The following is a staff writer post from MikeS. He is a married father of 2. So, with the cat, he ranks number 5 in the house. He loves numbers and helping people. Please leave any questions or comments below for either Mike or Crystal.
Once again, open-enrollment time has arrived for me. This year’s enrollment has been relatively uneventful. There were no major changes to the benefits that I currently have and no large changes in cost either. The one change that had been introduced, the 401k change, was reversed. All in all it was fairly uneventful. I will walk through my thoughts and selections in case it might help you in the future.
This has been the area that has seen the biggest changes over the past several years. The coverage that I have elected has come down in price over the past few years. The trade-off I have made is that I am taking on more risk. This is a trade-off I have been willing to make as a result of more stability in my financial situation. This year brought no major changes to the health coverage and only a minimal change in cost. The premium went up something like $7 or $8 a month, something that won’t even cause me to adjust my budget. The only other health related benefit change is that I will be allowed to increase my HSA contribution by $100. The IRS limit is increasing next year, so I want to take full advantage of the increased limit.
My Other Benefits
The other benefits I elect are pretty standard: dental, vision and long-term disability. I have two choices for the dental plan and I selected the lowest cost option. It has reduced coverage for any dental work except for cleaning and x-rays, which are covered at 100%. I have become much better at maintaining what teeth I have left, so this seemed like the most prudent option. The vision coverage is just for the wife and me, with her needing it more than I. It covers an annual eye exam and a set amount for either contacts or glasses. Long-term disability covers 60% of my salary and is in addition to the individual policy that I carry on myself. The costs for these coverages were virtually unchanged from last year, which is always nice.
Coverages Not Taken
This year the employees were offered additional voluntary benefits. The two new benefits were Critical Illness and Accident. I did not elect to purchase either. Critical Illness is coverage that pays a set amount if you are diagnosed with a covered illness. In my case, I could have elected to be covered at $10,000 or $20,000. With the coverage, you can use the payment for whatever you need. I felt my cash reserves were adequate enough that this would have been redundant coverage. Sure, receiving a lump sum of $10,000 or $20,000 would be nice, but the likelihood of needing the coverage is small and my paycheck only goes so far.
The second coverage was Accidental Insurance and again pays a certain amount for covered events. The insurance would pay for example if you broke a bone, went to the emergency room or need physical therapy. The benefit can range from $200 up to $15,000 depending upon the covered accident. Again, same as with the Critical Illness coverage, the benefit can be used for any purpose. My reasoning for not electing this coverage was the same as the Critical Illness. I feel at this point my cash reserves are strong enough to absorb a hit. In my reading of the coverages for both benefits, they struck me as appropriate for those that haven’t built up their emergency fund. A few years ago, I broke my ankle the financial impact was significant. My final out of pocket was around $1,000. The Accident Insurance would have come in handy back then as my emergency fund was not up to the hit.
Open-Enrollment always forces me to evaluate my situation and determine if certain things are still appropriate. I have been finding over the last few years that I have been gradually reducing the insurance coverage I purchase through my benefits. That is a direct result of the hard work that has been done to stabilize my financial position. As my net worth has increased, the need for the lower level coverages has diminished. I am truly heading towards having insurance for those events that don’t happen very often, but if they did would be financially devastating.
Did you have any changes to your benefits for the upcoming year?