Open enrollment can be a stressful time for everyone involved. The human resources department is trying to coordinate the employees’ enrollment choices with the benefits providers. Employees have to learn about everything they’re offered and make an educated decision on what benefits to select. That includes how to maximize perks when there are two working adults in the household.
As a Society for Human Resource Management Certified Professional® and the only HR person in an office of more than 350 employees, I have dealt with all types of issues when it came to open enrollment. Fortunately, my career created a learning opportunity on how to run open enrollment the right way.
So, what can you do to make this a seamless process for both you and the HR department? Use these 7 tips to make open enrollment easier.
1. Know the open enrollment dates
It is up to you to make sure you take advantage of the open enrollment period. Be sure you know when your company has open enrollment because it can be your only time to adjust benefits for the coming year.
Also, if you are coordinating with a partner, make sure you take note of their his or her company’s open enrollment dates as well. Every company has different times for open enrollment., so there is no hard and fast rule. However, it typically falls between September and November, but I have also seen it happen in the middle of the year. Don’t get caught off guard.
2. Evaluate your current benefits
Before open enrollment starts, review the benefits you currently are receiving. Your pay stub can be an excellent resource to find this information.
All companies code paystubs a little differently. However, you should be able to find the benefits you’re paying for or contributing to under the deductions or withdrawals section on your paystub – which usually is opposite the income section. Standard deductions might see included medical insurance, dental insurance, 401(k) contributions, life insurance, vision insurance, long- term disability insurance, health savings account or flexible spending account contributions, and accidental death and dismemberment insurance.
Review those deductions to make sure you know what you’re paying for and whether you actually used the benefits. I have seen employees who signed up for every benefit offered without understanding what they were signing up for. Most of the time, it was because they didn’t want to take the time to learn about the benefits offered, so they just took everything. Take this time to go through your payroll deductions to which benefits you truly need and which aren’t worth it to you.
3. Ask these questions to decide what benefits you need
I have also seen people who signed up for the bare minimum and missed out on benefits that would’ve been useful. Everyone’s situation is different, but most employees should have at least medical, dental and vision insurance and make contributions to a 401(k) or similar workplace retirement savings account.
When evaluating your benefits package, consider what your needs will be or what life changes you can expect for the coming year:
- Are you trying to get pregnant or are expecting a baby?
- Are you getting married (or divorced)?
- Is your child turning 26 and can no longer be covered under your health insurance?
- Does your significant other have coverage, or will you need to include your partner in your health coverage?
- Are you on track for retirement, or do you need to save more?
All of these are essential questions to ask yourself during the open enrollment season because they can make a difference in what benefits you choose to elect.
Next, ask the human resources department for a “benefits at a glance” sheet that summarizes all the benefits and related costs. If there is something you think you might need, ask for more information about it. See how the benefit fits in your health and financial picture. Does it make sense?
4. Understand active versus passive enrollment
You need to know whether your company has a passive or active open enrollment process. With a passive open enrollment, your previous benefits will roll over without you having to take any action. In an active open enrollment, everything gets cleaned off the slate, and it is up to you to pick what benefits you want. If you do not take action, you will not have benefits for the coming year.
Human resources departments should make it clear which strategy they use. But if you are unsure, ask.
5. Learn how benefits can work with each other
It is essential to know what benefits are available and their purpose. You also should know how benefits can work together.
For example, if your employer offers a high-deductible health insurance plan, it also might provide you with the opportunity to set aside pre-tax dollars in a health savings account to pay for deductibles, copayments and other qualified expenses. Your employer might also offer hospital indemnity insurance, which covers out-of-pocket costs for hospital stays. Taking advantage of an HSA and hospital indemnity insurance can help you cover medical costs when you have a high-deductible health plan.
Personally, I have used my health savings account as a retirement vehicle. Because I don’t go to the doctor often, I pay my deductibles out of pocket and keep the receipts. This keeps my HSA dollars intact for when I am older and will inevitably need additional care. Many HSAs allow you to invest your contributions in an investment account once you reach a certain threshold, typically around $2,000.
6. Choose beneficiaries carefully
You can name beneficiaries for your retirement plan account, group life insurance coverage and similar benefits you get through work at any time. However, open enrollment can be a good time to make sure everything is accurate while benefits are top of mind.
Beneficiaries are the people you want to receive payouts from your life insurance policy and funds in your retirement account if you die. If you’ve experienced a major life event – such as a marriage, divorce or birth of a child – in the past year, make sure you update your beneficiary designations to reflect that change.
7. Stay informed
Education is your most significant defense against making substantial financial mistakes, including not taking full advantage of your employer’s benefits.
If you have questions about any of the benefits offered, ask your HR department for help or clarification. It is there to be your point of contact for any benefits questions or concerns. If the HR department members don’t know the answer, they will be happy to point you in the right direction.
The many options and deadlines can be overwhelming, but with these tips, you will be able to make the open enrollment process as smooth as possible.
Tiffany Grant is a financial educator and speaker who founded the Money Talk With Tiff blog and podcast. She has been educating individuals, families, and corporations on the importance of financial literacy and wellness for over 10 years. Opinions are those of the author.