Tom: We have a very important topic for everyone this morning – open enrollment!
Mellody: You are absolutely right, Tom. It may sound mundane, but the open enrollment period is right around the corner. For those who may have forgotten, this is the period each year where employees are able to adjust their benefits options, or anyone who gets healthcare coverage through the affordable care act can change which plan they want to use. Usually open enrollment lasts 2 – 3 months, and generally happens at some point between mid-October to the beginning of February. That may seem far away, but this morning I want to talk about what options people should be looking out for, and give our listeners time to prepare before this important period is upon us!
Tom: What do you recommend we do to prepare ahead of time?
Mellody: The most important thing that you need to do before your open enrollment period is understand what your options are, and consider which choices are best for you. First, if you are covered through employer benefits, go to your HR department and ask them to tell you what you are currently signed up for now, what your alternatives options are, and if they can give you materials explaining these options. Then look at what your current coverage is costing you now, so that you can compare it with your choices for the coming year. And finally, if you are married, you also want to compare the coverage and benefit options from your employer to those of your spouse. If one of your employers offers better coverage and benefits, you should both take advantage.
Tom: OK. Let’s talk about healthcare, the big topic for open enrollment.
Mellody: A couple of things that you have to remember about open enrollment and healthcare options: first, unless you have a major life change, such as getting married, or having a child, this is the one time each year you can change your coverage, so make sure to take time to review your coverage. Consider changes to your healthcare needs. If you are never sick, look at the lower premium plans. If you head to the doctor at the first sneeze, look for a plan with a higher premium but lower deductible plan. You also want to consider your other options, such as flexible spending accounts and health savings accounts, both of which allow you to contribute pre-tax dollars for healthcare costs. Overall, you just want to make sure your coverage matches your needs.
Tom: What should we know about retirement options?
Mellody: The most important thing to consider when it comes to retirement options is to ensure that you are taking advantage of any employer matched retirement plan. This is free money, so if your employer matches your contributions, you really should be contributing at least that much of your salary. You also want to review your past choices when it comes to the funds you are purchasing. Take time to reach out to the person that oversees the program for your company and ask them questions about what they would recommend. A survey by Aflac noted that many people continue to invest in the same funds over the years, rather than changing their choices to fit their age and need, and you want to avoid this.