Common Open Enrollment Pitfalls You Can Avoid

October means pumpkin spice everything, football, and open enrollment. Yes, the annual period when employees can make changes to their insurance and benefits is here, and it is often met with confusion. The barrage of options, intricate details, and the consequences of making the wrong choice can spook even seasoned professionals. This is where a financial advisor can become indispensable. By working closely with an advisor during open enrollment, individuals can sidestep common pitfalls and help utilize their benefits better. Here’s how.

Understanding the Big Picture

Before diving into specifics, it’s worth noting that every financial decision, including choices made during open enrollment, plays into your larger financial narrative. A financial advisor can provide a holistic view, ensuring that selections made during this period align with broader financial goals, retirement plans, and immediate needs. With that in mind, allow us to share the 5 most common pitfalls we see.

Pitfall 1:Under-insuring to Save on Premiums

A common misstep during open enrollment is gravitating towards plans with the lowest monthly premiums. While this can seem cost-effective upfront, such plans often come with high deductibles and out-of-pocket costs. A financial advisor can break down the real cost of each option, considering both the premium and potential healthcare expenses. This helps individuals select a plan that won’t lead to unexpected high costs later. Misstep avoided!

Pitfall 2: Over-insuring ‘Just in Case’

On the flip side, some individuals opt for the highest coverage available, resulting in unnecessarily high premiums for services they may never use. With a comprehensive understanding of your health needs and financial situation, a financial advisor can guide you to a plan that offers suitable coverage without overpaying.

Pitfall 3: Ignoring Tax-Advantaged Accounts

Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) offer a way to set aside pre-tax dollars for health expenses. Not maximizing these can mean missing out on potential tax savings. Financial advisors can not only explain the intricacies of these accounts but also recommend contribution levels based on projected medical expenses. The more you know!

Pitfall 4: Overlooking Non-Health Benefits

While health insurance is often the focus of open enrollment, other benefits like dental, vision, life, and disability insurance shouldn't be ignored. A financial advisor can review all available options, ensuring that you're fully covered across the board.

Pitfall 5: Doing What You’ve Always Done Before

It’s convenient to auto-renew existing plans. However, life situations and plan details change. Yearly reassessment with a financial advisor helps ensure that your chosen benefits are still the right fit for your evolving needs. We’ve got your back!

Open enrollment is more than a yearly chore; it’s an opportunity to safeguard your health, protect your assets, and make strategic financial decisions. By partnering with a financial advisor, individuals can navigate the myriad of choices confidently, ensuring that they're not only protected health-wise but also financially poised for the future.

Caring about your needs and planning accordingly is quite literally our job. We invite you to schedule a complimentary initial consultation with us to discuss how working together will benefit you.