Open Enrollment: 3 Tips To Maximize Your Benefits

Tip 1 –  Should you enroll in life insurance?

Most likely, you are already getting basic life insurance coverage courtesy of your employer. Typically, it’s one times your salary. So if you make $100,000, then your employer is probably already giving you $100,000 dollars in basic life insurance coverage. Even if you do have a basic life insurance policy, it might not be enough to protect young children or other dependents. If this is the case, you may need supplemental life insurance.

• Should you then enroll in supplemental life insurance? 

It really depends on your situation. If you’re single, or if your spouse is working, and you don’t have any dependents, you may not necessarily need to enroll in supplemental life insurance coverage. If you have a dependent, a child, or a non-working spouse, then you may want to consider getting one.

If you’re a federal employee and have a dependent, you also have the option to get supplemental life insurance through the government called FEGLI (the federal life insurance government plan). However, getting FEGLI may not necessarily be in your best interest. Typically, if you choose the FEGLI, your premiums will increase as you age, whereas if you get term life insurance in the marketplace, let’s say a 20 or 30-year term life insurance, then your premiums will be level. Make sure you consider the premiums before you choose which option is best for you.

Tip 2 – Should you get disability insurance?

A lot of people overlook disability insurance, but it’s very important. According to the Social Security Administration, one in three Americans between ages 35 and 65 will become disabled for more than 90 days. So it’s definitely worth considering. 

• What is disability insurance?

  Disability insurance replaces a portion of your paycheck if you get sick or injured and are unable to work.

   

• What are the two types of disability insurance?

  There are two types of disability insurance: short-term disability and long-term disability insurance. 

  Short-term disability insurance covers you immediately when you are unable to work for a short period of time due to hospitalization, an accident, or becoming ill. It typically covers you for 3-6 months depending on your plan. This is beneficial for women who plan to have a child because you can get money after you give birth through your short-term disability policy. Usually, it gives you around 50% to 60% of your income for up to six weeks if you have short-term disability insurance coverage. There is a cap, though, so keep that in mind.

  Long-term disability insurance covers your income if you are unable to work long-term due to an illness or injury. It is intended to provide benefits for a longer period of time, which can be 5-10 years or even until retirement.  If you want to know more about long-term disability insurance and why you might want to get coverage, check out our “Three Types of Insurance You’re Forgetting” blog.  

   

• Can you get short-term disability insurance if you’re already pregnant?

  Unfortunately, the answer is no, you cannot get short-term disability if you are already pregnant. We were having a discussion with one of our clients about this the other day. Most carriers consider this as a pre-existing condition, so you might not get covered if you sign up when you are already pregnant.

   

Tip 3 –  What health insurance plan is best? 

It can be very overwhelming to choose a health insurance plan. There are several factors to consider such as whether should you enroll in your health insurance plan through your company, or should you sign up for your spouse’s health insurance company? It’s often best to work with a credentialed financial advisor to help you choose the best insurance plan for your medical needs for your household.

What does a health insurance plan cover?

Under the Affordable Care Act, health care plans must provide at least these essential benefits:

• Outpatient care, including chronic disease management
• Emergency care
• Hospitalization
• Pregnancy and newborn care
• Mental health and substance abuse services
• Prescription drugs
• Rehabilitation services and devices
• Lab tests
• Preventive and wellness services
• Dental and vision care for children

   

What information will I need to enroll in a health care plan?

If you go to Healthcare.gov, there is a list of everything that you need. The general documents include: 

• Proof of income. This includes a 1040 federal or state tax return, wages and tax statement (such as a W-2 or 1099), a pay stub (if you have one), or self-employment ledger documentation (such as a Schedule C). 
• Immigration information. This includes your green card, a re-entry permit, a refugee travel document, or an employment authorization card.
• Citizenship. This includes your U.S. passport, a state-issued enhanced driver’s license, or a birth certificate. 
• Documents pertaining to adoption. If you have adopted or have a foster child and want them on your health plan, then you will need to show proof that you are the parent/legal guardian. You’ll need to provide an adoption letter, record, or foster care papers.

   

Do I have to get health insurance?

This depends on the state. You are no longer penalized at tax time for not having health insurance, however, a handful of states have mandates. If you live in one of these states then you may be fined at tax time if you don’t have health insurance.

The states with health insurance mandates include: 

• California
• District of Columbia
• Massachusetts
• New Jersey
• Rhode Island
• Vermont
  
  

Should you get an HMO or a PPO plan? 

An HMO (Health Maintenance Organization)  generally only gives you access to certain doctors and hospitals within its own network and generally costs less than a PPO.  A PPO (Preferred Provider Organization) provides more flexibility when picking a doctor or hospital. The differences between plans include the network size, ability to see specialists, costs, and out-of-network coverage. When you are choosing between an HMO or PPO plan, it’s not necessarily about which one is better, but which one is best for you and your situation. 

Should you consider a gold or silver or bronze plan?

• Bronze plans: have the cheapest monthly costs but they generally have high deductibles or fewer cost-sharing benefits. Bronze plans are usually best for people who are young and healthy or don’t expect to need significant medical care. Given that bronze plans have high deductibles, you will need to have a good amount of emergency funds in place to cover potential medical expenses.
• Silver plans: these plans balance coverage with monthly costs. Silver plans are usually best for most people including those who expect to have typical medical needs.
• Gold plans: these plans are expensive but they have strong cost-sharing benefits and low deductibles. Gold plans are best for people who expect to need significant medical care.