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October 13, 2001
Hewitt's Top 10 Tips for Benefits Enrollment
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"The best thing employees can do for themselves is to 'shop' for their benefits carefully, using the same type of decision-making process they use for other major purchases," said Hewitt consultant Wendy Rhodes. "By making the effort to use the tools available to them, employees will be better able to get the most out of their benefit plans, understand their many options and then make the right decision for their needs."
Hewitt estimates it will handle benefits enrollment for more than 2.5 million employees this year. The following are tips for employees as they begin the benefits enrollment process:
1. Take advantage of the tools available to you. Many organizations are expanding the array of enrollment tools available to employees. Along with traditional print summaries (often mailed to employees at home), many employees also have access to automated telephone enrollment lines, benefit call centers and online enrollment. These can be convenient services for those who are comfortable completing their enrollment online or over the phone.
Hewitt recommends the Internet as the best tool for education. It offers employees more convenience, greater flexibility and personalization, the ability to compare and contrast plan choices and, potentially, a richer experience than all other tools combined.
2. Be a smart shopper. In other words, do the research, which requires asking these questions: Are you choosing the right medical coverage for you and your family? What about income protection (disability, life insurance and long term care)?
Today, a multitude of resources are available to help you with your decisions including the Internet, hotlines, benefit fairs, printed material from your employer and customer service centers.
3. Re-think your health plan choices. With health care costs expected to continue to increase in the double-digits, this enrollment period provides an opportunity for you to re-evaluate your medical plan to make sure it meets your health care and financial needs. Last year, many employees experienced provider disruptions, with many doctors and hospitals withdrawing from and/or changing network participation.
This makes it especially important that you choose the right plan for your needs, regardless of whether or not your doctor participates. You should consider the following questions: Are you satisfied with your current medical and prescription drug plan? Are you satisfied with your current primary care physician (PCP) acting as your gatekeeper or would you prefer more flexibility? How financially stable is your health plan? Be sure to review those questions and decide if you need to make a change.
Quality and financial information is available for health plans by searching the Internet or contacting consumer health organizations. Also remember to assess your dental and vision plans' coverage as well.
4. Consider long-term care coverage, even if you're young. Long-term care coverage is intended to provide services and care, as opposed to income replacement, in the event of a serious injury or illness. Since most people are more likely to be disabled at a young age than die, this coverage is worth considering, even if you're young.
5. Take advantage of your health care spending account. Consider enrolling in a health care spending account, even if the tax savings won't be large. A spending account helps employees pay, in a tax-effective way, for predictable health expenses not covered by their medical plan. Examples of expenses that can be reimbursed through your health care spending account, include: prescription drugs, contact lenses and solutions, and deductibles and co-payments not covered by the health plan. Electing to contribute a portion of your before-tax income to a spending account can stretch money available for medical services and lower your taxable income at the same time.
6. Take advantage of your dependent care spending account, if appropriate. Some employers offer dependent care spending accounts, which help employees pay for child care and other dependent expenses in a tax-effective way. Employees make before-tax contributions to their dependent care account directly out of their paychecks. Dependent care spending accounts can only be used for day care expenses for children under 13 or disabled that allow both parents to work/attend school full-time. It can also be used for adult day care that allows the guardian to work. You may wish to contact a tax advisor to determine if a dependent care spending account is the best choice for you.
7. Assess your life insurance and disability protection needs. Most employers automatically provide life insurance benefits for their employees. However, the enrollment period is a good time to assess whether your circumstances call for additional life insurance, either through your employer's plan or another carrier. Questions to consider, include: What is your family situation? Would your personal savings provide adequate protection for your family if you die?
One thing to remember is that most people are more likely to be disabled at a young age than die. If you were disabled and couldn't work, think about how you would meet your expenses. Long-term disability protection can help you with your expenses after six months of disability. Also, be sure to review your beneficiary designations and make sure they are correct.
8. Contribute as much as possible to your 401(k) plan. Your 401(k) plan could very well be your main source of retirement income down the road, and the earlier you start contributing, the better off you'll be in the long run. Start now! Many companies make matching contributions to their employees' 401(k) plans. In order for you to reap the benefits of this "free money," figure out how much you need to contribute to get the maximum employer contribution. As you think about saving, keep a long-term view in mind. Your 401(k) savings are not about what's happening in the market today - but, rather, what happens in the market over the long haul.
9. Don't miss the deadline! When you receive your enrollment packet, pay attention to the deadline for submitting your enrollment choices. If you fail to enroll on time, you automatically could be assigned coverage that you may not want, and you won't be able to take advantage of a health care or a dependent care spending account. Plus, if you wait until the last minute to enroll, you won't be able to do your homework to get the most out of your benefits.
10. Keep a record of your enrollment and follow up. If you're enrolling through the Internet or an interactive voice response (IVR) system, make sure that you see or hear verification that you have successfully completed the enrollment process before logging off or hanging up. And, if you're enrolling online, you should print out your elections to keep for you records. No matter how you enroll, be sure to keep a copy of your enrollment elections in your personal files. There may be questions that arise during the year regarding your coverage and you will be glad that you have your enrollment records to refer to. If you haven't received an ID card or other confirmation by late January, follow up with your plan's member services department to ensure that you and any family members are enrolled.