October 16, 2009
Many employers will soon be offering open enrollment for next year's employee benefit coverage. Wading through all that paperwork is a sure-fire cure for insomnia, but considering how much is at stake, you may want to pour another cup of coffee and dive in.
New coverage options. Employers occasionally change benefit plan options as a way to control costs or eliminate underused or unpopular plans. In addition, they sometimes retain the same insurance providers but change certain levels of coverage within the plan; for example, increasing deductibles or copayments or changing eligibility requirements.
In addition, insurance providers themselves may alter terms of coverage: For example, medical plans sometimes change which medications they will cover and at what copayment levels. And individual doctors, clinics and hospitals sometimes drop out of plan provider networks. Thus, it is wise to review plan changes carefully and check with your providers before automatically signing up for the same plan as last year.
Prepare for possible economic hardships. In these uncertain times, it pays to know all your options in advance. For example, if you or your spouse suspect you might be vulnerable to a layoff, find out the relative costs to join the spouse's employer's medical plan or buy COBRA coverage (COBRA is a federal law that allows many people to retain health coverage under their former employer's plan for a certain amount of time at their own expense.)
Maximize tax advantages. If your employer provides a retirement savings plan and dependent care and health care flexible spending accounts (FSAs) and you're not participating, you could be missing out on thousands of dollars in annual tax savings.
Family status changes. If you marry, divorce, or gain or lose dependents, it could impact the type – and cost – of coverage options best for you. A few examples:
A little homework now can save you a lot of money later on.
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