Originally Published by Prudential.
For many employees, making annual benefits decisions is as bad as having a cavity filled. You want to just get it over with—quickly. But that’s a mistake.
The seemingly innocuous choices made during annual enrollment could have big consequences for your wallet and overall financial wellness.
Prudential’s 2018 Financial Wellness Census found that about half of Americans are struggling to manage day-to-day expenses and plan for the future. Even among those who are doing well financially, more than a quarter remain anxious about their finances. Financial wellness requires making thoughtful choices about things like daily expenses, long-term goals and protection. And the options open enrollment offers can end up being critical to our financial wellbeing.
“Never underestimate the importance of all your benefit options,” says Jamie Kalamarides, president, Prudential Group Insurance. “It may seem tedious, but taking time to carefully review the programs available and make the right choices can have a big impact in the long run. And technology is making it easier for employees to evaluate their options, as new apps and online services transform how we enroll in benefits. Employee benefits only benefit the employees who use them.”
Here are 10 tips to help you make the most of this season’s open enrollment:
- Perform an open enrollment checkup. Don’t assume your coverage should stay the same. Carefully review your current choices, considering not just the coverage, but how much you are paying for them. Are you getting the most value for your money Has your situation changed in the last year
- Basic is not enough. Employees often look at medical, dental and vision programs as their top priority, and with good reason. However, don’t overlook other benefits, such as life and disability insurance, plus critical illness and accident insurance, which complement those core offerings by protecting against unexpected risks, which is key to your overall financial wellness.
- Spouses need coverage, too. The value of all the work a stay-at-home parent performs is often underestimated if not altogether overlooked. However, when you consider the costs of childcare, housekeeping, shopping/errands, meal preparation and chauffeur services—as well as caring for aging or infirm loved ones—outsourcing these services would result in a tremendous, if not crushing, financial burden for the average family. That’s why it is so important that both heads of household have adequate life insurance coverage.
- Don’t forget disability insurance. You’re healthy, strong and productive. But accidents can happen. Your health can change. Disability insurance replaces lost income if you’re unable to work. And don’t forget that short-term disability insurance provides paid leave after childbirth.
- Take advantage of cost and convenience. Purchasing benefits like life or disability insurance through an employer can save you money in two ways: First, taking advantage of group rates means you will often pay less for these benefits than if you purchase them on your own. Second, you’ll pay for these benefits through payroll deduction, which may help lower your taxes.
- Look for new solutions in your benefits package. Many employers are offering programs to help their employees feel more financially secure. In a 2017 Prudential survey only 22 percent of individuals described themselves as feeling financially secure. And this comes at a time when more workers are relying on their workplace as a primary source of insurance and savings—so check to see whether your employer is offering new programs that meet your needs.
- Portability is key. Job hopping, whether for a promotion, a higher salary or the excitement of living and working in a new city, is becoming more commonplace—even expected, by employers. And as the gig economy grows, the ability to maintain income protection and health insurance benefits will become even more critical.
- Emergency savings/student loan debt matter. Financial stress causes distraction at work, which can lead to costly accidents and mistakes, absenteeism and lost productivity. Most American workers are tempted to tap their retirement plans when emergencies arise. That’s why more employers are beginning to offer resources to help build emergency savings and to pay off student debt. Make sure to look carefully through your annual enrollment materials and determine whether your employer offers such services.
- Look for tools to help make decisions. Often, employers will provide websites where you can not only enroll, but also find tools like calculators and videos to help you make sense of your benefits. Take advantage of those tools, which can help you to understand your financial protection needs and the best options to meet them.
- Ask for help. With all the options out there, it’s easy to feel confused. Don’t hesitate to contact your company’s benefits experts or human resources team. Or speak to a financial professional and learn more about how to select the coverage that will fit your personal needs.