Smart enrollment decisions for 2020

By: Kimberly Lankford

Most people focus on health insurance during open enrollment each fall, but your employer may offer other valuable benefits, too. Here’s how to assess your options and make the most of these additional perks.

Health savings account (HSA). If you have an eligible health insurance policy with a deductible of at least $1,400 for single coverage or $2,800 for family coverage in 2020, you can contribute to an HSA. An HSA can give you a triple tax break — your contributions are pre-tax, the money grows tax-deferred, and can be used tax-free for medical expenses in any year. You can contribute up to $3,550 in 2020 if you have single coverage, or up to $7,100 if you have family coverage (plus an extra $1,000 if you’re 55 or older). Many employers also add some money to the accounts — large employers surveyed by the National Business Group on Health contributed an average of $632 to employees’ HSAs in 2019. For more information, see Six strategies to make the most of a Health Savings Account.

Health-care flexible-spending account. If you don’t have a high-deductible health insurance policy, your employer may offer a flexible-spending account. An FSA lets you set aside pre-tax money for out-of-pocket medical expenses (the limit is $2,700 in 2019). Money in the FSA usually must be used by the end of the year, but some plans let you carry over $500 from one year to the next or give you until March 15 to spend the money. You usually can’t have both a health-care FSA and an HSA unless you have a “limited-purpose FSA” that only covers certain expenses, such as vision and dental costs.

Flexible-spending account for dependent care. If you have children under age 13 and pay for childcare while you and your spouse work (or if one spouse works and the other is a full-time student), then you can set aside up to $5,000 pre-tax in a dependent-care FSA. You can use the money tax-free for childcare expenses, including the cost of daycare or a babysitter, preschool (before kindergarten), before-school and after-school programs, and even summer day camp. The $5,000 is the maximum for the household, even if both spouses have a dependent-care FSA at work.

Life insurance. Your employer may automatically provide some life insurance to all employees — one or two times employees’ annual income is common — and you may be able to buy additional coverage during open enrollment. Compare the premiums and policy term to buying the insurance on your own. Also find out what happens to the coverage if you leave your job. See Life insurance check-ups for every life stage for more information.

Disability insurance. You may already have some disability insurance through work, but your employer may give you an opportunity to buy additional coverage. You may be able to increase the percentage of income your current disability insurance covers for a small fee, or you may be able to get an individual disability insurance policy through your employer at a discount, which you can keep even if you change jobs. Calculate how much of your income and expenses your current policy covers and whether you need to get extra insurance to fill in the gaps. See The basics of disability insurance and Picking the right disability insurance policy for more information.

Long-term care insurance. Some employers offer long-term care insurance at group rates during open enrollment. These policies may have more lenient medical underwriting than individual long-term care policies. If you have health issues, this could be a good opportunity to get coverage, but if you’re healthy, you may find a better deal on your own. Compare the cost and coverage to buying your own policy.

Find out about other benefits. Some employers offer a variety of other employee benefits during open enrollment, such as dental and vision insurance, discounts on pet insurance, wellness benefits (free gym memberships or extra HSA contributions for participating in a wellness program), access to a financial wellness program, and pre-tax transportation benefits for parking or mass transit.

You will also make important decisions about your health insurance during open enrollment. See What to expect from your employer’s health insurance for 2020 for tips on picking a health insurance policy for the year.

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Saturday Insurance Services, LLC (“Saturday” or “Saturday Insurance”) is a licensed, digital insurance advisor. All tools, quotes, and information provided by Saturday are for educational purposes only and based on the limited information, if any, provided by you. We urge you to consult with your financial and tax advisors before making any purchase decisions. All quotes and estimates are non-binding and are not to be construed as a guarantee you will be able to purchase insurance. Availability of insurance and final pricing is determined solely by our insurer partners and subject to their review and acceptance of a completed application. All product guarantees are subject to the claims-paying ability of your insurer.