A Guide to Choosing Your Company Benefits During Open Enrollment Season

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Already excited about pumpkin-spice everything and the end-of-the-year holidays?

It’s that time of year again — and yes, that does mean crisp fall weather and seasonal festivities. But it also means it’s the season for open enrollment, which usually starts in November.

Now is the time to make changes, additions, or updates to some important benefits that could impact your finances. And even if you think you’re all set right now, it’s worth doing a quick review to ensure you’re not missing opportunities or skipping chances to save.

Here’s what you need to know about open enrollment, and how to make the most of it. Tis the season!

What Is Open Enrollment?  

If your employer offers employee benefits, open enrollment is the time when you can elect or change some or all of the perks your employer provides. This includes benefits like:

Open enrollment provides you with a period of time where you can update or change these benefits. This is a great opportunity, because as we know, life changes and it changes fast and frequently.

But many employees really don’t like this time of year or the chance to optimize their benefits. That’s because most of us think it’s something to deal with rather than something to take advantage of.

A 2016 study by the Society for Human Resource Management found that 41 percent of employees describe the open enrollment process as “extremely confusing.” And 49 percent of workers called making decisions about their health insurance “very stressful.”

Sound familiar? Let’s walk through this together, step by step, so you can get through your next open enrollment season — without suffering a breakdown.

1. Expect the Changes You Need to Make

The easiest thing to do come open enrollment season is to simply keep things how they are, but don’t stick with the status quo just because making changes is confusing.

For one, the options you originally chose may no longer be the best fit if you had a major life change. And two, companies often make changes to their benefits every year or two.

HR might have found a better health insurance plan or perhaps your company chose to improve its 401(k) plan or provide a higher match.

Either way, it’s worth reviewing to make sure you don’t miss out on more or better perks that what you enjoy now.

HR should provide information on new or updated benefits for you, either by email or in a company-wide meeting. If that still feels like a fire hose of information, don’t hesitate to reach out and ask for one-on-one guidance (or ask your financial planner to walk through options with you).

2. Evaluate Your Current Needs

What happens if you rarely go to the doctor and don’t have any major health issues? You could save some money if you can review your health insurance and “downgrade” to a plan that offers less coverage but also costs less out of pocket.

Or perhaps you plan to have baby in the coming year. Now is the time to consider the benefits you’ll want to use once your family grows.

Money you put into an FSA or HSA now could help for the delivery costs — and those funds can be used tax-free.

These are just examples and may not apply to you. So take a moment to think about the coming year. Then, consider all the benefits your employer offers and plan the best way to use them to your advantage.

That will help you make informed decisions around open enrollment, and can make things feel less overwhelming since you’ll have a better understanding of what you actually need.

3. Brush Up on Common Terms and Phrases in Benefits Packages

Employee benefits, especially insurance, come with a lot of jargon. That only adds to the sense of confusion and overwhelm when it comes to making decisions about your benefits during open enrollment.

Just like knowing what your needs are can help provide more clarity, understanding some basic terminology can help you better navigate specific benefits.

Let’s look at some common terms to know when you evaluate and choose a health insurance plan:

  • Copay: This is what you pay every time you visit the doctor. There can be different copays for different types of doctors (specialists, for example, may come with higher copays).
  • Deductible: This is what you pay before your insurance starts contributing. Typically, copays don’t count toward your deductible. Also, there may be individual deductibles for each person on the plan, and a family deductible for everyone together. Once you’ve reached the deductible, it doesn’t reset until the following year.
  • Coinsurance: Coinsurance is the percentage of the bill you’re responsible for at that point. A common coinsurance figure is 80/20, meaning you pay 20 percent of the bill, and the insurance company pays 80 percent.
  • Out-of-pocket maximum: This number is the most the insurance company will require you to pay for your health care for the year. Once you reach this number, the insurer pays 100 percent of your medical bills.

Other benefits can have similarly perplexing terminology, so take the time to make sure you understand what you’re getting yourself into before committing. That means if you have a question, again, ask HR or talk through what you don’t understand with your financial planner before making a decision.

4. Don’t Know the Answer? Know Where to Get It When Choosing Company Benefits

On that note, you also have other resources beyond HR and your advisor that you can check out for help during open enrollment.

These are some helpful and topic-specific guides to dive into on benefits that often need to be updated or changed during open enrollment:

The more prepared you are as open enrollment season begins, the easier it will be to get the elections that you need. Remember, this is an opportunity!

It’s a chance to make the most of the next year because you know you’re taking advantage of the best combination of benefits available to you.

See important disclosure information.

Mary Beth Storjohann, CFP® is an author, speaker, and financial coach who takes a fun, no-nonsense approach in working with individuals and couples across the country, helping them make smart choices with their money.

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