It’s open enrollment season—the time of year when many employees have the option to enroll in employer-sponsored benefits programs.
Employers send stacks of enrollment forms to employees. Benefits consultants come to explain options. And water cooler chat turns to discussions of benefits that were cheaper “back in the day.”
Making a choice can be mind-numbing given all the competing options available. Don’t let procrastination take over. Certainly don’t become paralyzed with choice-confusion and miss out on the fun. Follow these tips to make benefits enrollment easier:
Attend a meeting. It’s the last thing you want to add to your already-packed agenda. Nonetheless, if you’re given the option to attend a benefits meeting, take it. This is a great opportunity to pick up comparison information, view projections for take-home pay, and ask the questions most important to you and your family. Your co-workers will have questions too, so you can learn a lot during the Q&A sessions at the end of benefits meetings. Plus, you’ll learn about enrollment deadlines, and you may receive worksheets to help with your decision-making process.
Meet with the benefits consultant one-on-one. If your company offers this option, take advantage of it. Your situation is unique. You can discuss your medical and financial needs, your spouse or partner’s benefits options, your personal expectations for the year, and other information unique to your situation. A benefits specialist can help you wade through the possibilities and decide which benefits could help you most.
Mark calendars with deadlines. Gone are the days when companies held employees’ hands and guided them, step-by-step, through the benefits enrollment process. Today you’re presented with your options, you get the forms and/or online enrollment information, and they give you a date by which you have to get it all done. If you don’t follow through, you’re out of luck. So when you receive your enrollment paperwork, mark your calendar with your enrollment deadline. Or even better, set aside time on your calendar to review all the information and talk to any family member(s) your decisions could affect.
Update all benefits. Not every benefit requires re-enrollment each year. A retirement plan contribution, like a 401(k), is a perennial benefit. However, enrollment season is still a great time to review your retirement plan to be sure you’re taking advantage of all it offers. Check on any new fund options, new planning resources, or changes to company contributions. Use this time to increase your contribution to your retirement plan account and reallocate your investments if you haven’t already done so this year. If you’re not currently enrolled in an auto-increase program for your retirement plan contribution, this is a good time to change that. Some plans allow you to sign up for an automatic increase in your contribution percentage once every year or two, which is a great way to stay on top of your retirement savings goals.
Don’t forget about Medicare. If you’re in retirement and participating in Medicare benefits, open enrollment for Medicare runs from October 15, 2011 through December 7, 2011. If you’re currently enrolled in a plan, you can switch to a new one during this time. And in some cases, this is the time to enroll in a plan for the first time. This Medicare open enrollment period is different from the initial enrollment period for people turning 65. Individuals at age 65 have seven months for enrollment in Part B—the coverage for doctor and outpatient services. The initial seven-month enrollment period includes the three months prior to the individual’s birth month, the actual month of birth, and the three months following the birth month. There are exceptions to the initial enrollment period timelines, but it’s important to note that there are penalties if you don’t sign up for Part B within the given timeframe.
The water cooler chat is correct: The cost of benefits continues to go up. Despite cost increases—or perhaps because of them—it’s very important to understand everything your company is offering. You have many decisions to make, so don’t be afraid to ask questions. You’ll have even more information to dissect if you’re comparing your company’s options with those of your spouse or partner. Take time to review all the options and make smart decisions for you and your family.
Scott Holsopple is the president and CEO of Smart401k, offering easy-to-use, cost-effective 401(k) advice and solutions for the everyday investor. His advice has been featured on various news outlets, including FOX Business, USA Today and The Wall Street Journal. Keep tabs on Scott on Twitter and Facebook.