Public Health

This is how you maximize your advantages with open enrollment

The open enrollment season is running.

With millions of employees re-evaluating their job or considering moving, employer-funded benefits through 2022 are an even bigger consideration.

Approximately 157 million Americans rely on employer-funded health insurance, and yet, prior to the Covid-19 pandemic, many people spent very little time reviewing their company health plan during the open enrollment period.

Now, amid the ongoing public health crisis, more and more people are feeling the financial and psychological toll after working from home for over a year. And they take a closer look at what support their employer offers.

As a rule, open enrollment runs until the beginning of December. Here are a few things to look out for beforehand:

1. Health insurance

First, think about what your health insurance will cost you now as premiums and deductibles change.

Annual family premiums for employer-funded health insurance – the amount it costs each year for insurance, often split into 12 monthly installments – will be about 3% lower in 2022 after taking into account the subsidies enacted under the American Rescue Plan Act Kaiser Family Foundation.

However, more employees have a deductible – the amount you pay before the insurance takes effect – and that deductible increases. In 2020, the average deductible alone was $ 1,945, roughly double what it was a decade ago.

“When you buy a plan, the obvious is the premium, but what people really need to focus on is the out-of-pocket amount,” said Lisa Lough, president of individual and family plans at Cigna.

“Think about how you are going to consume health care,” she said. “If you are only receiving medical treatment or have chronic illnesses, not only look at the price on the premium, but also look at your deductible before your health insurance covers it.”

2. Health savings accounts

One way to help with health care costs is to use tax-privileged medical expense accounts – especially health savings accounts or flexible expense accounts.

Either way, use the pre-tax money to cover expenses, including doctor visits and prescription drugs.

To use an HSA, you must be enrolled in something called a high deductible health plan (HDHP). The contributions then grow tax-free, and the money that you do not use can be distributed from year to year.

For 2022, employees and employers can contribute up to a total of $ 3,650 for individual coverage and up to $ 7,300 for family coverage.

Check to see if your employer offers a flat-rate contribution or fund and try to maximize those contributions for the year, said Dan Keady, TIAA’s chief financial planning strategist.

“Almost anyone can go out there and find some savings or missed benefits.”

Additionally, HSA savers who have the funds should invest at least some of their money to keep pace with or overcome healthcare inflation, Keady said.

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Health FSAs have lower contribution limits – $ 2,750 for 2021, but you also don’t need to have a high deductible plan to be eligible – in fact, you don’t need health insurance at all to sign up for one.

There are also FSAs for dependent care, which allow employees to pay for eligible childcare costs from pre-tax funds.

The American rescue plan The FSA limits for dependent care increased from $ 5,000 to $ 10,500 in 2021. While companies may not need to adopt the new FSA limits, employees should proactively ask about them in order to maximize the childcare support available.

In general, you have to use the money by the end of the year or you lose it, although laws passed late last year could also allow you to carry over unused funds from 2021 to 2022 to use anytime during the next year if your business has done this logged.

3. Life insurance

Nearly 45% of US workers don’t have life insurance or don’t know if they have life insurance, according to a survey by employee benefit provider Unum.

But Americans are now much more interested in this policy because of the Covid pandemic.

Even if you have professional life insurance, it can only be a fraction of what you need to protect young children or other dependents.

Life insurance policies issued by the employer usually amount to an annual salary, often less.

Think about what the right amount is for you and your family, and then weigh up whether you want to take out supplementary insurance or supplementary insurance through your workplace group plan, or if you want to take out individual term life insurance, which many advisors recommend.

4. Disability insurance

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Disability insurance is often the most overlooked benefit for employees. These plans can help replace part of your paycheck if you get sick or injured and cannot work.

There are basically two types: Short-term disability usually replaces 60 to 70% of your basic salary and the premiums are often paid by your employer. Long-term disability, which usually occurs after three to six months, typically replaces 40 to 60% of your income.

More than 55% of adults do not secure their income with an occupational disability insurance, stated Unum. Seven out of ten baby boomers also forego this type of protection, although they tend to need it.

If your employer has something to offer, consider it, Keady said.

5. Wellness resources

Before the coronavirus crisis, Americans rarely turned to their company for help managing work-life stressors and personal problems.

But whether it’s a response to the pandemic or the looming loss of employees during the Great Resignation, there are a multitude of financial wellness benefits that are now being offered by companies.

This year, 46% of employers in Bank of America’s Workplace Benefits Report said they offer the programs, compared with 40% in 2020. The financial firm surveyed a national sample of 1,363 full-time employees.

Some of the wellness initiatives available this year include financial coaching, stress management classes, web-based resources for healthy living, and even discounts on fitness equipment.

There could also be study grants, student loan repayment programs, supportive childcare, tutoring for older children, and scholarships for enrichment programs and camps that can go a long way in improving wellbeing.

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