October Means Open Enrollment

Put on the coffee and roll up your sleeves! Deciding on employer benefit choices can be a daunting task, especially when the plans change from year-to-year. And continue to change they will! The Affordable Care Act signed last year phases in a variety of regulations over the next eight years, if it remains standing after the 2012 elections.

Next year, the value of your group health insurance will appear on your W-2 form, although it is not taxable income.

Compared to last year, you will likely find your premiums, co-pays and deductibles higher, with some lower health care benefits. You may also see “family” coverage replaced with “individual plus dependent(s),” now that children under the age of 26 can be covered by a parent’s employer plan or through COBRA coverage. Individual policies for young people in their twenties may be cheaper than your employer’s dependent coverage. Comparative quotes for individual are available at www.eHealthInsurance.com or through an agent.  Before making any changes, be sure to read the fine print concerning pre-existing conditions, dependent eligibility and geographic areas covered.

If both spouses work, it may take you several hours to compare networks, expected premiums, co-pays and total out-of-pocket costs before deciding which employer health insurance is the better alternative.

Older adults with pre-existing conditions can now access high-risk pool policies. Contact your state insurance department via www.naic.org for more information.

For retirees, a well-written explanation of the Medicare enrollment changes was posted by Joe Pitzl, CFP® on September 15, 2011.

Want to lower your health care costs?  Kiplinger has thirty tips that can save you substantial bucks.

One of the most important and often overlooked or misunderstood employer benefits is long-term disability insurance. Its significance is highlighted because earnings are usually your greatest resource. If you became disabled, long-term disability would pay a portion of your regular earnings. Most group policies cover you for your own (current) occupation for two years, and then any occupation thereafter (usually making the coverage inapplicable). If your employer pays the premiums, the disability income is taxed, leaving you with a smaller amount of your former income. It’s important to take time to read and understand what is covered, for how long and under what circumstances. Most advisors also recommend supplementing your employer group plan with privately owned disability insurance. It is portable in the event that you change jobs and the benefits are exempt from tax.

Life insurance is usually offered by employer group plans in multiples of your base wages. Group term is often, but not always the least expensive alternative. Life insurance is primarily intended to replace your lost earnings for a period of time that others will depend on you in the future. If you are single, you may not need life insurance. If you are married, you may choose to cover yourself, your spouse and dependent children. Again, owning your own policy to supplement your employer group term may be advisable.