Here’s how to maximize your benefits during open enrollment
Open enrollment season is underway.
With millions of employees reevaluating their job or considering a change, employer-sponsored benefits are an even greater consideration heading into 2022.
About 157 million Americans rely on employer-sponsored health insurance coverage and yet, before the Covid-19 pandemic, many people spent very little time reviewing their workplace health-care plan during the open enrollment period.
Now, amid the ongoing public health crisis, more people are feeling the financial and mental toll after over a year of working from home. And they’re taking a harder look at what their employer is offering in the way of support.
Typically, open enrollment runs through early December. Here are a few things to look out for before then:
1. Health insurance
For starters, consider what your health coverage costs you now that premiums and deductibles are changing.
Annual family premiums for employer-sponsored health insurance — the amount it costs each year for insurance, often divided into 12 monthly payments — will be about 3% lower in 2022, after factoring in subsidies enacted under the American Rescue Plan Act, according to the Kaiser Family Foundation.
However, more workers have a deductible — the amount you pay before insurance kicks in — and that deductible is rising. In 2020, the average single deductible was $1,945, roughly twice what it was a decade ago.
“If you are shopping for a plan, the obvious thing is the premium, but what people really should be focused on is the total out of pocket,” said Lisa Lough, the president of individual and family plans at Cigna.
“Think about how you are going to consume health care,” she said. “If you are just going to go in for physicals or if you have chronic conditions, don’t just look at the price tag on the premium but your deductible before your health-care plan starts to cover costs.”
2. Health savings accounts
One way to help with health-care costs is to use tax-advantaged accounts for medical expenses — specifically, health savings accounts or flexible spending accounts.
In both cases, you use pre-tax money to cover out-of-pocket expenses, including doctor visits and prescription drugs.
To be able to use an HSA, you need to be enrolled in what’s called a high-deductible health plan, or HDHP. Contributions then grow on a tax-free basis, and any money you don’t use can be rolled over year to year.
For 2022, employees and employers can contribute a total of up to $3,650 for individual coverage and up to $7,300 for family coverage.
Check to see if your employer offers a flat contribution or matching funds and aim to max out those contributions for the year, said TIAA’s Chief Financial Planning Strategist Dan Keady.
“Almost everybody can go out there and find some savings or missed benefits.”
Further, HSA savers who have the means should invest at least a portion of their money to keep pace with or beat health-care inflation, Keady said.
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