible, its copay, its covered services, and its maximum lifetime benefit. Choose coverage through your employer or your spouse's, but choose the coverage that makes the most sense for you.
Qualifying Life Events
Even after open enrollment ends, you can change your elections if you experience certain qualifying life events. For instance, if it makes sense to buy health insurance through your spouse's employer, but you are concerned that your spouse's job is unstable and you don't want to find yourself without coverage if your spouse loses his or her job, you can still choose to insure your family through your spouse's employer. If your spouse loses his job, or shifts from full-time to part-time employment, or vice versa, the change counts as a qualifying life event that enables you to change your health insurance options.
Other qualifying events include getting married, getting divorced, having a child who has a change in status as a student, and adding or removing dependents through death, birth, adoption or assumption of legal guardianship.