Home >> Learning Center >> Resource Center >> October 2006

Pinnacle Resource Center

Navigating open enrollment
By Susan McIndoo, Insurance Advisor for Miller & Loughry Insurance and Services, Inc.

Every year as the changing leaves begin to mark the new season, another season is at hand - open enrollment season for employee benefits. For employees whose companies offer insurance and other benefits, there are a number of important choices to make.

And with many employers trying to contain health costs by paring their contributions to employee health coverage, there is a good chance your benefit options are changing and costing more. That's why it's more important than ever to carefully consider your options.

Yet many people are so confused they do nothing. According to a study by human resources firm Hewitt Associates, only about 30 percent of employees opted to change their benefits last year.

The good news is that evaluating your enrollment choices offers a great opportunity to stretch your dollars further. Here are a few tips to help:

• Start early. Read the materials explaining your benefit choices and give yourself enough time to weigh the options. Change is in the air, especially on retirement accounts, following passage of the Pension Protection Act earlier this year.
• Evaluate last year's choices. Keep an eye on services you paid for but didn't use much. Evaluate which benefits were most valuable to you.
• Project how much and what type of coverage you'll need for the coming year. Also weigh which aspects of coverage are most important to you. Do you have a child who will need orthodontia? Are you or your spouse having a baby? Are most of your medical costs spent on prescriptions? The answer to these and other questions will help you determine how to spend your premium dollars.
• If offered, consider a flexible spending account (FSA) or health savings account (HSA) as a way to pay for health-related expenses on a pretax basis. Employees are paying $1,489 on average this year for co-payments, deductibles and other out-of-pocket costs. That's projected to hit $1,627 in 2007. By using a pre-tax payroll deduction to cover such costs, you can benefit from a reduced taxable income at tax time.
• Use this as a time to explore other insurance options, such as life and disability coverage and long-term care protection.
• Save more for retirement. At a minimum, contribute enough to your 401(k) to take full advantage of employer matching funds.

Most importantly, ask questions. Be sure to attend meetings and pipe up if you aren't clear on something.

Don't forget to find out what will happen if you do nothing. Some employers default you to your previous year's selections. Others automatically enroll you in a general default plan that may or may not meet your needs.

For more information on health insurance in general, visit http://www.ahrq.gov/consumer/insuranc.htm, the consumer health plan site of the Federal Agency for Healthcare Research and Quality.

Susan McIndoo is an insurance advisor for Miller & Loughry Insurance and Services, Pinnacle's insurance arm. She can be reached at (615) 896-9292 or by e-mail susan.mcindoo@millerloughry.com.

Return to the Resource Center Home Page