For most companies, the 4th quarter of the year is an important time for registering for benefits.  According to the Bureau of Labor Statistics' June data, benefits comprise 30% of a civilian employee’s total compensation.  The remaining 70% were wages.  For state and local government workers, benefits represented 31%.  So, when you enroll in your benefits in the 4th quarter, make sure you’re making thoughtful decisions about what you’re selecting and, if appropriate, consult your advisor. 

When reviewing your benefits for the upcoming year, consider which benefit options have changed and which have remained the same.  If you have questions about the plan, contact your benefits team/coordinator.  Just because you chose one benefit option for the current year doesn’t necessarily mean having the same benefit the following year makes sense.  For example, if you have a group legal plan, you may have the option to enroll for one year to have a Will or Trust completed and then unenroll the following year.

Let’s walk through some popular benefits options you will likely have to choose from.

Health Insurance

This is probably the most significant selection in your benefits (unless you have an employer that covers all employees and their family's medical premiums).  You will want to evaluate the options carefully.  Some popular plans are a Health Maintenance Organization, or HMO, and a PPO, or Preferred Provider Organization.  Here’s a site comparing the two. 

At a high level, Health Maintenance Organizations (HMOs) have a network of doctors, hospitals, and other healthcare providers who offer their services for a specific payment, allowing the HMO to control costs for its members. A referral is required.  Cost and choice are the two features that set HMOs apart from other healthcare plans. 

Preferred provider organizations (PPOs) offer a network of healthcare providers for your medical care at a specific rate. Unlike HMO, a PPO allows you to receive care from any healthcare provider, in or out of your network.

Health Savings Accounts (HSA) are available with a high-deductible health plan (HDHP), and the linked article can talk through the basics for you.

Flexible Spending Accounts (FSA) are a great option if you don’t have an HDHP.  Be sure to use the funds:

• by the end of the “grace period,” typically 2.5 months following the end of the plan year or

• pend your account below the annual carryover amount, which is $640 for 2024, and likely to

Health Equity offers a vast list of Qualified Medical Expenses (QME) that you can use to ensure you spend any remaining dollars.

Dental Insurance

These plans vary quite a bit by employer.  Below is what a typical plan covers. 

• 100% of routine preventive and diagnostic care, such as cleanings and exams.

• 80% of basic procedures, such as fillings, root canals, and tooth extractions.

• 50% of primary services such as crowns, bridges, and implants.

If you need orthodontic/denture work done, asking your dentist for a couple of referrals can help you understand different providers in your area and compare services and prices.  These expenses can be hundreds to thousands of dollars.  For any dental/orthodontic work your plan doesn’t cover, you should discuss with your advisor a plan of how to cover these expenses with your pre-tax Flexible Spending Account (FSA) or Health Savings Account (HSA).

Vision Insurance

If you carry vision insurance and your plan offers a glasses/contacts allowance, ensure you maximize it yearly.  If you don’t need new glasses or contacts, you will want to understand what your vision covers to see if it’s necessary to keep every year.

Short- and Long-Term Disability 

Your employer can sometimes pay for these.  If your company pays for it, great, let your advisor know.  You should also inform your advisor if they don’t pay for it.  We generally don’t recommend short-term disability unless it’s free/very cheap, but here’s an article discussing Long Term Disability Insurance and why it’s a good idea.

Life Insurance

Life insurance purchased through work is generally Group Term Insurance, similar to Term Insurance you would buy individually.  We recommend purchasing it outside of your employer because if you get sick and have to leave, as it’s not transferable.  Here’s an article that gives further insight into Term Life Insurance.

Dependent Care Flexible Spending Account

Dependent Care Flexible Spending or DCFSA accounts can be a great way for employees to save on taxes when paying for care for children under 13, a disabled spouse, or an older parent in Eldercare.  If this is you, visit this site here to learn more.

Legal Plan

If your company offers a legal services plan and can complete a Will/Trust, this could be a great way to set one up for a large discount, as doing so normally requires an estate planning attorney.  You could enroll for the benefit for one year and then not the next.  You should clarify what services the group legal plan covers and whether a Will/Trust is included.  If you’ve been putting it off like most Americans, talk to your Financial Advisor today about establishing one through one of our partners.

Employer-Sponsored Retirement Plan

Whether you have a 401(k), 403(b), 457(b), or a small business retirement plan, you should have the details on the features of your plan.  It may even require your advisor to review your Summary Plan Description (SPD) or call the plan custodian (the company that manages the investments) to obtain the SPD to understand the features.  If you need help managing your employer’s retirement plan, you should talk to your advisor because at Whitaker-Myers Wealth Managers, we are uniquely qualified to help you manage your current 401(k) or another employer plan.

You’re generally always able to change the amount contributed to your plan, whether at a $ or % level.  Most employers allow you to choose a separate contribution amount if you receive any bonus compensation. 

Be careful not to max out your 401(k) early because it could cost you the employer match if there’s no true-up provision for the plan.  If you’ve left your employer, you should notify your advisor to discuss your 401(k) options.  These are all reasons why you should consult your retirement contribution strategy with your financial advisor.

Tuition Reimbursement & Professional Development

Many companies offer a benefit to partially or fully pay for you to obtain further education, whether a degree through a school, a certification program, or just a professional development course.  Investing in yourself in this way could be a better return on investment than any mutual fund could ever return, so be sure you know what benefits your employer offers.

Long Term Care

Long-term care is not as commonly offered by employers, but the linked article can provide some good considerations for funding options.

Parking/Commuter Benefits

If you have to pay for public transportation or parking, hopefully, your employer offers commuter benefits.  This is a way to save up to the IRS 2023 limit of $300 per month for expenses.  Even if you work primarily from home and only go into the office a few days a week, this is another excellent way to save on taxes.  Here’s a site to check out if you have more questions.

The benefit of talking with a financial advisor

This is not a complete list of benefits employers offer, but it is most of the major ones.  As you build out your financial plan, you should discuss how to best leverage your company’s benefits with your advisor, given that it’s around a 1/3 of most employees’ total compensation. If you don't have a financial advisor, one of our trusted team members would be happy to set up a complimentary meeting to discuss your needs and address any questions you may have.