Key Points:

• Choosing employee benefits during open enrollment is the only time throughout the year for most people to make changes.
• Coordinating available benefits among spouses is important in making the best choices for couples and families.
• Knowing whether you expect a high-usage or low-usage health care year can guide decision-making in this key employee benefit area.
• Evaluate your ability to use additional options and compare prices for coverage outside of your employee benefits to understand whether paying for coverage is worth the premiums.

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It’s employee benefits open enrollment time again! And it can certainly sneak up on you. Maybe your employer recently sent you that long employee benefits PDF, shared your benefits website or portal, or invited you to attend an enrollment webinar. With an enrollment deadline looming, how to choose employee benefits can be overwhelming!

It can feel like even more to do if your partner or spouse also has open enrollment coming up. Sometimes, their enrollment window might not align with yours. And you might still want to compare what’s available to them with what you’re being offered to make the right decisions for your family.

So how can you navigate it all?

How Can You Choose the Right Health Insurance Benefits?

It all starts with understanding your options. Employers will often highlight changes from year to year in the first sections of your employee benefits guide or an update sheet. They also tend to share webinar sign-ups to review available benefits or what’s changing. These shifts can often include deductible and maximum out-of-pocket or premium adjustments. They might also be offering brand-new benefits or getting rid of plans you’re currently enrolled in altogether.

This is the perfect place to start. Once you know what’s on the table, you can start to whittle down your options. If you’re planning your next year of benefits with your other half, they can do the same. That’s true even if they haven’t received their new benefits options. Since benefits don’t tend to change across the board between years, you can compare their guide from last year with your guide for next year.

When I do this type of planning for clients, I start by laying everything out in a spreadsheet. For each and every possible plan, what does a best-case scenario year look like? What about a worst-case scenario year? And does your employer provide any cost-sharing assistance or offer employer health savings account (HSA) contributions?

What Is a Low-Usage Health Care Year?

If you consider yourself to be rather healthy, you might be considering a lower-cost health care plan. This includes paying premiums and some light out-of-pocket costs for the care you plan to talk with your primary care provider about at your annual check-up. While basic preventative care is covered at no cost, your provider can charge for extras. I personally find it helpful to keep a list of any concerns that I plan to speak to my provider about throughout the year. This helps me avoid missing anything and helps me prepare for any bill I might receive. Don’t forget to consider your basic prescription costs!

What Is a High-Usage Health Care Year?

Got some care planned next year? Or maybe you have a chronic condition or some underlying health concerns. Whether it’s a major surgery you’ve been putting off, you’re planning to add to your family, you’ve got an expensive prescription, or you know you’ll be using more of your health insurance benefits for another reason, include these in your plan. This can help you prepare for a high-usage and high-cost healthcare year.

If you’re not sure what to plan for, lay out all of your options. What does a high-cost and low-cost year look like across all of your health plans? If one plan in particular has both the lowest premiums and the lowest maximum out-of-pocket costs for the year compared to the others, it could make for an easy decision.

As you review your options, don’t let the words “high-deductible health plan” fool you. In many of the benefits guides I’ve already reviewed this year, these “high-deductible” plans offer the lowest premiums and the lowest maximum out-of-pocket costs of available options. If you’re looking to dig deeper into the world of high-deductible health plans (HDHPs), the health savings accounts (HSAs) available with HDHPs, and whether to choose an HSA vs. FSA, or both, check out our blog dedicated to the topic: Benefits of Health Savings Accounts (HSAs): The Ultimate Tax-Efficient Savings Vehicle.

And last but not least, remember: If your employer’s plans are considered “affordable,” you very likely won’t qualify for any premium assistance on a health insurance marketplace. 

How Can You Evaluate Dental and Vision Insurance Options?

Reviewing health insurance options usually requires the most attention. Now that you’ve got the hard part out of the way, pat yourself on the back and move on to what’s next: Dental and vision. Some employers offer just one choice for each, and many are low-cost or even fully employer-paid. Before enrolling in either, consider your needs over the next year and see what your premiums alone would look like. Remember: Just because there’s only one option for each doesn’t mean you have to take them!

Many dental and optometry offices offer prepaid or as-needed care plans. If your employer doesn’t offer low-cost or $0 dental or vision premiums, you might want to dig a bit deeper. Check out your preferred providers’ websites or call their offices to see if their offerings might be lower-cost options compared to your available benefits. This can be a cost-saving path if you’re expecting a year of simple dental cleanings and an eye exam.

Are You Eligible for Any Employer-Paid Benefits?

Many employers provide some fully paid benefits. That means $0 premiums for you! I most often see these in the form of some basic life and accidental death and dismemberment (AD&D) coverage, short-term disability insurance, and long-term disability insurance. Even if you wouldn’t otherwise require life insurance or don’t need extra disability coverage as you’re nearing retirement, consider enrolling. 

Basic Life Insurance

Perhaps your employer-paid life insurance offering is a multiple of your salary, like one or two times what you make, or the standard $50,000 in basic coverage. If it’s more than $50,000, it might come with some imputed cost to you, but even this is generally very low. Just don’t forget to name a beneficiary or a charity of your choice!

Basic Disability Insurance

Disability insurance acts as income protection. If you were to suffer an injury or accident that would leave you unable to work for a short or longer period of time, these coverages can definitely come in handy. They can provide replacement income while you’re not working that can help cover regular expenses along with costs incurred during a period of recovery. 

