As we round into fall (believe it or not) some minds automatically go to preparing for the holidays. However, another important time period to consider is open enrollment for employee benefits. Many companies host open enrollment in the fall months.
Here are a few tips to ensure that you are maximizing the benefits your company is providing.
Review all employee benefits you are offered. This includes any in which you are currently participating and available benefits you may not have participated in previously. A list of these benefits should be provided to you in an employee handbook. Seek consultation with your human resources director if you have further questions on the benefits available to you.
Understand which benefits are fully paid by the employer versus benefits paid for by you as the employee. There also may be benefits in which the employer and employee share the expense.
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Attend seminars provided by various benefit administrators during open enrollment if your schedule permits. Often, your company will host the administrators or organizations which provide these benefits during open enrollment. The seminars provide helpful insight.
Retirement Plans are what many associate with employee benefits. The most important aspect of a retirement plan is ensuring you receive the company match through your employee contributions. For example, if your employer provides a 50 percent match of employee contributions up to 6 percent of salary, it’s important to ensure you’re contributing 6 percent to receive the entire employer match.
Insurance is a great example of an employee benefit. Typically, there are multiple types of insurance available through your employer. The first that often comes to mind is health insurance. In the current environment, it’s crucial that you review any options for health insurance on an annual basis. These health insurance plans are changing year to year and it’s important that you review coverage to ensure it provides the benefit necessary for your health.
In addition, life insurance is also often offered through employee benefits. There are several advantages to securing life insurance through your employer. The most common are more forgiving underwriting and cheaper premiums because the insurance companies can pool employees together.
Other insurance policies such as dental insurance, vision insurance, disability insurance, long-term care insurance and supplemental insurance policies (such as cancer or critical illness policies) may also be available. These are all benefits that should be evaluated according to your personal situation. Again, it’s also important to consider the benefits that may be paid for by the employer.
In addition to reviewing your health insurance options, it is also important to inquire about additional benefits such as a Flexible Spending Account (FSA) or Health Savings Account (HSA). These accounts allow an employee to defer compensation for medical expenses pre-tax.
FSAs are typically available with any type of health insurance plan, while HSAs are specifically designed to accompany high deductible health plans. Be sure to review the maximum contribution limits to these accounts, which usually adjust on an annual basis. Some employers also offer a dependent-care FSA, which allows parents to save funds for child care expenses pre-tax.
Education assistance is a newer employee benefit that is growing in popularity. It’s important to inquire about any benefits the company may provide for furthering your education or attending industry conferences.
Open enrollment also serves as a great reminder to review other financial tasks that may slip through the cracks, such as verifying that beneficiary designations on any retirement accounts and life insurance policies are up to date.
Lastly, review your tax withholding on your employment income to ensure current and future tax optimization.
Kristen Buchman is a CERTIFIED FINANCIAL PLANNER professional and a member of the Financial Planning Association of Greater Kansas City. At The Trust Company, an independent wealth management firm with five offices in Kansas, Missouri and Texas, she is passionate about helping clients attain their financial goals.