The end of the year gives you a chance to adjust contributions and coverage for a range of benefits, including insurance coverage, voluntary benefits, and savings accounts. It’s also a good time of year to check in on your retirement contributions.
Autumn brings a slew of holidays—and open enrollment season for workplace benefits and coverage. Are you wondering, “What benefits should I enroll in?” Here’s what you need to know this year.
The basics of open enrollment.
Think of open enrollment as an opportunity to make decisions that affect your overall financial picture.
When you can make changes: Generally once a year, unless you have a major life event such as having a baby, getting married, or losing a spouse’s health coverage.
Changes required: None unless you need or want to. “Think of open enrollment as an opportunity to make decisions that affect your overall financial picture, rather than a checklist of action items,” says Stanley Poorman, a financial professional with 51ԹϺ®.
Review these benefits during open enrollment.
Open enrollment offers you a chance to change (or keep) health, dental, and vision plans along with life insurance policies and voluntary benefits, and contribute to a health savings account or a flexible savings account.
Health insurance plans
“Benefit enrollment is a great time to do a side-by-side comparison and think long-term. Ask yourself two questions: What is the right amount of coverage to protect my loved ones? and What is the best way for me to get that coverage?” Poorman says.
An out of pocket (OOP) cost comparison should include premiums, co-pays and deductibles, OOP max, and prescriptions coverage.
A comparison between your plan and a spouse's plan should consider OOP costs, your family’s health and financial situation, and coverage for children (if you have or plan to have).
Tip: Use this time to double-check beneficiaries on accounts and policies, including retirement and life insurance.
Dental and vision insurance
Use open enrollment to plan for likely health costs. Maybe the kids need braces, or you’re squinting harder than usual as you read this?
Health savings accounts (HSAs)
Why people use an HSA:
- You can save for OOP medical expenses, particularly if your insurance is a high-deductible health plan (HDHP).
- You can roll over unused funds each year.
- You can carry forward funds for health costs—which could be helpful in retirement.
- The plans are triple tax-advantaged. (You contribute on a pre-tax basis, earnings can grow tax-free, and withdrawals are tax-free if used for qualified medical expenses.)
- You decide how much money to contribute.
Learn more about HSAs and ways to save for the cost of health care.
| 2024 HSA contribution limits: |
|
|---|---|
| Self-only | $4,150 |
| Family | $8,300 |
| Age 55 or older | Catch-up contribution: $1,000 |
| Employer HSA contribution | Not treated as taxable income, but it counts toward your annual contribution limit. |
There are lots of rules around HSAs, so visit the to learn more.
Flexible spending accounts (FSA)
Why people use an FSA:
- You can contribute some of your pay on a pre-tax basis to an account for reimbursement of qualified health care and dependent care expenses.
- Because they’re pre-tax, FSA contributions lower your taxable income.
- may include elder care in some instances.
How an FSA differs from an HSA:
In an FSA, what you don’t use in the coming calendar year, you lose.
| FSA contribution limits: | |
|---|---|
| Current existing limits | For 2024, a $3,050 limit per year for health care, and a dependent care limit of $5,000 per year |
| Employer limits | May be lower |
Life insurance
During open enrollment, there are a few things to consider about life insurance. First, you may be able to buy more coverage through your employer (called “voluntary” life insurance), with the premiums deducted from your paycheck.
If you lose or change jobs, you often lose employer-provided life insurance, but you can retain voluntary coverage and pay the premiums directly to the insurer.
One more reason to consider it? The younger you are, the cheaper life insurance is (generally).
Voluntary benefits
Voluntary benefits are typically a suite of benefits that you may choose to add. Your participation is optional but the voluntary benefit coverage may provide high value for your wants and needs.
These benefits often fit into four practical, impactful categories: health and wellness; financial wellness; personal benefits; and security. For example, a voluntary benefit like hospital indemnity may cover out-of-pocket expenses for a medical stay. Or, you may see caregiving support or flexible monthly stipends offered at your workplace.
For information about what voluntary benefits may be available to you, reach out to your employer's human resources.
More open enrollment benefit options to review
Your workplace may also offer more benefits that you can update during open enrollment.
Disability income insurance
“Buying more coverage outside the workplace means you’ll have disability insurance even if you change jobs, and you can increase your coverage as your income grows,” Poorman says. Here’s what to consider:
- Do you have disability coverage through work?
- Is it short- or long-term, or a combination of both?
- If so, would the coverage replace all or most of your income if you’re unable to work due to injury or illness? (Most cover about 60% of pre-tax income, which equals about 40–50% of your income.)
- If you become disabled while out of work, how would you cover your expenses?
If you’re wondering if you have enough coverage, our disability income calculator helps you do the math.
Retirement plan savings
Use these key questions to make sure you’re on track with your retirement savings.
- Are you contributing enough to get an employer match?
- Does your asset allocation still reflect your risk tolerance?
- Do you need to increase your contributions to catch up and stay in line with your retirement goals? The IRA contribution limit for 2024 is $7,000 per year, with an additional $1,000 for those age 50 and over.
Tip: If you participate in a retirement plan with services from 51ԹϺ, have one of our IRAs, or have life insurance through your employer, you and/or your spouse have access to free online resources to prepare your own standard will, power of attorney, power of attorney for health care, living will, and more. To get started, .
Additional benefits and Employee Assistance Programs (EAP)
Your workplace may offer a variety of options including childcare assistance, education assistance, or mental health benefits, sometimes called employee assistance programs (EAP). An EAP is a voluntary program that offers free and confidential assessments, short-term counseling, and referrals for work or personal problems. It may also be available to other members of your household, depending on your plan.
For more details, check your employer’s intranet site, connect with human resources, or talk to the benefits administration department.
What's next?
After reviewing your benefits during open enrollment, do you wonder if you’re saving enough to reach your retirement goals? to find out. If you don’t have an employer-sponsored retirement account and want to save more, we can help you set up your retirement savings with an individual retirement account (IRA).
