Open Enrollment: How to Select the Right Benefits
Nov 03, 2023
Employees selecting company-provided health
benefits may find the list of options and rates confusing. Host
J.R. Whalen is joined by Arthur Benefits Solutions founder Maameamba
Arthur-Price, to discuss what people should assess in their lives before making
selections. Plus, WSJ contributor Cheryl Winokur Munk explains the important
benefits people often overlook.
J.R. Whalen: Hey, Your Money
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Briefing for Friday, November 3rd. I'm J.R. Whalen for the Wall Street Journal.
It's November and for millions of workers, that means it's open enrollment
season when they select company provided health benefits for next year. But all
the choices, all the rates, and all the deductibles can result in lots of
confusion.
Maameamba Arthur-Price: One of the biggest mistakes I see is
overbuying a plan, making the choice of taking the most expensive plan thinking
this is the plan that's best for you. So now, you've spent all this money on
premiums and you only went to go see the doctor twice.
J.R. Whalen: We'll discuss the best ways to approach open
enrollment as well as important benefits people often overlook after the break.
Millions of Americans will be signing up for company-provided health benefits
this month, but the range of options and alphabet soup can result in confusion.
Maameamba Arthur-Price, founder of Arthur Benefits Solutions joins me. So
Maameamba, what should people consider in terms of their own situation when
they're selecting benefits?
Maameamba Arthur-Price: One of the things that people should be
considering for this upcoming open enrollment season is number one, looking at
their flexible spending account. Flexible spending accounts as it relates to
dependent care or healthcare benefits are one of the ways that you can use
pre-tax dollars to actually save money when going to the actual doctor. Another
thing that you should think of is looking at your healthcare savings account.
If you're in a plan that's a high deductible health plan, this is a plan that
is beneficial to you because you can continue to use those monies within those
accounts whether you leave the company or not. Whereas the flexible spending
accounts, if you don't use them, you lose them.
J.R. Whalen: Now, how about their health on a day-to-day basis?
What should they consider there?
Maameamba Arthur-Price: When we think about considering
day-to-day healthcare, you want to definitely do your annual physical. Within
all the plans throughout the United States, it's free to get your annual
physical. If you've got any upcoming expenses, you want to budget that in now
for next year, and again, take advantage of the flexible spending account or
the healthcare savings account so you can decide which plan actually works best
for you, whether it be going into a more fully funded plan, meaning if you are
actually going to have to pay more out of your pocket on the front end, then
you might want to consider that versus paying a little less out of your pocket
on premiums, and then putting that money into a healthcare savings account.
J.R. Whalen: Yeah, that consideration will come up when people
see deductible in the language, and that's a really important factor here,
isn't it?
Maameamba Arthur-Price: Absolutely. It's a huge factor because
again, inflation is a very real thing these days, and as we all know, money's
tight. And if we know that we've got a healthcare issue, you definitely want to
consider planning for some of those procedures ahead of time.
J.R. Whalen: The challenge here for people is that the benefits
programs are asking people to project 12 months out details about their health,
their life events, their situation with not only them but their family members.
Maameamba Arthur-Price: It's definitely a challenge and it is a
hit or miss, and that's why I tell folks to, if you are going to the doctors
regularly and if you know that you're fairly healthy, you may not want to buy
into that plan that's costing you $400 a month. You want to look at the plan
that really is going to give you the best bang for your buck, and if you've got
those few extra dollars, really save, save, save. That's where you're going to
be able to really see the value of the plan.
J.R. Whalen: What changes in terms of what's being offered this
year should people be aware of?
Maameamba Arthur-Price: What has come down from the IRS just
recently is that they have made a change in what you can increase for your
health savings account. So they've gone up a few hundred dollars in the
healthcare savings account, which is pre-tax dollars that you can roll over if
you're in a high deductible plan year over year. If you're 55 and over, you can
now go ahead and then include another $1,000 into your healthcare savings
account and individuals went up another $330 this year.
J.R. Whalen: Yeah, you mentioned FSA and HSA, two acronyms people
will be seeing. Other acronyms they might be seeing as well are PPO and HMO
when it comes to the medical coverage that they'll be selecting. What's the
difference between them?
Maameamba Arthur-Price: So an HMO is a very traditional plan.
These are plans where you cannot actually choose your doctor. So you've got a
very specific network of doctors that you can use within the plan setup, and
they're copay only plans. So you've got to get a referral to go see a
chiropractor, to go see a specialist. Now, for a PPO, you've got a much larger
network and you don't need a referral from your primary care physician in order
to go to see any sort of doctor. If you want to go see a chiropractor, you can
without a specialty referral, and those are deductible plans. So what you'll
see is you'll have some sort of plan oftentimes that are a lower deductible,
but costs more out of your paycheck in your premiums, and then you'll see a
more high deductible health plan with an HSA, health savings account, tied to
that plan, which will have that $15,000 or $30,000 individual deductible that
you want to be aware of, but it'll be less premiums out of your paycheck. So
that's where you're seeing most companies move to.
