It’s not only Q4 and pre-holiday blitz; we are also close to Open Enrollment. No matter if you’re just starting at your job
, a seasoned employee, a retiree, or a freelancer/small business owner, this is the time when you will hear about “selecting coverage” or whatever corporate speak that sneaks into your email.? It’s that time of year again—open enrollment season! This is a crucial time to focus on your benefits. Open enrollment is your yearly chance to choose or change your health insurance, retirement plans, and other benefits like health savings accounts (HSAs) and flexible spending accounts (FSAs).?
I remember when I first started in corporate I knew I had to have insurance coverage, but I didn’t understand what key things were and that could’ve been costly. That experience taught me the importance of understanding my benefits, and now I’m here to help you navigate the process so you can avoid feeling the same way. As a financial planner, I’ve seen so many people miss out on great benefits because they weren’t sure how to make the right choices. Let’s break it down so you can make the most of it!
What is Open Enrollment?
Open enrollment is the period when you can sign up for or change your health insurance and other benefits through your employer. This year, it starts on November 1 (depending on your employer and platform), so it’s not only about marking your calendar but also optimizing your options. Missing the cutoff could mean waiting until next year for changes. It's your opportunity to ensure your benefits still meet your needs or to make adjustments if they don't. I’m sending this early in enough time to for you review what you currently have and position better for 2025.?
Key Dates & Deadlines
Be mindful of the cutoff dates for making changes. Most companies aren’t flexible outside this window, meaning decisions made during open enrollment will impact you and your family throughout the next year. I saw someone who missed open enrollment by 1 day and it was costly in coverage and energy trying to find another option. It’s worth starting early to review what you have and research any changes in your health coverage or retirement accounts for the upcoming year.
Open Enrollment = "More" Options + Observations
Health Insurance Choices:
- Know Your Needs: Consider how much healthcare you needed last year. Did you visit the doctor often? Need prescriptions? Compare this year’s usage to what you might need next year.
- Cost vs. Usage: Compare premiums (monthly payments) and out-of-pocket costs (like co-pays or deductibles). If you visit the doctor frequently, a higher premium plan might save you more in the long run.
- Heads Up On New Rules: With new federal regulations, more people may join open enrollment this year. This could impact your choices, especially if you're new to navigating health plans. Check out new options and potential changes in your coverage. Especially when it comes to service providers (your primary doctor, dentist, etc.). Also, why are health insurance, dental insurance, and vision insurance all separate: we only have one body. Scam.?
Retirement Plans:
- 2025 Contribution Limits: For 2025, the contribution limits for 401(k) and similar plans are increasing to $23,000 for individuals under 50, and $30,000 for those aged 50 and above (this includes the catch-up contribution). This is a great chance to plan and see if you can maximize your contributions next year. If you can hit the match, good - but check to see if you can bump up your contribution by at least 1% - look at your budget, and financial goals, and how to match them up. Check to see what your savings rate was this year and the year before to plan your next year out.?
- Review Your Holdings: You got that 401K - so how is it adding up? Check how your investments are performing. Are your assets aligned with your retirement goals? Now is a great time to rebalance your account, if necessary. Look at your asset allocation (how much you have in stocks vs. bonds) and make adjustments. Don’t just contribute to this fund, but make sure that your dollars are distributed to grow. Also, don’t only push your Target Date Fund, look into other funds.? Call your servicer—remember, you’re paying for this in your service fee!—and ask about your account's performance. If you have RSUs (restricted stock units), check their value and plan accordingly.
- Rebalance Your Account: If needed, adjust your asset allocation to stay in line with your financial goals and risk tolerance. Also, check to see if you have old 401Ks and roll them into an IRA
.
