Open Enrollment: Other Benefit Selections

 Various benefits offered by employers might not fit the mold when it comes to choices you have to make during Open Enrollment.  Some benefits are more obscure.  For example legal services, long-term care insurance and even professional development tracks could be perceived as benefits today.  

Professional Development:

Professional development encompasses all types of facilitated learning opportunities, ranging from college degrees to formal coursework, conferences and informal learning opportunities. There are a variety of approaches to professional development, including coaching, consultation, mentoring, technical assistance, and even reflective supervision.  If your employer has an annual budget for such activities, you know they are serious.  I suggest reading your employee handbook to see what resources are available to enhance your career and personal development.

At the Center for Financial planning our firm maintains professional development tracks. We have a professional development budget and provide at least one formal meeting each year with each employee discussing their career and personal development. There are other meetings and discussions throughout the year, like check-ins and group discussions that can help provide insight to employees as well.

Group Long-Term Care Insurance:

Here’s a startling fact: Over 40% of people receiving long-term care services are under the age of 65. These days, some forward-thinking companies are offering long-term care insurance. As an employee, you may want to consider this as part of your benefits package, because it’s a way to help:

✔ Protect your savings and assets

✔ Protect your family and friends from the burden of caregiving

✔ Protect your ability to choose where care is received

Employer-sponsored group coverage for LTCi brings up some thorny issues. While some group plans can be helpful for folks with certain, otherwise-disqualifying health conditions, in some cases LTCi coverage is best customized and purchased through an independent broker. That’s because many group plans entice younger, healthier people to enroll by offering them lower rates, but these rates may still be higher than an individual policy. Group plans typically have fewer selections in benefit choices and less amount of home care.

Pre-Paid Legal Services

Another rather new and uncommon employee benefit is pre-paid legal service.  This is an individual or group low-cost provider for specific, limited legal services. The services are usually pretty basic, but can sometimes be specialized and can cost considerably less than hiring an attorney on your own. These services can be helpful to participants with anything from automotive-related issues and ticket violations to various basic legal issues like purchasing a home without a realtor.

Pre-paid legal services may be provided on an "open" basis, with a subscriber selecting specialists relatively freely from a pool of participating providers. They may also be offered in a "closed" system, in which most or all services are provided to a subscriber by one central law firm. Pre-paid legal services have existed since the early 1900s, and have increased in popularity since the 1970s.

These might not all be benefits that you have to select during open enrollment. In some cases, they may be yours for the taking. But you can’t take advantage, if you don’t know what’s available. So find out about your own company policies and make the most of them. This is just one in our 8-part blog series dedicated to answering the tough questions during the open enrollment season.

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Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation.  The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete.  Any opinions are those of Center for Financial Planning, Inc., and not necessarily those of RJFS or Raymond James.  You should discuss any tax or legal matters with the appropriate professional.

Open Enrollment: Disability Insurance

 Too often disability insurance is overlooked or underutilized.  It is natural to assume good health enjoyed today will continue uninterrupted until retirement.  Because this is not always the case, paying for disability insurance today when it is not needed is like dotting the “i’s” and crossing the “t’s” in a comprehensive financial plan for the future.  In the event a health crisis occurs, disability insurance is designed to replace a portion of your income lost during the period of disability. 

Employers that include disability insurance on the menu of choices generally offer two types:

✔ Short term disability – provides benefits for a limited period of time – usually six months or less.

✔ Long term disability – provides extended benefits after an employee has been disabled for a period of time.

Short Term Disability Insurance:

✔ Bridges the gap between sick pay and long term disability coverage. 

✔ Coverage typically lasts between 10 to 26 weeks.

Long Term Disability:

✔ Benefits employees who are disabled as a result of sickness or accident and unable to work for a lengthy period of time (usually more than six months).

✔ Long term disability insurance does not provide insurance for work-related accidents or injuries that are covered by workers compensation insurance.

What else do you need to know?

✔ The cost of group coverage is often less expensive than the cost of individual coverage

✔ Group policies often have fewer underwriting restrictions than individual policies.  A physical exam is not typically required.

✔ “You can’t take it with you” is a phrase that normally applies to group disability insurance.  When you leave your job most often the coverage does not convert to an individual policy.

✔ If you know you are leaving your job, consider applying for individual coverage before you quit. Assuming you are insurable this strategy eliminates lapses in coverage.

✔ Consult a Certified Financial Planner™ to determine how disability insurance fits into your long-term financial picture.

We want to make sure you don’t miss your opportunity to take advantage of employer provided benefits during open enrollment period.  That’s why we are focusing an 8-blog series on your options when it comes to open enrollment. Typically, open enrollment is offered toward the end of each calendar year and provides a window of time to make new elections or change current benefit coverage.  It’s easy to confirm this period of time by checking with your human resource department or benefits coordinator.

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The information contained in this report does not purport to be a complete description of the securities, markets or developments referred to in this material.  The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete.  Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Any opinions are those of Center for Financial Planning, Inc., and not necessarily those of RJFS or Raymond James.  You should discuss any tax or legal matters with the appropriate professional.

