Divorce and Open Enrollment: What You Need to Know
You might already be familiar with open enrollment, but let's take a moment to talk about what it really means in the context of divorce and life changes since those things will make an impact on how you select insurance plans during this period!
While the timing of open enrollment can vary with different employers, open enrollment is generally the period between November and mid-December when you are able to make changes to your health insurance plans. During this period, you can choose to renew your participation in your company's current insurance plans, switch to a different one, or drop your existing plan.
Because of the flexibility in choosing next year's coverage, this is an excellent time to take a step back and look at where your employee benefits fit into everything else you're doing. There could be connections you're missing or not aware of that may save you money (or cost you big over the following year. Here are a few things to note when looking at options available to you during open enrollment.
Evaluate Life Changes
A lot of times, people will check off what they did the year before. They think, "I already made this decision once before, I'll just stick with that choice." This is especially true if just thinking about comparing plans and trying to discern the minute differences between the options again makes you break out in hives. It's like, "This headache again?? What I have is fine, I'll just re-enroll and be done with it."
Not so fast! If you're going through a divorce, insurance plans you selected in the past may not be relevant, so you may need to make some considerations.
If you have children under the age of 18, part of the child support agreement will identify who is covering health insurance for your child or children. If your past plan included coverage for dependents, but your ex-spouse is handling health insurance now, clearly, you don't need all that additional coverage. Same goes in the other direction.
Some other life changes in addition to divorce that could make a difference in the plan you choose during open enrollment include births, deaths, and separation.
Open enrollment time is a good opportunity to revisit your beneficiaries on your accounts. For example: If you have group life insurance, you may still have your ex on that (and you don't need to any longer). Take a look and make sure everything is up to date and adjust as needed.
Take Time to Understand the Benefits (Including Taxes!) of The Plans You Select
Often, I see people missing opportunities with their Health Savings Accounts (HSA) or Flex Spending accounts. I get it… It's sometimes very hard to determine the differences between plans, so you pick the one with the lowest monthly premium and hope you don't have any major disasters. Then, add in all the additional tax benefits…. Forget it!
The reality is that it comes down to saving money on taxes and being tax-efficient, especially with HSAs, though this is true for all insurance plans and premiums available to you.
For example, HSAs really benefit people who don't have high medical bills and who are also maxing out their retirement accounts. In that case, take advantage of your HSA and use it as another retirement savings vehicle.
Take the time to understand what's included in your plans, any tax credits or benefits you're eligible for, and options outside of your employer-provided plans, so you can get what you need and actually use everything you're paying for!
Don't Forget the Cardinal Rules for Evaluating Choices During Open Enrollment
Things will vary between employers, plans, and families. As such, it isn't very cut and dry, but there are a few cardinal rules to note when it comes to open enrollment.
If your employer has one, use the calculator available to you to help you find a plan that takes into consideration the things you'd like to cover, the money you'd like to contribute, and so forth.
For health insurance specifically, don't look at the premiums. Instead, consider any ongoing medical expenses you have and compare the cost of that care. If you know you see a specialist on a regular basis, or you have prescriptions, note the cost of the actual treatment (or any co-pay or co-insurance costs) and compare what you expect your medical expenses to be across the plans to help you choose.
At the end of the day, it isn't the same choice for everyone, and it sometimes isn't super clear. To make sure you're getting the biggest benefit, tax savings, and coverage that you and your family actually need, talk to a trained consultant who can guide you through the process. In my Clarity Calls, I'll sit down with you to discuss your needs, your options, and your budget so you can select a plan that makes the most sense for you!
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