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What To Keep In Mind During Open Enrollment

It’s that time of year again. No, I’m not talking about the looming holidays. I’m talking about open enrollment. That period when you have the chance to reconsider and reconfigure your insurance choices —  after wading through a slew of materials filled with jargon that’s incomprehensible even to doctors.

It can feel overwhelming and frustrating to try to make sense of all of the copays, deductibles, minimums, maximum, and in-and-out-of-network options. And did you know that simply staying with last year’s plan choices could be a costly mistake?

Here are four things to know and consider before your open enrollment period closes. These straightforward tips may alleviate the headaches associated with the process and could even reduce your annual costs.

1. Health Insurance – Premiums Are Ballooning

Annual family premiums for employer-sponsored health insurance rose 5%, up to an average of $19,616 this year, says the 2018 Kaiser Family Foundation Employer Health Benefits survey. And, on average, “workers this year are contributing $5,547 toward the cost of family coverage, while employers pay the rest,” reports CNBC.

Additionally, more employees now also are facing a deductible, which is also increasing. The average individual deductible is $1,573, which represents a rise from last year’s figure.

2. Health Savings Accounts – Limits Are Increasing

The flipside is that the contribution caps to health savings accounts are also heading upwards. Remember, these accounts pair well with high-deductible health insurance plans.

This year, employees and employers can contribute a total of up to $3,450 for individual coverage and as much as $6,900 for family coverage. Next year, in 2019, these totals will rise to $3,500 for individual coverage and $7,000 for family coverage, according to the IRS. If you’re 55 or older anytime in 2019, you’ll continue to be able to contribute an extra $1,000.

Check to see if your employer offers a flat contribution or matching funds for your health savings account. It’s good practice to max out those contributions for the year, as they then grow tax-free until you take distributions to cover qualified medical expenses.

3. Life insurance – Do You Need More?

Consider what’s the right amount for you. Then, decide if you would like additional coverage, or supplemental insurance, through your workplace group plan. You could also decide to shop for an individual term life insurance policy. These choices depend on how many dependents you would want to support in the event something happens to you. Many experts say your policy should provide the equivalent of at least one year’s worth of income.

Plus, this choice may not be as expensive as you think. “Getting $50,000 worth of coverage on a 20-year term life insurance policy would cost a healthy 40-year-old woman about $180 a year and about $200 a year for a man who is the same age,” reports CNBC.

4. Disability insurance – Do You Need It?

This is perhaps the most overlooked employee benefit, but these powerful plans replace a portion of your paycheck (generally 40% to 60%) if you ever get sick or injured and aren’t able to work. And, they’re relatively affordable. In many cases, a long-term disability insurance policy costs 1% to 3% of your annual salary. Let’s hope you never need it, but it’s good to know you have it if you ever do.

Now that you’re armed with these four considerations, you can hopefully head into open enrollment feeling better prepared to make smart choices. So, go ahead, be choosy, and find the best mix of benefits for you.

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