8 questions to ask your employer during open enrollment season

Ashley Abramson

Nov 15, 2019, 01:24 IST

8 questions to ask your employer during open enrollment season

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If you have employer-sponsored benefits, there's typically a period each year when you can make changes to your benefit elections, including your health and life insurance.
Certified financial planner Tom Canale says you should talk to your boss or HR department during open enrollment season and group your questions into three categories: protect, optimize, and grow.
Find out what health and life insurance benefits are available or have changed, what kind of tax-advantaged benefits are offered, and how to maximize your retirement savings.
Want to talk to a financial planner before making benefit selections? SmartAsset can help you find a qualified professional in your area »

If you have benefits through your employer, there's usually one time of year - open enrollment season - when you can make changes to your health insurance plan, life insurance, and other benefit deductions. For many companies, open enrollment runs sometime between November 1 and December 15.

Since the window for adding, dropping, or amending your benefits might only come around once annually, it's important to know as much as possible about your options ahead of time.

Take some time to ask your supervisor or human resources department any questions you might have about the benefits available to you so you can make the best decision for yourself and your family.

Tom Canale, certified financial planner and wealth management advisor at Canale Financial Group in Rosemont, Illinois, typically coaches his clients to organize their questions into three categories: protect, optimize, and grow.

PROTECT: Health and life insurance benefits

Ask: What programs or benefits are available to protect me?

The foundational step, Canale says, is to learn more about the health and life insurance benefits your company offers.

"Protecting yourself first is important because it will allow you to address the 'what ifs' that could financially crush you," he says.

A financial planner could help you make smarter choices during open enrollment season. Use SmartAsset's free tool to find a qualified professional »

To ensure you will be financially secure in the event of an unforeseen death, emergency, or health event, ask your employer about the health and life insurance options available to you as an employee.

Ask: What programs and benefits are available to protect my family?

If you have a family, learn about what you can to do cover them next. To ensure you and your family members will be financially secure in the event of an unforeseen death, emergency, or health event, ask your employer about the health and life insurance options available to cover dependents.

Once you understand your options and their costs, you can choose the level of protection that makes the most sense for you and your family.

OPTIMIZE: Tax benefits

Once you know you and your loved ones are covered, Canale recommends focusing on benefits that optimize your cash flow.

Many employers offer tax-advantaged health accounts that could both save you money on healthcare and reduce your taxable income.

Ask: What tax-advantaged health benefits or programs do you offer?

Ask your employer if they offer an HSA (health savings account) or FSA (flexible spending account), and make sure you understand the terms for each.

For example, FSA funds can typically only be used for health expenses incurred that year ("use it or lose it"), while money in HSA accounts rolls over from year to year. Also, FSAs are typically a separate part of an employer's benefit package, while HSAs are offered to employees with high-deductible insurance.

Ask: Do you offer tax-advantaged childcare benefits?

Your employer may also offer a childcare FSA (also known as a dependent-care FSA, or DCFSA) with similar tax benefits. If you have any children in childcare, Canale recommends taking advantage of the maximum amount you'll use toward those expenses.

"Calculate how much you will spend on daycare, add that up for the year, and then look at the FSA allowable amount," he says. "If that amount is lower than what you will spend on daycare, maximize it. If it's higher, use what you will spend on daycare."

Ask: What I can use my HSA/FSA for?

Different tax-advantaged health accounts can be used for different things. For instance, because HSA accounts are for high-deductible plans, you can usually use that money to pay for your deductible and any qualified medical expenses (such as dental care) that aren't covered by your insurance.

FSAs, on the other hand, can usually be used diversely for co-pays, prescriptions, and other out-of-pocket medical expenses.

GROW: Retirement and college savings accounts

Once you optimize cash flow by saving money on taxes, you can home in on growing your net worth with your company's retirement plan. Most companies offer some kind of retirement savings program, but every plan is different, so make sure you know what's available to you.

Note that you may be able to make adjustments to your retirement accounts throughout the year, but open enrollment is a good time to review since you may be adjusting your healthcare costs or other spending.

Ask: Does the company match employee retirement contributions?

Some employers will match employees' retirement contributions up to a certain percent. If there is a match program in place, Canale urges employees to take advantage of it, since it's essentially free money toward your future.

Ask: Does the company offer more than one type of retirement plan?

If your company has more than one option, you'll also want to think about the type of account in which you invest your retirement savings.

Do they offer a Roth 401(k) in addition to a regular 401(k)? Think about how you want to save for your future. For example, investing in a regular 401(k) allows you to deduct from your taxes each year. A Roth 401(k), on the other hand, is an after-tax deposit - but it also grows tax-free.

Canale says he often encourages clients to diversify their retirement savings. "You may not want all your eggs in one basket," he says. "For example, when you retire, it might be nice to have some money in a Roth so you can withdraw it without a tax penalty."