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Published on: November 19, 2019
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As an employee, you're generally entitled to a variety of benefits, from health insurance to participation in a retirement savings plan. And the time to choose those benefits will soon be upon us.
That's right -- we're getting close to open enrollment at work, and it's a period many employees dread. In fact, in a recent Metlife survey, one-third of U.S. workers said they'd rather discuss their weight than deal with selecting employee benefits.
If you're in the same camp, you should know that open enrollment doesn't have to be a harrowing process. Here are a few tips that'll help you navigate it more easily.
The decisions you make during open enrollment at work will generally impact you financially for a solid year. That's why you shouldn't rush through the process of selecting your benefits.
Unfortunately, many workers do rush through the process, with an estimated 20% spending just a few minutes to review their benefits. The reality is that depending on the number of items you need to make a decision on, you probably need a solid hour or two, if not more, to comb through your options and land on the right choices.
Many workers opt out of certain benefits, or choose the wrong benefits, because they don't fully understand how they work or why they're advantageous. Case in point: In the aforementioned survey, 20% of respondents said that the only reason to buy life insurance is to cover funeral expenses. In reality, life insurance serves many important purposes and can do more than just pay for the cost of final expenses. Additionally, almost one-third of respondents said they didn't really understand what short-term disability insurance covers, even though such plans can serve as lifelines when illnesses or injuries render people unable to work.
The takeaway? If there's an aspect of your employee benefits you don't understand, reach out to your administrator or human resources contact and ask the questions you need to gain clarity. The same holds true if you're on the fence about opting in for a specific benefit and want advice.
Along these lines, make absolutely certain you understand your health insurance choices before landing on a plan. A low-premium plan might seem like your best bet, but if it offers limited coverage and comes with a high deductible, it may not be worth it.
These days, many companies are expanding their benefits beyond the traditional health insurance-life insurance-disability insurance combo. For example, your employer might offer pet insurance, or a legal plan that lets you pay a preset fee for access to an attorney during the year.
Sometimes, it makes sense to pay for these added benefits -- but sometimes, they're just a waste of money. A legal plan, for example, makes a lot of sense if you're planning to have a will drafted in the coming year, or if you think you'll be buying a home and will need an attorney to help with the closing. But if you're not anticipating needing a lawyer, it's probably not worth it to pay the fee attached to that legal plan.
The same holds true for pet insurance. Unfortunately, it doesn't always cover the things you think it will, so make sure you're not throwing your money away by purchasing it through your employer.
Ideally, these tips will make open enrollment a lot less stressful for you. In addition, be sure to pay attention to the deadlines set by your employer. The last thing you want to do is put off making your decisions and lose out on the chance to capitalize on the benefits you're entitled to.
About the Author
Jackson Hewitt is partnering with Motley Fool to offer content about taxes, saving, and other financial topics that could help clients get ahead and stay ahead. "3 Tips for Tackling Open Enrollment at Work" by Maurie Backman was originally published September 25, 2019.