J.R. Whalen: There are so many details here for people to follow
and be aware of. What are the most common mistakes that you see that people
make when they're signing up for benefits?
Maameamba Arthur-Price: One of the biggest mistakes I see is
over buying a plan. So you taking a look at the two or three options that your
organization has provided you and you making the choice of taking the most
expensive plan thinking this is the plan that's best for you. So now you've
spent all this money on premiums and you only went to go see the doctor twice
and one of those two times was free. So you're still paying those premiums and
now you can't get out of the plan until you have a qualifying status change or
open enrollment. That is one of the biggest mistakes. Or folks not necessarily
planning ahead for what they need in the flexible spending account and not
having a carryover to be able to roll over the FSA, flexible spending account,
dollars. I would say the most important thing to make sure of also is to make
sure you update your beneficiaries. If you just recently got a divorce or you
just recently had a baby within the last 12 months, or you just recently got
married, these are the opportunities where you want to be taking a look at your
beneficiaries and making sure that they're updated.
J.R. Whalen: That's Arthur Benefits Solutions founder Maameamba
Arthur-Price. Maameamba, thank you very much for being with us.
Maameamba Arthur-Price: Thank you.
J.R. Whalen: There are also important company provided benefits
that an employees can sign up for any time of year, but many overlook them. WSJ
contributor Cheryl Winokur Munk joins me. So Cheryl, for a lot of people, their
benefits package is as important as their salary, and yet they overlook
benefits they'd actually use. Why is that?
Cheryl Winokur Munk: Well, it makes a lot of sense if you think
about it. When you join a company, you're given a lot of materials and there's
just so much in there. A lot of people just thumb through it, but they just
don't take time to understand the minutia. A study from MetLife shows that
nearly one in five employees are either not at all confident or only slightly
confident in their understanding of the benefits offered by their employer.
J.R. Whalen: And benefits that focus on mental health are among the
most underused. What kinds of programs do many companies offer?
Cheryl Winokur Munk: They offer something called employee
assistance programs, and those are confidential, so a lot of employees are
concerned that information is going to get back to their employer. And while
employers do get general numbers, maybe about how many employees take advantage
of the services, they don't get names. So there's really no fear for an
employee to use an employee assistance program. And there are various types of
benefits within the programs. It can be talking to a counselor. Sometimes they
have apps that help you with relaxation or meditation. Companies also offer
wellness programs and incentives, so it may be benefits related to exercise or
maybe you'll get free flu shots or free COVID boosters or other perks that you
would get for keeping healthy. Some companies do fitness center memberships,
you can do health screenings, health risk assessments. There may be benefits
for weight loss programs or smoking cessation and stress reduction. So there's
a whole gamut of programs that companies offer.
J.R. Whalen: Supplemental insurance is also offered by many
companies. Why would somebody choose that?
Cheryl Winokur Munk: At open enrollment time, you can buy
supplemental insurance policies at group rates, and those rates can be a lot
lower than individual rates typically are. So it might be additional life
insurance, it might be disability insurance or long-term care insurance, even
critical illness, and sometimes even pet insurance. And again, offer rates that
might be less than you can get on your own.
J.R. Whalen: More employees, especially millennials, are dealing
with caring for elderly family members. What benefits might be offered that
address that?
Cheryl Winokur Munk: They have something called backup care, a
lot of companies, and that means that they're recognizing that sometimes the
regular care programs you have for a parent or a child or even a pet sometimes
fall through, and so there can be subsidies and reimbursements for a child or
elder care, and a lot of these tend to go unused. And so, what happens is is
that you can request care usually from a vetted network through an app or maybe
an online portal, and you would pay maybe an hourly or daily copay, which is decent
if your care falls through. It means you don't have to take another day off
from work.
J.R. Whalen: What if there's a benefit you wish that your
company had, but it's not offered?
Cheryl Winokur Munk: Just ask. What's the worst the company can
say? "Oh, no. We don't offer that." But you might find out,
"Hey, we're actually thinking about that." And the other thing is is
if companies hear from enough employees that they're interested in a particular
benefit, the company may actually consider offering it, and then you could be
responsible for having a benefit that you didn't have before. It never hurts to
ask.
J.R. Whalen: That's Wall Street Journal contributor, Cheryl
Winokur Munk, and that's it for your money briefing. We'll be back on Monday
with WSJ's Laura Kusisto to discuss how the recent lawsuit regarding inflated
real estate fees could affect both home buyers and sellers. Today's show is
produced by Ariana Aspuru. I'm your host, J.R. Whalen. Our supervising producer
is Melony Roy. Aisha Al-Muslim is our development producer. Scott Saloway and
Chris Zinsli are our deputy editors. And Philana Patterson is the Wall Street
Journal's Head of News Audio. Thanks for listening.
Source: Wall Street Journal