If you’re like most people during open enrollment, you simply sign up for whatever you did the prior year without giving it much thought.  The next go around, consider reviewing your benefit options to ensure you are maximizing your benefits (and minimizing taxes!)

Medical Coverage

• This can be complicated, especially, when both spouses work, and you have children on your plan. 
• Most employers have an HMO/PPO option as well as a High Deductible Health Plan (HDHP) option with an HSA.
• Single: If you’re young and healthy, a HDHP is a great option because the cost is low and you can use the HSA as a savings vehicle for future medical expenses or even retirement. 
• Married: Review the health plan options and associated premiums, deductibles, co-insurance, out of pocket maximum, and any potential employer HSA contribution.  As opposed to being on separate plans, it might make more sense to use one vs the other even if there is a cost to add your spouse to the plan.  
• Married + children:  Same as the above, however, there is an extra layer complexity as you’ll want to review both family options, individual + spouse & children. It’s worth the time, however, as you can save quite a bit on your premiums.

401k/403b

• There is typically a match or employer contribution
• You can typically contribute pre or post-tax (traditional or Roth)
• The maximum contribution in 2020 is $19,500 plus an additional $6,000 if over 50 years old

Dependent Care FSA

• If you are single or married and both spouses work, you can put up to $5,000 pre-tax to pay for childcare expenses.
• Expenses are paid out of pocket and reimbursed from the account with proper documentation (ie receipt).

FSA

• A flexible spending account allows you to pay for medical expenses using pre-tax dollars. 
• FSAs are a use or lose it type of account, so the key is not to over fund.
• You can contribute up to $2,650 per year. If you’re married, your spouse can put up to $2,650 in an FSA with their employer too.

HSA

• For those who are utilizing a High Deductible Health Plan (HDHP), an HSA allows you to put money away pre-tax for medical expenses, similar to an FSA.
• There is no expiration date to an HSA and it may even be used if you switch to a non-HDHP.
• In 2020, you can contribute up to $3,550 or $7,100 single and married, respectively.  These amounts include any employer contribution as well.
• Funds can also be used in retirement (after age 65) for non-medical expenses. You have to pay taxes similar to a traditional IRA, however, there are no penalties.

Cell phone service discounts

• Many larger employers will have discounts on cell service, check the employee perk site on your company’s intranet or benefit summary.

Life & Accidental Death & Dismemberment (AD&D)

• Most employers provide basic life and AD&D insurance as part of your benefit package for no cost, however, they often offer supplemental options as well.
• Normally, if you are healthy, it’s less expensive to have a term insurance policy vs a supplemental plan through your employer.
• AD&D coverage only comes into play in certain instances and is usually not worth the cost.   Here’s a nice write up if you want to learn more.

Part of our service offering is reviewing and recommending company benefits.  I had a new attending physician client come on board this year and in reviewing is paystub realized he signed up for every single benefit possible.  He was paying an extra $1,500 per year vs what he actually needed.  Double check your pay stub to see what you are actually paying and for what and make sure it aligns with your needs; it could be costly otherwise.

WM

Weston is a Certified Public Accountant, Certified Financial Planner^TM, and holds the Chartered Financial Analyst designation. Weston earned his master’s degree in accountancy from the University of Missouri – Columbia. Weston is active in the St. Louis community and board member of the Anti-Defamation League.

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