As open enrollment season approaches, we know that navigating the array of benefit options can feel overwhelming. To help you make more informed decisions, we've put together a guide to understanding and optimizing your benefits package. This is your opportunity to review and adjust your choices for the upcoming year, ensuring your benefits align with your personal and family needs.
1. Health Insurance
Health insurance is often the cornerstone of your benefits package. During open enrollment, you can select from various plan options, including:
HMO (Health Maintenance Organization): Requires choosing a primary care physician (PCP) and often involves getting a referral for specialist care.
PPO (Preferred Provider Organization): Offers greater flexibility in choosing healthcare providers and does not require referrals.
High Deductible Health Plans (HDHPs): These plans have lower premiums and higher deductibles but allow you to invest in a Health Savings Accounts (HSAs).
2. Fringe Benefits
Fringe benefits can include a range of perks beyond your standard insurance coverage:
Wellness Programs: Gym memberships, smoking cessation programs, and wellness coaching.
Employee Assistance Programs (EAPs): Confidential counseling and support services for personal and work-related issues.
Educational Assistance: Tuition reimbursement or scholarships for continuing education.
3. 401(k) Retirement Plan & Deferred Compensation
Your 401(k) plan is crucial for your long-term financial security:
Contribution Limits: For 2024, you can contribute up to $23,000, or $30,500 if you're 50 or older. Contribution limits for 2025 should increase and will be decided by January 2025. Your 401k plan may provide you with some additional savings opportunities into Roth 401k and/or after-tax contributions.
Company Match: Check if your employer offers a matching contribution and try to contribute enough to maximize this benefit.
Investment Options: Review the available investment options and adjust your portfolio based on your risk tolerance and retirement goals.
Deferred Compensation Plan: A deferred compensation plan is a financial arrangement where an employee chooses to receive a portion of their earnings after separation from their employer. This type of plan can offer tax advantages by reducing current taxable earnings and providing an opportunity for tax deferred growth. Eligibility is subject to IRS guidelines and depends on your income and organizational status
4. Health Savings Account (HSA)
If you’re enrolled in an HDHP, an HSA can offer significant tax advantages:
Contribution Limits: For 2024, you can contribute up to $4,150 for individuals and $8,300 for families.
Tax Benefits: Contributions are tax-deductible, growth is tax-free, and withdrawals for qualified medical expenses are also tax-free.
Portability: HSAs are owned by you, so the funds remain with you even if you change jobs or retire.
5. Flexible Spending Account (FSA)
FSAs are another tool for managing healthcare expenses:
Contribution Limits: For 2024, you can contribute up to $3,050.
Use-It-or-Lose-It: FSAs generally require you to use the funds within the plan year or lose them, though some plans offer a grace period or carryover option.
Qualified Expenses: Use FSA funds for out-of-pocket medical expenses, including deductibles, co-pays, and some over-the-counter items.
6. Life Insurance
Life insurance provides financial protection for your loved ones:
Coverage Options: Evaluate both basic life insurance provided by your employer and optional supplemental policies you can purchase.
Beneficiary Designation: Ensure that your beneficiary information is up-to-date and reflects your current wishes.
7. Disability Insurance
Disability insurance offers income protection if you’re unable to work due to illness or injury:
Short-Term Disability (STD): Covers a portion of your salary for a short period, usually up to six months.
Long-Term Disability (LTD): Provides income replacement for extended periods, often beyond six months.
8. Employee Stock Purchase Plans (ESPPs)
ESPPs allow you to purchase company stock at a discount:
Discounts: Typically, you can buy stock at a reduced price, often through payroll deductions.
Tax Considerations: Understand the tax implications of buying and selling stock through the plan.
Action Steps:
Review Your Current Elections: Assess your current benefits to determine if they still meet your needs.
Compare New Options: Look at any changes to plan options, costs, and coverage details for 2024.
Make Decisions: Choose the plans and coverage levels that best fit your personal and family needs.
Complete Enrollment: Ensure you complete all required paperwork or online enrollment forms by the deadline (End of November for most employers)
We hope this guide helps you confidently navigate open enrollment and make the best choices for your benefits package. If you have any questions or need personalized assistance, please do not hesitate to reach out to our team.
