The following are tips for employees as they begin the process of benefits enrollment.
- Know the tools available to you.
Many organizations are expanding the array of enrollment tools available to employees. Along with the traditional print summaries (often mailed to employees at home), many employees also have access to automated telephone enrollment lines and online enrollment. These can be convenient services for those who are comfortable completing their enrollment online or over the phone. To find out what tools are available to you and how to use them, contact your human resource manager.
- Be a smart shopper.
If you were buying a car or purchasing a home, most likely you would do a lot of research beforehand. And you should do the same for benefits because the wrong decision could be costly. Ask yourself the following questions: Are you choosing the right medical coverage for you and your family? What about wealth protection (disability, life insurance and long term care)? Today, a multitude of resources are available to help you with your decisions including the Internet, hotlines, benefit fairs, printed material from your employer and customer service centers.
- Re-think your health plan choices.
The annual enrollment period provides an ideal opportunity for you to re-evaluate your medical plan. Are you satisfied with your current medical plan? Are you comfortable with your current PCP? If not, now is the time to consider making a change. And what about your dental and vision plans? Be sure to assess that coverage as well.
- Contribute as much as possible to your 401(k) plan.
Your 401(k) plan could very well be your main source of retirement income down the road, and the earlier you start contributing, the better off
you'll be in the long run. Start now! Many companies make matching contributions to their
employees 401(k) plans. In order for you to reap the benefits of this "free money," figure out how much you need to contribute to get the maximum employer contribution.
- Take advantage of your health care spending account.
Consider setting up a health care spending account, even if your tax savings won't be large. A spending account helps employees pay, in a tax-effective way, for predictable health expenses not covered by their medical plan. Electing to contribute a portion of your before-tax income to a spending account can stretch money available for medical services and lower your taxable income at the same time.
- Take advantage of your dependent care spending account, if appropriate.
Some employers offer dependent care spending accounts, which help employees pay for child care and other dependent expenses in a tax-effective way. Employees make a before-tax contribution to their dependent care account directly out of their paycheck. You may wish to contact a tax advisor to determine if a dependent care spending account is the best choice for you.
- Assess your life insurance and disability protection needs.
Most employers automatically provide life insurance benefits for their employees. However, the enrollment period is a good time to assess whether your circumstances call for additional life insurance, either through your
employer's plan or another carrier. Questions to consider include: What is your family situation? Would your personal savings provide adequate protection for your family if you die? One thing to remember is that most people are more likely to be disabled at a young age than die. If you were disabled and
couldn't work, think about how you would meet your expenses. Long-term disability protection can help you with your expenses after six months of disability.
- Consider long-term care coverage, even if you're young.
Long-term care coverage is intended to provide services and care, as opposed to income replacement, in the event of a serious injury or illness. Since most people are more likely to be disabled at a young age than die, this coverage is worth considering, even if
- Don't miss the deadline!
When you receive your enrollment packet for next year, pay attention to the deadline for submitting your enrollment choices. If you fail to enroll on time, you automatically will be assigned coverage that you may not
want and you wont be able to take advantage of a health care spending account or a dependent care spending account. Plus, if you wait until the last minute to enroll, you
wont be able to do your homework to get the most out of your benefits.
- Keep a record of your enrollment and follow up.
Make sure you keep a copy of your enrollment forms in your personal files. There may be questions that arise during the year regarding your coverage and you will be glad that you have your enrollment records to refer to. If you
haven't received an ID card or other confirmation by late January, follow up with your
plans member services department to ensure that you and any family members are enrolled.
millions of people across the country prepare to make enrollment decisions for their health care and retirement coverage, many are finding they have more benefit choices than ever before. While enrollment season can sometimes be a confusing and overwhelming time, there are common-sense guidelines that can assist employees in their decision making process.
"The best New Year's gift employees can give themselves is to shop for their benefits
carefully using the same type of decision-making process they use for other major purchases," said Wendy Rhodes, consultant, Hewitt Associates. "By making the effort to use the tools available to them, employees will be better able to get the most out of their benefit plans and understand their many benefit options."
Hewitt Associates, a global management consulting firm specializing in human resource solutions, will handle benefits enrollment for more than 2.5 million employees this year.