Fall is here and you may be spending time designing your kids' Halloween costumes or hosting the annual family chili cook-off. But there’s typically another big family event on the horizon: annual enrollment.
Now is the time to make some important health and financial decisions for your family such as reviewing your health plan choices for next year and taking another look at how much you are currently saving for retirement.
If you're a full-time employee, you likely receive health and other insurance options as well as retirement benefits from your employer. According to the Bureau of Labor Statistics, benefits increase workers' overall compensation by 30% to 37% on average.1
Companies know they need to offer a range of valuable benefit programs in order to attract and keep the best employees. But they also want to make sure those employees are physically, emotionally, and financially healthy so they can be their best at work.
"Today many employers are now offering a wide variety of wellness programs," says Erin Tatar, senior vice president of benefits consulting at Fidelity Investments. "These benefits may include things like onsite health clinics and fitness centers, weight management support, stress and resilience programs, and help with budgeting and financial planning. There's likely a few new employee benefits this year that you may not have heard about, so it's important to use the resources from your employer to compare your options during annual enrollment season."
To support your health and retirement decision-making process, here are 6 tips to help you make the most of your employee benefits enrollment this year.
1. Build your health care budget
With the cost of health care and health insurance skyrocketing, it has become increasingly challenging for employers to maintain their benefits offerings. In 2017, employees paid some 43% of their total health care tab (employers paid the rest). For the average family, that figure includes health insurance premiums of over $7,600 and about $4,700 in a variety of out-of-pocket costs.2
Taking a look at your entire household's spending may help you get your arms around your health care budget. Knowing your facts can help you make better decisions during annual enrollment.
To start your budget, ask yourself these questions:
Tip: Find out if you can lower your monthly health insurance premiums. Many employers now offer savings such as reduction in premiums or contributions to Health Savings Accounts (HSAs) if you take certain steps to improve your wellness, such as completing an onsite health screening or online health assessment, participating in a tobacco cessation program, or taking advantage of workplace wellness activities.
2. Compare different plans
According to a recent Fidelity health plan survey, 44% of people say it's easier to stick with the current health plan year over year versus trying to decide if another choice is better.3
"We know that many people simply enroll in the same health plan, year after year," says Tatar. "We all fear uncertainty. But now is the time to think differently. Do your homework and take the time to fully understand all the benefit choices now available to you—or you may be leaving money on the table."
Your employer may have several different types of plans to choose from, and the features and prices can vary significantly. Compare the benefits, rules, restrictions, and costs such as copays, deductibles, and out-of-pocket maximums. Different plan types include:
There are lots of choices in health plans, and your choices can change from year to year. When choosing your plan, consider your personal situation—your finances, family health status, and proximity to frequently used medical services. Annual enrollment is the time to reassess which plan best meets your family's current needs.
Read Viewpoints on Fidelity.com: 3 healthy habits for health savings accounts
3. Consider new options at various stages of your life
Just like in the board game "The Game of Life®," your path will probably take some interesting and unexpected turns. As you move through various stages, take note of where you are and choose your plan for today. For example, it might be a good time to consider buying more dental, life or disability insurance. Take time to review your options and take advantage of additional health and wellness benefits.
"Remember, your employer had made a large investment to offer you a variety of benefits that support your physical and financial well-being, no matter your age," says Tatar. "They do this because they need to attract the right employees, and so you can better focus on your job and be productive at work."
Where are you on your life's path? Weigh all your health care options before you choose.
Single? Consider looking for a low-cost health care plan with a good network. If you are in good health, try using an HDHP with an HSA to get a head start saving for future health care expenses
Adding a spouse or partner? Take a fresh look at all choices. You may see a big jump in costs going from single health care coverage to a "plus 1." Coordinate access to your spouse's doctors and other health services that work for both of you.
Having your first baby? You'll need "family coverage." Make sure your pediatrician accepts the plan you're considering. Weigh an HDHP with an HSA against HMO or PPO options. If you anticipate having to pay a lot for day care next year, consider contributing to a Dependent Care Flexible Spending Account (FSA), if your employer makes it available.
Have young children? With frequent visits to the pediatrician and other family health care needs, choose the plan that your doctors take and that offers you flexibility at an affordable cost. Make the most of a dependent care FSA, if offered. For added protection for your family, ask your employer about supplemental life and disability insurance options.
Kids in college (and under age 26)? Do the math! Is it less expensive to keep older children on your family plan or to access a student health plan at their college?
Newly divorced? If you are now on your own due to divorce or death of your spouse or partner, you'll want to look at the best options for you to enroll in single coverage. You may find an HDHP with an HSA an effective way to pay for health care plus save for future health care expenses.
About to retire? Talk to your employer about any health plans for Medicare-age workers or retirees. There may be options for you to consider.
4. Find creative ways to save
The ways that people seek and purchase health care services continues to evolve. Today, there’s more choice, more convenience, and more ways to save money.
Consider these options:
Use employer tools to help choose the best plan option for you and your family based on your needs. Owning your health and wellness decisions can indeed be complicated. The good news is that your employer may provide tools and resources to help make the selection process easier. Among them:
5. Make decisions before the deadline
This fall your employer will give you some time to review your current benefits, compare any new options and benefits, and figure out how much they'll cost you next year. These few weeks are often referred to as annual enrollment since it's the one time during the year you can make changes to your benefits (unless you experience a qualifying life event such as having a child, divorce, or death of a spouse).
It's critical that you don't miss your annual enrollment deadline and that you familiarize yourself with all benefits open to you and look for ways to save money. Tatar adds, "Don’t forget to explore options that go beyond traditional employee benefits. There's a lot to consider from joining a company fitness center and adding pet insurance to enrolling your child in onsite day care or opting for special critical illness coverage."
6. Review your retirement savings too
Annual enrollment is generally focused on selecting the best health plan for you and your family. But while you're making important decisions about your health, take a few extra minutes to give your retirement savings plan an annual checkup too.
- Are you saving enough to meet your income needs in retirement?
- Can you increase your contributions by 1% in 2019?
- Can you save enough to get the full match from your employer?
- Are your beneficiary designations up to date?
- Has your employer added new benefits such as financial counseling or student loan repayment programs?
It's important to remember that your health decisions and retirement savings plans are closely related. If you can find savings in your health dollars, you may be able to direct a little more to retirement. Read Viewpoints on Fidelity.com: Retirement rules of the road.
Next steps to consider
See if you're on track in the Planning & Guidance Center.
Find out if your finances are on track by answering these questions.
Learn ways to cut your prescription drug costs.