There is a season for everything: allergies. Taxes. Vacation. Back to school. And social benefits.
This month and next, millions of American workers must choose from a wide range of benefits, calculate costs and determine which workplace offerings are best for their health and their wallets.
With broader benefit options, rising healthcare costs and a wide choice of deductibles, it’s difficult to know what to do or where to start.
“Most employees will have to go through a process to select more than 20 benefits, enroll and possibly impact costs,” said Jim Priebe, chief strategy officer at Empyrean Benefit Solutions, a division of Securian, based in St. Paul. Financial. “But how do you decide? »
To help, we asked HR and finance professionals what’s new in benefits and the answers to your most pressing questions.
Five Things to Do as Open Enrollment Begins
Experts give advice on how to get started, but say the most important thing is to know your deadline and avoid procrastinating. Otherwise, you could miss out on a host of new benefits employers are offering to retain you, recruit new workers and stay competitive in a tight job market, said Lisa Tuttle, a financial advisor at Ameriprise.
Phil Hague, who works at 3M, said he expects its open enrollment to begin this week. The company usually offers online stories with “People like me” different benefit scenarios depending on age, whether parents, single or in good health. Employees can then reflect their choices, he said.
“So it’s a very useful way of doing things at 3M,” he said. “But it’s a lot of math. I don’t try to overanalyze the logic of it all because it makes my head hurt.”
Once you open this HR registration portal, experts told you not to ignore information like 3M offers. They offer the following advice:
Dig. Married? Sit down with your spouse. Compare their 2024 workplace benefits and costs with yours. Don’t pay twice for the same benefit. Once you’ve evaluated coverages and options, decide which spouse pays what.
A word of warning: check whether premiums are calculated monthly or per paycheck.
“Make this calculation carefully,” Tuttle said. Some customers mixed up their weekly and monthly premium schedules and accidentally chose a more expensive option, she said.
Read carefully. Some employers include a “spouse supplement” if you include your spouse in your health insurance plan. This supplement can be $100 per month or per paycheck. It might therefore make financial sense for each working spouse to operate their own employer’s plan separately.
Consider flexible spending accounts (FSAs). Consider pre-tax FSA plans to pay for medical insurance or child care costs. This tax tip can save you a lot.
Many employers also contribute to Worker Health Savings Account (HSA) plans, which is helpful. “I am a strong advocate for FSAs and HSAs,” said Anne St. Martin, senior knowledge specialist at the Society for Human Resource Management (SHRM). “They can be intimidating at first, but I encourage employees to make the effort to learn about them. The tax savings are significant.”
Check to see if long-term disability insurance is an option. Long-term disability insurance protects your income if you become disabled and unable to work. There are fees. But experts say it’s often worth it, especially if you really need that salary to support yourself and your family.
Consider the benefits of legal services. These benefits are being offered by a growing number of employers – some for free, others at a nominal cost. You can save $1,000 to $1,500 by using this benefit for estate planning, which includes creating a will, power of attorney and health care directive. For example, Amazon is rolling out 30 days of free digital legal services to all employees this year.
“It’s one of those blockbuster products,” Tuttle said. “Your employer (can) give you a list of about 20 attorneys in your area who accept this kind of plan. It’s probably the most underutilized benefit I see.”
Look for new benefit offerings. Free legal services are just one of the many new benefits to watch out for this year. Labor shortages and a desire to bring more workers back to the office have pushed many employers to add extras.
SHRM, which has 300,000 members, reports workplace benefits such as pre-tax transportation accounts, child care subsidies, extended parental leave, medical travel expenses and even free financial advice. Not all of them are connected to open enrollment, but you should check.
“We’ve seen an increase in voluntary (employer) benefits related to things like pet insurance, legal assistance programs, student loan repayment and other things like protection plans against identity theft,” Empyrean’s Priebe said.
Some Minnesota employers offer wellness programs with built-in health deductible discounts to incentivize staff to hit the gym, address mental health concerns and take preventative measures to prevent certain illnesses.
These benefits are in addition to basic benefits such as medical, dental, vision, life insurance and disability insurance, Priebe said.
John Norris, co-owner of Atscott Manufacturing and Tower Solutions in Pine City, Minn., added wellness options in its 63-employee machine shop. It is essential to benefit from extensive benefits.
“It’s about hiring. To be competitive, we have to have competitive benefits,” Norris said. “All of these things employees expect no matter where they are, and especially if they’re a skilled employee. Because they can go anywhere.”
Don’t let sticker shock stop you. Employees still need to evaluate which benefits are worth cost-sharing with employers. Expect group medical premiums to increase by an average of 5.4% at large employers and up to 7.3% at small businesses this year, according to benefits management company Mercer.
These increases are greater than the 3.2% jump seen last year. But individual employee spending (which reached $15,013 last year) will differ in 2024 depending on how employers share the burden of rising prices.
“The affordability issue is twofold,” said Tracy Watts, Mercer’s U.S. health policy manager.
“Employers will struggle to absorb higher costs going forward, but they also know that some people will forgo important care when they feel they can’t afford it,” she said. “Particularly with inflation putting additional pressure on household finances, fiscal concerns must be weighed against the downstream implications of healthcare affordability. The focus is therefore now on strategies aimed at curbing the growth of costs without passing them on to employees.”
If you are an employee and are shocked by the sticker when you open your benefits package, start the evaluation process by reviewing your current pay stub to understand what you are currently paying and compare it with the 2024 costs, said SHRM’s Saint-Martin.
Also evaluate how you use health care, she said.
“Employees should look beyond their employee contributions when comparing plans,” St. Martin said. “A plan with lower premiums may have a much higher deductible than a plan with higher premiums. Employees are wise to consider several factors such as premiums, deductibles and coinsurance when comparing plans .”
Many employers hold benefits fairs or informational meetings with insurer representatives to help workers make choices and ask questions. Or call your HR representatives or the 800 number on the back of the medical card to ask for clarification.
Evaluate if you need it. Watch your pennies when choosing to pay for extras.
“We often see customers choosing too many benefits that they don’t need or not choosing benefits that they really should consider,” said Tuttle at Ameriprise.
For example, some workplaces offer clients both life insurance and the option to purchase additional policies such as accidental death and dismemberment (AD&D) insurance.
But AD&D policies only pay in “very limited” circumstances and are not medical insurance, she said. “So don’t pay twice for something if it doesn’t really give you any real added benefit.”
One thing not to overlook, however, is the 401(K), said Joe Stepanek, wealth advisor at Thrivent, especially if employers match contributions.
“It’s free money,” he said.