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Don’t Automatically Re-enroll: How to Make the Most of Open Enrollment

Oct 29, 2021 4 min read Ben Gran

Key takeaways

  • Annual enrollment is a chance to re-evaluate your health insurance and other employee benefits.
  • Don’t assume you have to re-enroll in your current health plan. Examine all your options.
  • Use this occasion to check on your retirement savings and get the most out of your other benefits.

 

Annual open enrollment is your opportunity to make changes to your current health insurance plan and other workplace benefits. But don’t assume you have to re-enroll in your current plan. Depending on your employer and your household’s overall situation, you might want to make changes to your benefits that could increase your take-home pay or strengthen your financial protections in other ways.

Here are five reasons to research your options and consider changing your benefits during open enrollment.

 

 

  1. 1. Your available benefits might have changed

    If you get health insurance through your employer, see what options are available to you for next year, as well as how the benefits you currently have may have changed. Don’t assume you should stay with your current plan; you might have new options that make better financial sense for you. If your employer is offering a new range of plans, think about what your overall out-of-pocket expenses might be with each plan.

    Work with your organization’s HR team to get details about any updates to your benefits, attend enrollment information sessions, ask questions and read the fine print on any new policies or programs. And when considering a new health plan, don’t rely solely on their website or enrollment materials to learn if health providers or facilities you want are (or aren’t) in their network; instead, always double-check with the providers themselves.

    If you’re generally in good health and have a low-risk lifestyle (nonsmoker, no chronic illnesses or health risk factors)—and you have a decent emergency savings fund—you might be better off choosing a high-deductible health plan (HDHP) that charges you lower premiums, if it’s available. This could increase your take-home pay and even give you access to a tax-advantaged health savings account (HSA) Opens in new window.

     

  2. 2. Your spouse’s benefits may have changed

    If your spouse or partner has been insured through your workplace coverage but recently started a new job—or even saw changes to their current benefits at work—they might be able to get a better health plan through their employer. Get the details on both of your options. See if you can lower your premiums or total out-of-pocket costs by switching to your partner’s plan—find out if there’s a surcharge for being on a partner’s plan when you have your own available coverage, and vice-versa—or by opting for each of you to get coverage through your own employer.

    Before switching to a new health plan, check the insurer’s website to make sure your favorite doctors and facilities are included in the plan’s provider network—but because that material isn’t always up to date, also check with the providers themselves.

    The plan with the lowest premium isn’t always the best plan for your needs. Make sure you’re able to accept the potentially higher out-of-pocket costs that go with choosing a lower-premium/higher-deductible plan.

  3.  

  4. 3. You may need a different type of health plan

    Have you had any big changes in your life during the past year? Your current health plan might not be the right fit anymore. For example, if you’ve had a child, or someone in your family has experienced a significant health diagnosis, you might want to choose a plan with lower deductibles, less coinsurance, lower copays or more comprehensive benefits.

     

  5. 4. There may be benefits you don’t know about

    Along with re-enrolling in health insurance, you might want to sign up for additional benefits you weren’t participating in before. Many employers offer supplemental “group voluntary” benefits that you might have to sign up for separately. These might include group supplemental life insurance, vision insurance, group accident and critical illness insurance, discounted gym memberships, public transportation discounts or other employee fringe benefits.

    If you worked from home during the pandemic but have returned (or will soon) to the office, see if you can snag pretax commuter benefits to pay for parking or public transportation. If you’re caring for a child or older adult loved one, look for resources for caregivers. Want to go back to school? Your employer may offer tuition reimbursement or other education benefits.

    Health insurance is top of mind during open enrollment, but be sure you’re getting the most out of your overall benefits package.

     

  6. 5. Re-evaluate your retirement savings

    If you’re in a “defined contribution” retirement plan (like a 401(k)) at work, you typically can change your contributions any time. But open enrollment is a good time to review your saving and investing strategy.

    • If your organization matches contributions, make sure you’re saving at least enough to earn every penny. Don’t leave “free” money on the table.
    • Save more as you earn more. If you recently received a promotion or raise, now might be a good time to bump up your retirement savings account contributions. Or, if you’re already maxing out Opens in new window your 401(k), consider contributing more retirement savings to a Roth IRA1 or traditional IRA, if you qualify.
    • Reevaluate your investment strategy. Are you allocating the right portions of your account to the kinds of investments that make the most sense for your time horizon (when you plan to retire), comfort with risk, and the retirement lifestyle you aim to fund? A variety of free online calculators can help you determine how much income you’ll need for a comfortable retirement, and a trusted financial professional can assist with your investment mix.

     

What you can do next

When open enrollment starts, get information from HR and read the fine print on any new options for health insurance or other benefits. Don’t assume you must re-enroll in your current health plan; you can make changes depending on your overall financial needs and your current situation. Also consider boosting your retirement savings and supplementing your benefits with other insurance coverage and employee perks.

Footnotes

1. Beth Braverman, “What Is a Roth IRA, and How Does It Work?,” Prudential, Nov. 7, 2020 (prudential.com/financial-education/what-is-a-roth-ira)

 

Ben Gran is a freelance writer based in Des Moines, Iowa. He writes about personal finance, public policy, financial services, technology and business.

 

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