It’s the time of year that our friendly neighborhood Human Resources Department is asking us to read dozens of booklets, study a smattering of email, and attend a handful of webcasts. Yes, friends, it’s Open Enrollment!
Once you are done cheering, please continue reading; I know this is exciting.
In reality, and if it makes you feel better, it’s all done for a very good reason and it’s a critical assignment that deserves your attention. Medical rates and costs are and will forever be going up. Since medical bills are the leading cause of bankruptcy for regular folks, you don’t want to skimp. In fact, if you make the right moves during your open enrollment period, you could do yourself a lot of good – and save yourself some money in the long run.
Here are a handful of tips that you should consider. As always, please remember, everyone has different needs so adjust, ignore or implement these based on your personal situation.
- First, don’t gamble by opting-out altogether. You may like the extra hundred bucks in your paycheck every two weeks, but you are rolling the dice with medical bills that could cost you thousands. The worst case scenario could put you out of work for weeks with bills piling up. Single or not, you should have some form of health insurance.
- If you have a chance to trade the size of your premium for a higher deductible, do it. Why? Because it will lower your monthly insurance cost and provided that you save that as part of an emergency fund, you will have the money to take care of your deductible when it comes due. The next tip will also result in some cost savings.
- You must sign up for a health saving account if you have a chance. The health savings plan will deduct a set amount of money from your paycheck (pretax) and place it into an account. As a result, your taxable earnings go down and you can use the funds from your account for any health-related costs. Dental, vision, prescriptions, even band-aids and cough medicine can be purchased with the funds you set aside. If you have kids, this is a major must!
- Don’t worry about specialized insurance like cancer insurance. If you have a quality policy as well as a solid health savings account, your cancer will be covered and your costs will be helped by your savings.
- It’s also a good idea to get disability insurance if it’s offered. Get a benefit that pays at least 65 percent of your current income. And waiting periods to start the policy can save you money overall, too.
- Finally, read everything HR puts in front of you. It may seem boring and like an intimidating amount of info to take in, but the devil is in the details. Getting the best deal for you is in there, you just need to find it.
Open enrollment is one of those rare times that you get to dig deep into the age old question: Where did my paycheck go? Analyze and make good choices. In most cases, your decisions are permanent for a year unless you give have a major change such as give birth, get married, etc.
|Written on 12/05/2008 by Mike Koehler. Mike is a multimedia journalist in Oklahoma City working full-time to save the newspaper business while helping his wife raise three kids under age 8. In his spare time he sleeps. E-mail Mike at [email protected].||Photo Credit: Marco Arment|