Tips for a Successful Open Enrollment

With Fall now in full swing, it's an important time in the world of Total Rewards—especially in the United States, where Open Enrollment season is upon us. This is when employees elect their benefits for the upcoming year, making it a crucial moment for everyone.

My message this year is simple: take the time to explore your benefits and ensure you're leveraging these programs fully. Too often, employees miss out on valuable opportunities. Even I, someone who works in Total Rewards (in other words, I should have known better), missed out on many opportunities in the past. I’m sharing this to help you avoid those same missed chances.

If you’re interested in some specific items to check, keep reading for more detail.? I’ll caveat that this is somewhat US-centric but there are analogies in many other countries.

In the interest of synthesizing the very large universe of programs out there to some practical steps to make the biggest impact, I would recommend the checklist below.? If you’re using all of these programs, congrats, you’re probably netting some pretty solid gains and setting yourself up for future success!

1. Retirement contributions.? Ensure you're maximizing retirement contributions, such as your 401(k) or equivalent. Always take full advantage of any employer match—it's free money! Many plans also offer free financial advisory services.* If you're maxing out contributions, check if your employer allows Roth in-plan conversions (a 'mega backdoor Roth'), which could be a good option.
2. High deductible medical plans.? Despite the name, these are really 'low premium' plans. While you'll need to pay higher deductibles, you can often save significant money over the course of the year due to their lower monthly premiums. Don’t overlook these like I did for years! These plans are also typically paired with the next item:
3. Health savings accounts (HSA).? HSAs are a powerful tax-advantaged tool—offering 'triple tax free' benefits: contributions, growth, and withdrawals are all tax-free under the right circumstances. Many employers even contribute to HSAs, adding another reason to consider them.
4. Flexible spending accounts (FSA).? FSAs let you use pre-tax dollars for eligible expenses, effectively giving you more purchasing power. There are different types of FSAs employers will offer, for example those for health expenses or dependent care. I’ve used a dependent care FSA to save on childcare costs, and every bit helps. Just remember, these are 'use it or lose it' each year.
5. Employee stock purchase programs (ESPP).? These are programs where publicly traded companies allow employees to purchase their stock, often at a discount.? The discount is effectively a gift from the company to incentivize employees to own stock in the firm, which aligns their interests with the company.? If you’re bullish on the firm, this could be worth checking out as well.

Items 1 and 5 on this list can typically be opted into outside of the open enrollment period, but they’re worthy of inclusion on a benefits optimization checklist such as this.

Thanks for reading, and I wish you a successful Open Enrollment season! Are there other programs that should be on this list? Share your thoughts in the comments!

*?In the US, ask if they are a fiduciary advisor, this means they are obligated to provide advice that is in your best interest, even if that conflicts with the interests of their employer.