While they usually only replace 50 or 60 percent of your income, short- and long-term disability coverages can help you protect your emergency and future opportunities fund (EFOF). Rather than dipping into it, they offer some income during downtime. Pay close attention to any options here. If the benefits are fully employer-paid, you’ll pay taxes on any amounts you receive. If you can elect to pay for these yourself as post-tax payroll deductions, any funds you receive from the plans during a disability are tax-free. So even if your employer would pay for them, it can make sense to elect to pay for them yourself. Not every employer offers a self-pay option, but keep an eye out for it just in case. The coverages are usually very low cost, anyway.

Which Voluntary Employee Benefits Are Worth the Premiums?

Some employers offer a long list of completely optional benefits. While a few are usually very worthwhile, some can come with premiums that aren’t listed in your benefits guide. If you don’t choose wisely, these can take a chunk out of each paycheck for coverages that you may never use. Just because a benefit is offered does not mean that you have to use it.

Voluntary Disability Insurance

Didn’t see any basic employer-paid short-term disability coverage in your benefits guide? Pay attention to this section. If you’re still building your EFOF, short-term disability insurance might be worth the premiums. Since it provides income during a shorter disability period, it can help you avoid going into debt if something happens that keeps you from earning income. Just keep in mind that short-term disability coverage only lasts for a short period of time, generally 90 to 180 days. So if you’ve got your EFOF in place, it might not be worth the premiums you’d pay. If you need it for a single benefit year, you may want to drop it at your next open enrollment, especially if you’ve built up your EFOF.

Even if you’re eligible for employer-paid long-term disability coverage, adding some extra can be important. That’s because your “free” coverage might only cover half or a little more than half of your income. And you’re probably used to relying on more of it than that! If you can purchase extra to bring that coverage up to 60 percent or more of your income, it can be a huge help. Plus, any coverage that you pay for after taxes means tax-free benefits for you in the event of a disability.

Since not having disability insurance would mean tapping into your EFOF in the event of a longer-lasting disability, I generally recommend purchasing voluntary long-term disability insurance. If you don’t see this as an employer-paid benefit in your guide, it could be well worth paying the premiums just in case you’d ever need to rely on it.

Voluntary Life Insurance

Even if your premiums are low, it’s a good idea to decide if you really need to pay for extra life insurance. If you aren’t financially responsible for another individual, chances are that you might not need voluntary life insurance.

However, if you have an insurable need, voluntary group life insurance can be a cost-effective way to obtain coverage. You can compare prices for individual life insurance outside of work for a quick and easy cost-benefit comparison. Remember that not every plan is portable, so you might not be able to take yours with you if you leave your employer. 

Other “Extra” Insurance Options

Adding to the list, I see lots of employers with other insurance offerings. These tend to include critical illness coverage, accident insurance, hospital indemnity insurance, legal plans, pet insurance, and the like. While use cases exist for each, be sure that any additional insurance you purchase through your employee benefits would fit you and your life.

Critical illness coverage and hospital indemnity insurance can come in handy if you’re prone to one of the listed illnesses or injuries, predisposed to one of the covered conditions, or if something specific runs in your family. However, these types of coverages only provide benefits for the listed conditions, and only in certain cases. They might not cover those resulting from preexisting conditions, and the benefits might not make the premiums worth paying. You may need to ask your human resources department for more information here. 

Accident insurance sounds like a strong option, but it’s not for everyone. If you participate in certain sports or activities that could result in a covered accident, it can be a good choice. Just be mindful of the benefits you’d receive if you suffered a listed injury resulting from an accident and how the premiums for coverage compare. If a covered accident isn’t likely based on your lifestyle, you might want to pass this coverage up.

Legal plans can be helpful if you need to create your estate planning documents. That said, I don’t often hear about legal coverage coming in handy otherwise. Take a look at what any legal plan in your benefits guide covers and consider how likely you’d be to use it.

Other extras, like pet insurance, can be low cost through your employee benefits. However, they can also run you about the same in premiums as coverage you could obtain elsewhere. A cost-benefit analysis and checking with outside providers can be a strong way to navigate whether to opt in or waive coverage.

What’s On Your Open Enrollment Checklist?

Now that you’ve reviewed the long version showing all of your options, make it simple! You can use the template below to make your open enrollment checklist. Simply create a note on your phone or email yourself your best options to make the process easy. 

• Health: 

• • • Health savings account (HSA) or flexible spending account (FSA) for healthcare contribution per pay period: 

• Dental: 

• Vision: 

• Employer-paid benefits available at no cost to you:
• Voluntary benefits in which to enroll: 
• Benefits to waive: 

As you go through your human resources or payroll open enrollment process, use your checklist as a guide. When you’ve completed enrollment, download a copy of your benefits statement for the next year. Cross-reference your checklist, comparing it to your benefit elections. It’s an easy way to see if you enrolled in the right options, didn’t waive any employer-paid benefits, and that you didn’t miss any necessary voluntary benefits. Be sure to keep an eye out for any per-pay-period or monthly costs that seem too high, as these will reduce your income on each paycheck. Worthwhile benefits should benefit you, after all!

Don’t want to fuss with everything above? Allow me! Employee benefit analysis and recommendations are included in your ongoing implementation support with FPFoCo. Start by securely uploading your benefits guide or emailing me your website, and add a note to let me know about your enrollment window and deadline. If you’re in a relationship and eligible for another set of benefits, be sure to pass your partner or spouse’s guide along, too. I’ll review all of your options and follow up with a checklist tailored to you, your benefits, and your life to make it all even easier.