Open Enrollment Considerations

With open enrollment for employee benefits about to begin for most people, we want to share our top considerations for elections.  This is not an exhaustive list and, as always, no situation is clear cut. Please reach out directly with any questions for your situation.

Prioritize:

Consider long-term disability if available.   Some companies also offer a “buy-up” option to increase your benefit by paying a little more each paycheck. We’d suggest opting for this, if available, as most disability benefits won’t replace your full paycheck should you need it.

Don’t waste money:

Consider the restrictions of Accidental Death & Dismemberment.  Sure, the low cost seems appealing, but this type of coverage comes with many restrictions. While this may be right for you, you’ll want to ensure you’re aware of the restrictions that may cause it to noy pay out.  If you’re looking for life insurance coverage, make sure to consider other options as well like traditional group life options or consider personally owned coverage like term insurance

Prioritize:

Enroll in your company sponsored retirement plan. If you’re already enrolled and are not contributing the maximum amount, consider a 1% increase in your contribution.

Reduce redundant costs:

Some 401(k)’s offer professional management options for an extra fee. Instead, most plans offer “target date funds” that are invested based on your retirement time horizon or risk-based options invested based on an objective like aggressive, conservative etc.  Both options offer lower costs while still providing you with professionally allocated strategies so you don’t have to worry about keeping up with your plan as much (unless you like to, of course). You can also utilize our team at Three Corners Capital for help considering an appropriate allocation based on your risk profile and planning goals.

Take advantage of discounts:

Opt in for your employer stock purchase plan if one exists. Assuming you have extra cash flow and like the future growth prospects of the company you’re working for, this is an attractive way to buy company stock at a discount.

Avoid unnecessary coverages :

Elections like “cancer insurance” sound worthwhile.  Yes, cancer in various forms is, unfortunately, common. Yes, these policies pay a direct benefit to people who qualify. However, these policies do not replace health insurance. These policies also come with exclusions based on many factors such as type of cancer and pre-existing conditions etc.  In the spirit of avoiding paying too much in insurance premiums, we would instead encourage focusing on adequate health insurance coverage and building an emergency fund.  Additionally, depending on how cancer (in this example) impacts your ability to work, a long-term disability insurance policy could pay benefits.

Take advantage of helpful benefits:

Elect legal services if available. Over the years, we have found legal benefits to be helpful when clients have needed to engage legal services – especially estate planning.  The downside is sometime the attorney’s we have worked closely with over the years are not in the referral network for the program.