Maximize Your Benefits: 3 Key Steps During Open Enrollment

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It's open enrollment season at work. Here are some essential items to check off your list.

The employer benefits you sign up for through your company can change from year to year. That's why employees are generally given the chance to select their benefits each fall, ahead of the new year, during their companies' open enrollment periods.

If you're deep in the throes of open enrollment, it's important to review your options carefully. Here are a few moves worth making to set yourself up for 2022.

1. Sign up for the right health insurance

Some companies offer employees a single health insurance plan, while others offer multiple options. You'll need to weigh your choices carefully to land on the right coverage.

Some insurance plans are known as high-deductible plans, which means you'll have to pay more money out of pocket before your insurance starts covering your healthcare services. In exchange, you might reap two benefits.

First, your premiums (the monthly fee you pay to have insurance) may be less costly, since high-deductible plans tend to charge lower premiums. Secondly, enrolling in a high-deductible insurance plan could make it so you're able to participate in a health savings account, or HSA.

HSAs are similar to FSAs, only they offer far more benefits. With an FSA, you must use your money within your plan year or risk forfeiting it. In contrast, HSA funds never expire, and any money you're not using can be invested so it grows into a larger sum. Any investment gains in an HSA are yours to enjoy tax-free, whereas gains in a regular brokerage account are taxable. And withdrawals are tax-free as long as they're used for qualified medical expenses.

HSAs are only open to those enrolled in a high-deductible health insurance plan. As you review your plan choices, you should be able to see which plans are HSA-compatible.

2. Sign up for an FSA

A flexible spending account, or FSA, lets you set aside pre-tax dollars to pay for healthcare and childcare expenses, like daycare or summer camp. Since FSA funds do expire, you'll need to make sure not to overfund your account. You can put in up to $2,750 for healthcare and up to $5,000 for dependent care.

Unlike HSAs, you can participate in an FSA regardless of the health insurance plan you have. And you can allocate money to dependent care as long as you need childcare to work or look for work.

3. Sign up for pet insurance

Many people adopted pets during the pandemic. If you went a similar route but don't have insurance, you could risk exorbitant bills if your pet ends up needing surgery or treatment for a severe illness. That's why it pays to look at getting pet insurance, and some companies offer this benefit to employees. It's very unusual for employers to fully cover the cost of pet insurance, but you may be eligible for a subsidized plan through your company.

Taking advantage of your employer benefits could result in big savings for 2022. It pays to check these moves off your list in the coming weeks. Just as importantly, be sure to pay attention to your company's benefits sign-up deadline. The last thing you want to do is miss the boat and lose out on the chance to enroll.

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