Open Enrollment: Health Insurance and Medicare Enrollment

 Reviewing health care insurance options is as important as getting a physical or flossing (and about as much fun).  For employees age 65 and older, this decision becomes more complicated due to Medicare eligibility.  Major questions arise for this group of employees: 

• What, if any, health insurance coverage will my employer provide when I turn 65?
• Should I apply for Medicare at age 65?
• If I apply for Medicare, what parts should I apply for (A, B, D)? 

Legally, employers can drop employees from their group health plans once they turn 65.  But Medicare secondary payer rules prevent employers from reducing health benefits to current employees due to their eligibility for Medicare (except for very small employers).  So, the employer must offer equal health benefits to all employees; coordinating health benefits with Medicare is allowed as part of this offering.  

Employers with more than 20 employees typically offer group health coverage to 65+ employees, with Medicare acting as the secondary payer.  In this case, eligible employees should enroll in Medicare Part A, hospital coverage, which is free.  These employees should also get a deferral from Medicare so that they are not subject to penalties for enrolling in Parts B and D in the future.  

Employers with less than 20 employees offer group coverage that is the secondary to Medicare.  In this case, eligible employees should enroll in Medicare Parts A and B (Part B covers medical services, including doctor visits).  Failing to enroll in both parts of Medicare could leave them responsible for paying out-of-pocket for anything that Medicare would have covered.  

Here are some tips and considerations for employees age 65+ in making health insurance and Medicare enrollment decisions:

✔ Coordinate with your spouse. If you are both still working at age 65, you can compare employer health plans and how they work with Medicare.  If spousal/family coverage is available, choose the optimal plan. 

✔ Get in writing the details of your employer-provided coverage to help you decide how to handle Medicare choices. 

✔ Plan to enroll in Medicare Part A (it’s free!) up to 3 months prior to your 65^th birthday.  You can sign up online or at your local Social Security office. 

✔ If you are planning to enroll in Medicare Part B or Part D (prescription drug coverage), you can enroll up to 3 months prior to age 65 or within 8 months of retirement or loss of group health coverage (if you miss the 8 month Special Enrollment Period, you will need to wait until the next General Enrollment Period for that coverage).

✔ Consult with a CERTIFIED FINANCIAL PLANNER™ to help you choose the benefits that are most appropriate for your financial situation. 

✔ Most importantly, do your research and plan ahead; Medicare has strict enrollment periods and rules that come with financially penalties. 

This is the third blog in our 8-part open enrollment series. Check back in the upcoming days for more important tips to help you make the best choices for the upcoming year.

Sandra D. Adams, CFP® is a Lead Financial Planner at the Center for Financial Planning, Inc. In 2012, she was named to the Five Star Wealth Managers list in Detroit Hour magazine. In addition to her frequent contributions to Money Centered blogs, she is a regularly quoted in national media publications such as the Wall Street Journal, Research Magazine and the Journal of Financial Planning.  Sandy is a frequent speaker on the topic of Elder Care Financial Planning.

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Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation.  Any opinions are those of Center for Financial Planning and not necessarily those of RJFS or Raymond James.

Open Enrollment: Health Insurance

 At this time of year, many of you might have an opportunity to select a medical plan as part of your employer’s open enrollment period.  Selecting the appropriate medical plan is one of the most important decisions each year.  We all have heard stories, unfortunate stories, of hard working folks that have significant financial issues due to extreme medical expenses.  This blog post isn’t written to convince anyone that they need adequate health insurance – rather it is meant to provide some thoughts and tips on how to make the best choice for you and your family. 

Employers that offer multiple medical plan options generally offer three types: 

• Traditional
• Preferred Provider Organization (PPO)
• Health Maintenance Organization (HMO).  

Traditional:  This option usually provides the greatest flexibility in accessing doctors and hospitals. And, as you might expect, usually carries the highest monthly premium, deductible, and copay on services.

PPO:  This option provides for lower premiums and copays as compared to the traditional plans if you visit doctors and hospitals within the PPO network.  There is some flexibility in that you can seek services out of the network if desired, albeit at a higher cost in terms of deductible and/or copayment.

HMO: The HMO option generally features the lowest cost in terms of monthly premiums, deductibles and copayments in exchange for less flexibility.  Each person must select a primary care physician whom is responsible for directing your overall care.

Here are some more tips and considerations in selecting medical insurance during open enrollment period:

✔ Coordinate with your spouse:  It may make sense to both be covered by one employer’s plan depending upon your premium sharing requirements. 

✔ New children: Sometimes the plan that was appropriate for a couple is no longer the best plan with kids. If your family is growing, consider a plan with a lower doctor visit copayment.

✔ High(er) deductible plan:  These can be great options as they reduce your monthly premiums in return for potentially higher deductibles.  Be sure that you have adequate cash reserves.

This is the second blog in our 8-part open enrollment series. Check back in the upcoming days for more important tips to help you make the best choices for the upcoming year.

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Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation.  Any opinions are those of Center for Financial Planning and not necessarily those of RJFS or Raymond James.