It’s Open Enrollment season!
A small number of people love nerding out during this time and optimizing their coverage. For the majority of us, however, it’s often a case of checking some boxes and hoping for the best.
I had the privilege of speaking to a member of our community who works as an actuary (the super smart people that calculate the price of insurance) and she gave us some great tips on how to take this open enrollment season to the next level!
1. Check your preferred providers are (still) in-network
For the majority of people, using doctors or other medical providers that are in-network is significantly cheaper. It goes without saying, then you should check your preferred providers are in-network, especially if you’re looking to switch to a different insurance carrier.
2. Use the free cost estimator tools
Most carriers or employers have cost estimators available for you to simulate and estimate the costs to help you understand the cost implications of the different options available to you.
It may be a bit tedious but 20-30 minutes spent on this could be the difference of thousands of dollars over the course of the year!
3. Master your reimbursement accounts
Check out this article on the difference between FSA and HSA… and look to maximize them, especially if you’re in a higher tax bracket.
Remember there are often grace periods even for the “use it or lose it” FSA and if you do end up “losing it” because you over-estimated the amount, it is at least with pre-tax dollars.
4. Integrate the emergency fund into your strategy
When calculating the best coverage for your situation, you may calculate that a plan that has higher deductibles is the best option — however, if you don’t have the emergency funds to cover the deductible, you may end up in high interest debt; offsetting any savings you might have gained from insurance.
5. Make sure you get Long Term Disability Insurance
If you’ve been with or following us for any length of time, you’ll know that we strongly recommend having long term disability, which covers a portion of your income in the event you become disabled and cannot work. Your employer is almost always the best place to buy LTD insurance and, depending on your situation, you may wish to supplement it with additional coverage. Note: you should purchase coverage with after-tax dollars — this ensures that your payout is not subject to income tax!
6. Talk to us if you still need help
All this can still seem confusing. If you need somebody to walk through this with you, or if you don't have access to employer-based options and need help, please don’t hesitate to reach out to us and we’ll do our best to talk through your situation and make sure you’re well-prepared for next year!