HSAs And FSAs:
- Max Out Contributions: For 2025, the contribution limits for HSAs are $4,150 for individuals and $8,300 for families. The FSA contribution limit is $3,200. If your budget allows, maxing out these accounts is a smart way to lower your taxable income while saving for future medical expenses. In my blog post
, I mentioned that you should look back and what you spent or needed in the past to position how much you can contribute (by your budget). I also recommend that you use the calendars to calculate your buys or usage. Yes, you can use FSAs and HSAs for platforms like Sephora, Amazon, and Target - but make sure that it’s not taking away from therapy or a massage after work has stressed you. Research to see which option matches your insurance.?
- Investing Through HSA: If your HSA allows investing, consider allocating some funds to the market for potential growth. This strategy can add an extra layer of savings for healthcare costs down the road. Decide your cash-and-carry ratio within your HSA. Use It or Lose It: Don’t forget—FSAs usually have a "use it or lose it" rule. Make sure you're on track to spend that money before the year ends.
In-Network vs. Out-of-Network
A big change this year is the shift in healthcare networks. I’ve been hearing people say that their specialist used to be in-network and now they aren’t. Please contact them to see if they are within your coverage for 2025.? Understanding in-network vs. out-of-network providers can make a huge difference in how much you pay:
- In-Network Providers: These are your best bet for lower costs. These doctors and hospitals have agreed to charge your insurer less, saving you money.
- Out-of-Network Providers: You’ll pay significantly more if you use these providers, or your insurance may not cover them at all. It’s essential to confirm which doctors are in-network to avoid surprises.
Tips For Reviewing Your Benefits:
- Annual Check-In: After you select your benefits, take time to reflect. Do they meet your health and financial needs? A mid-year check-in can also ensure you're still aligned with your goals.
- Track Your Usage: Did you fully use your benefits this past year? If not, maybe it’s time to switch to a lower premium plan. If you had high medical expenses, a plan with better coverage might be worth it.
Common Health Insurance Terms To Know For Open Enrollment (In Plain English)
Open enrollment can feel like navigating a maze of health insurance jargon, but don’t worry! Here’s a quick breakdown of the most common terms and plan types you’ll come across:
- Premium: The amount you pay every month to keep your health insurance active. Think of it as a membership fee to have coverage.
- Deductible: The money you pay out of pocket before your insurance starts covering certain services. If your deductible is $1,500, you pay that first, then your insurance kicks in.
- Co-pay: A flat fee for things like doctor visits or prescriptions. If your co-pay is $25, you pay that when you see your doctor.
- Co-insurance: After you meet your deductible, this is the percentage of the bill you still need to pay. If your co-insurance is 20%, you’ll pay 20% and your insurance covers the other 80%.
- Out-of-pocket maximum: This is the most you’ll have to pay in a year. Once you hit this amount, your insurance pays 100% for covered services.
- PPO (Preferred Provider Organization): A plan that gives you more flexibility when choosing doctors and specialists. You can see out-of-network providers, but you’ll pay more. You don’t need a referral to see a specialist.
- HMO (Health Maintenance Organization): A plan where you have to choose a primary care doctor and get referrals to see specialists. It’s more affordable but limits you to doctors in the network.
- HDHP (High-Deductible Health Plan): A plan with lower premiums but a higher deductible. It’s often paired with an HSA (Health Savings Account) to help cover those higher out-of-pocket costs.
Understanding these basics will make it easier to choose a plan that works best for you. Always feel free to ask questions about what you’re signing up for!
Money tip: For any part of your plan if you have beneficiaries, please make sure that you set them and update them if needed. This goes for your employer-based life insurance
and/or your retirement account.?
Now is the time to get organized, review what’s available, and maximize your benefits for the year ahead! Also, contact your HR team at work to ask questions before that period pops up in your inbox! Ha!?
Looking For More Help?
Are you looking to enhance your team's/organization’s financial education and well-being? I would love to share insights on financial planning, retirement strategies, and more tailored to your organization's needs. If you’re interested in having me speak to your group or would like more information, please let me know!
Together, we can empower individuals to take charge of their financial futures.
