Open Enrollment Decisions

October 20, 2023  | By David Lowe

Early fall is open enrollment season for employer-provided benefits, as well as for Medicare. Open enrollment is a crucial time to review – and possibly update – your selections for health insurance, life insurance, disability insurance and more.

Which open enrollment timeline applies to you?

• W-2 employees: Typically runs from mid-October to the end of November. 
• Self-Employed: Using the health insurance marketplace, open enrollment begins November 1, 2023 and runs through January 15, 2023.
• Medicare Enrollees: Open enrollment for existing Medicare enrollees starts October 15, 2023 and ends December 7, 2023.

Here are some important issues to consider with employer-provided benefits:

Health Insurance

• High-deductible v. low-deductible, high co-pay v. low co-pay.
• When making your decision, consider your expected doctor visits and other health care use, your cash flow and your emergency fund.
• Whether to add your spouse and/or dependents to your plan.
• Consider how much of the cost your employer will pay for you. Consider if providers or prescription coverage will change if your spouse and/or dependents switch to your plan.]
• Is an HSA right for you?
  • If so, review your investment allocation, and consider paying health expenses out of pocket to maximize the growth of this triple-tax-advantaged account.
  • Make sure to use your Flexible Spending Account benefits by the deadline. Except for limited amounts under a grace period, FSA money is “use-it-or-lose-it” and does not carry over into the next year.
  • Take advantage of employer contributions to Health Reimbursement Arrangements for positive health behaviors (i.e. logging your exercise, completing a physical).

Life Insurance

• Consider how much employer-provided life insurance you and/or your family members can obtain without evidence of insurability (meaning without having to go through medical underwriting).
• Many employers offer a certain amount of basic life insurance at no cost to the employee. For coverage beyond the basic amount, compare the cost of employer-provided insurance to what a private policy would cost (based on your age, sex and health status).
• Remember that employer-provided life insurance does not stay with you if you change jobs. Also, your employer could reduce benefits in the future. For those reasons, you may need private insurance as well as employer group insurance to provide the full protection your loved ones need.

Disability Insurance

• Be sure to enroll in any no-cost options your employer offers. Even modest coverage is better than nothing!
• Note the maximum coverage amounts available through your company and whether those amounts will fully protect your income stream if you are disabled.
• As with group life insurance, group disability insurance is not portable if you change jobs.
• Note the definition of disability. Group policies may use a modified own-occupation or any-occupation definition (less generous benefits than most private disability policies offer).
• Ensure you have enough of an emergency reserve to meet your needs during the “elimination period” — the waiting period before disability benefits start.
• Remember that disability benefits from employer-paid policies are taxable, whereas benefits are tax-free if you pay for the policy with your own funds. Factor taxes into the analysis when considering your income needs.

Other Benefits

• Consider whether you would benefit from fringe benefits your company offers. Those perks may include student loan assistance, travel benefits, parental leave, mental health support – or even pet insurance!

Medicare Open Enrollment

If you like your current Medicare plan, you don’t need to make any changes during open enrollment. Your current plan will continue.

If you are on Medicare and need to adjust your coverage, the Medicare Annual Enrollment Period (from now until December 7, 2023) is the time to act. Your changes will take effect January 1, 2024.

You may want to adjust your Medicare plan if:

• You are trying to reduce costs
• Your health has changed recently
• You need to see specialists or receive certain treatments not covered by your existing network
• You want to consolidate to a Medicare Advantage plan instead of having many different types of coverage (such as Part A, Part B, Medicare Supplement or Part D prescription drug coverage)
• Your insurance company has changed Medicare coverage within the past year – i.e. by limiting your network or changing which prescriptions are covered

Adjusting your Medicare coverage is a big decision, so start the process as soon as possible! This will help you take your time to make any changes.

Self-Employed

Business owners also have important choices to make about benefits at this time of year. 

Here are some common questions that many business owners ask:

• I am self-employed. What are my best options?
• What happens to my health insurance if I sell my business or retire?
• Am I over-insured? Under-insured?

Austin Wealth Management has developed relationships with professionals who specialize in group benefits. We can connect you to helpful resources for your company’s insurance needs.

Employer benefits, self-employed health insurance and Medicare come with a dizzying array of options. This can make decisions complex and potentially stressful — especially when you are busy and facing deadlines! If you need help evaluating your benefit options, please reach out. We are happy to help.