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Actions Why You Shouldn’t Automatically Reenroll for Benefits
Key takeaways
- Benefit offerings are often updated each year.
- Changes in health or family status may require different insurance coverage.
- Lesser-known benefits can still add up to big savings.
Enrolling in employee benefits is no one's favorite activity, but it could be one of the most important financial tasks you'll do all year. Benefits comprise nearly a third Opens in new window of all compensation paid by most employers, so ignoring open enrollment could be a costly mistake.
Here are five reasons to rethink reenrolling in the same benefits automatically:
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1. The benefits offered by your employer have likely changed.
Companies are continually updating their benefit offerings. Even if you made the appropriate selections last year, there may be new options this year that could be valuable to you. There also may be new online tools that can show you which plans and benefits are the best fit for your situation.
Even if you won't be switching plans, you'll want to pay attention to whether the costs associated with your program have increased, and adjust your budget accordingly.
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2. Your spouse's benefits may have changed.
If you're married, you may be able to select a health insurance plan that covers both you and your spouse or your entire family. If your spouse has access to benefits, you'll want to evaluate the options offered by both employers to see whose company offers the best plan at the best price. You may choose to go with one plan, or a combination of the two, to cover your family's health care, dental and vision insurance needs. Note that if both you and your spouse can get health insurance through your employers, you may have to pay a premium to be on your spouse's plan (or vice versa) instead of yours.
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3. You may need a different type of health insurance plan in the coming year.
If you've been diagnosed with a chronic disease in the past year or had another significant change to your health status, you should take a closer look at your health insurance options during open enrollment. You'll want to evaluate the total potential out-of-pocket costs with each plan and whether your preferred doctors and medications are covered.
Even if your health status hasn't changed, if you've had a major life event such as getting married or having a baby (or are planning to do so this year), you should also reevaluate your health insurance.
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4. You may want to reevaluate your retirement savings.
If you automatically save a percentage of your paycheck for retirement, the amount you contribute rises with each raise—but you may be able to save even more. If you've recently gotten a raise at work or are expecting one, you might be able to increase your 401(k) or other retirement plan contribution without feeling a significant effect on your budget.
Open enrollment is also a good time to look at where you're investing that money. If your asset allocation—the portions of your portfolio you hold in different investments—is out of whack, it may be time to rebalance. You should also double-check the beneficiaries you've named on your accounts to make sure they're up to date.
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5. There may be benefits you don't even know about.
While health insurance and retirement accounts are among the most important benefits offered by companies, there are also a host of lower-profile benefits that may be quite valuable. These can include everything from free legal services or financial advice to discounted shopping services or pet insurance. Going through these options once per year can ensure that you're taking advantage of every benefit that your company offers.
What you can do next
Check what insurance plans you can get through your and your spouse's employer. When your company sends out information about its open enrollment period, set aside some time to go through it carefully to make sure you're making the most of all your benefits.
Footnotes
Beth Braverman is a freelance writer covering personal finance, parenting, and careers. Her work has appeared in dozens of publications, including Consumer Reports, CNBC.com, and CNNMoney.com. She lives with her family in Westchester County, N.Y.
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