Maximize Your Employee Benefits During Open Enrollment

For many companies, the final quarter of the year kicks off their benefits open enrollment period. This is your opportunity as an employee to opt in, opt out, or make changes to your benefits and policies for the upcoming year.

Before submitting your paperwork for the year ahead (or skipping out on this opportunity altogether), it’s worth reviewing your options, assessing your current circumstances, and thinking ahead to what may serve you and your family best in the coming year.

Health Insurance

Health insurance open enrollment comes around once a year, and the decisions you make during this period will shape your healthcare coverage for the next calendar year. Outside of this window, changes can only be made if you qualify for a special enrollment period, triggered by life events like losing coverage, having a child, getting married or divorced, moving, or other qualifying circumstances.

If you receive health insurance through your employer, your choices may be limited, but that makes it all the more important to understand what’s available.

Here are a few key features to compare:

PPO or HMO?

Employer-sponsored health insurance often falls into one of two categories: a Preferred Provider Organization (PPO) or a Health Maintenance Organization (HMO).

A PPO typically offers greater flexibility, allowing you to see specialists and providers within a network, no referral required. As long as you visit a provider or doctor who is within the PPO network, their services will fall within your plan’s coverage.

An HMO works similarly. You must see a provider who falls within the plan’s network. However, it usually requires a referral from your primary care provider before seeing a specialist. While this model can feel more restrictive, HMOs often come with lower out-of-pocket costs when you use in-network providers.

Deductibles & Premiums

Two of the biggest factors in your annual healthcare spending are your monthly premiums and your deductible.

Your premiums are typically subsidized by your employer, meaning they pay a portion and you pay the rest. This is one reason employer-sponsored coverage tends to be more affordable than marketplace alternatives.

Your deductible is the amount you’ll need to pay out-of-pocket for eligible medical expenses, like prescriptions, copays, and procedures, before your insurance starts contributing.

If your plan qualifies as a high-deductible health plan (HDHP), you may be eligible for a health savings account (HSA), which offers a triple tax advantage:

• Contributions are tax-deductible,

• Earnings in the account grow tax-deferred, and

• Withdrawals are tax-free, as long as they’re spent on eligible medical expenses.

Even after meeting your deductible, some costs (like copays and coinsurance) may still apply until you reach your annual out-of-pocket maximum. After that, your plan typically covers 100% of additional covered expenses for the rest of the year (excluding premiums).

Retirement Plan

An employer-sponsored retirement plan is a valuable benefit, and participating as much as you can is a smart step toward long-term financial wellness.

If you aren’t already enrolled, make it a priority to sign up for your 401(k), 403(b), 457, or other employer-sponsored retirement offering. Automatic contributions make saving for retirement consistent and easy. Plus, contributing to a pre-tax retirement account can reduce your taxable income for the year, offering immediate tax benefits.

Some employers incentivize employees to use the plan by offering employer matching contributions. For every dollar or percentage of salary you contribute, your employer will match your contributions, up to a predetermined amount. 

An employer may offer 50% matching for up to 5% of an employee’s salary, for example. Say you earn $100,000. For every dollar you contribute to your 401(k), up to $5,000, your employer would contribute $0.50, totalling $2,500 for the year. Compounded over decades, that’s a significant amount of “free” money for your future retirement.

Consider Increasing Your Annual Contributions

While employer matching is a helpful incentive, it shouldn’t be your limit. At a minimum, aim to contribute enough to receive the full match. Beyond that, look for opportunities to increase your contributions each year.

Every year, the IRS adjusts the annual maximum contribution limit for employer-sponsored retirement plans. Even modest increases, especially if you receive a cost-of-living adjustment or promotion, can make a significant difference over time.

Life & Disability Insurance

Some employers offer employees the option to obtain employer-sponsored life and/or disability insurance. You may, however, need to “opt in” to your company’s policies each year, depending on the terms of your employment.

Life Insurance

Employer-sponsored life insurance is often provided through a basic group life policy. Coverage amounts are typically based on a multiple of your salary and may not be as robust as a private policy. Keep in mind that this coverage usually ends when your employment does.

While the coverage may be limited, it’s often free or low-cost and doesn’t require a medical exam, making it accessible to most full-time employees.

Some employers also allow employees to purchase supplemental insurance policies, which would increase the death benefit or otherwise expand policy coverage.

Disability Insurance

Employers can also offer either short-term disability, long-term disability, or both types of policies to employees. These policies can replace a percentage of your salary if you become unable to work due to illness or injury.

Short-term disability typically provides benefits for a few weeks to a year and may be easier to qualify for. Long-term disability can last for several years or longer, depending on your condition, but often involves a more thorough approval process.

Like life insurance, this coverage may be free or low-cost through your employer, and coverage generally ends if you leave the company.

You may also have the option to opt in or out of coverage each year, or increase coverage to better suit your family’s needs.

Make the Most of Your Employee Benefits

While employees often consider their base salary to be their main form of compensation, your total benefits package can significantly impact your financial well-being. From health insurance to retirement contributions and beyond, these offerings represent real value.

Every employer offers a unique set of benefits, and you may have access to options not mentioned here. If you’re unsure what’s available or what steps you need to take before open enrollment ends, your HR department is a great place to start.

And if you’d like a second set of eyes to help you review your choices and ensure they align with your overall financial plan, feel free to reach out. We’re here to help you make the most of what’s offered.

Robert "Fenn" Giles III, CFP®, CAIA is a Managing Partner of Wealth Advisors of Tampa Bay and serves on the firm’s Management and Investment Committees. WATB is an independent Registered Investment Advisor (RIA) located in Tampa, Florida. Learn more about them at wealthadvtb.com.

This material has been prepared in collaboration with Crystal Marketing Solutions, LLC, and has been edited with the assistance of artificial intelligence tools. The information presented is based on sources believed to be reliable and accurate at the time of publication. This material is for educational purposes only and does not necessarily reflect the views of the author, presenter, or affiliated organizations. It should not be construed as investment, tax, legal, or other professional advice. Always consult a qualified professional regarding your specific situation before making any decisions.