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Navigating Open Enrollment: Key Considerations for Insurance Benefits

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Open enrollment is a crucial period for employees when they can make changes to their insurance benefits. This annual event is a chance to assess and modify your coverage to better align with your current needs and life circumstances. To make the most of open enrollment, it's essential to consider several factors carefully. In this article, we'll explore the key considerations to keep in mind during open enrollment for insurance benefits.

Review Your Current Coverage:

The first step in open enrollment is to thoroughly review your existing insurance coverage. Take a close look at your health, dental, vision, life, and disability insurance policies. Consider factors like deductibles, copayments, and coverage limits. Make note of any areas where your current plan may be lacking or overcompensating. During open enrollment, employers typically provide a range of insurance options. Take the time to explore these alternatives and compare their benefits, premiums, and coverage. Pay close attention to any changes in plan offerings or benefits that might have occurred since the last open enrollment period.

Assess Your Healthcare Needs:

Your healthcare needs may change from year to year, so it's important to evaluate your anticipated medical expenses. Consider any upcoming surgeries, prescription medications, or treatments you or your family members may require. This assessment will help you select a plan that adequately covers your healthcare needs. If you have dependents, it's essential to consider their needs when selecting insurance benefits. Assess their healthcare requirements, including doctor visits, prescriptions, and any specialized care. Ensure that the chosen plan covers your family members' medical needs.

Understand Cost Considerations:

Cost is a significant factor in choosing insurance benefits. Evaluate the premiums, deductibles, and out-of-pocket expenses associated with each plan option. While a lower premium might seem appealing, it can result in higher out-of-pocket costs if you require frequent medical care. Weigh your potential expenses against your budget to make an informed decision.

Evaluate Additional Benefits:

Many insurance plans offer additional benefits beyond basic coverage. These may include wellness programs, telemedicine services, mental health support, and preventive care. Evaluate these extra offerings to determine if they align with your health and wellness goals.

Take Advantage of Tax-Advantaged Accounts:

Open enrollment is an excellent time to take advantage of tax-advantaged accounts like Health Savings Accounts (HSAs) or Flexible Spending Accounts (FSAs). These accounts can help you save money on healthcare expenses by allowing you to contribute pre-tax dollars.

Open enrollment for insurance benefits is a critical annual event that requires careful consideration. By reviewing your current coverage, assessing your needs, exploring available options, and considering costs, you can make informed decisions that will protect your health and financial well-being. Seek professional guidance when necessary, and most importantly, “meet the enrollment” deadline to ensure you have the coverage you and your family need for the year ahead. Taking these steps will help you make the most of open enrollment and secure the insurance benefits that best fit your situation.

Financial Enhancement Group is an SEC Registered Investment Advisor. Securities offered through World Equity Group, Inc. Member FINRA/SIPC. Advisory services can be provided by Financial Enhancement Group (FEG) or World Equity Group. FEG and World Equity Group are separately owned and operated.

What do Motorcycles, Risk Management and Long Term Care Insurance Have in Common?

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A recent surge in temperatures had motorcycles heading to the streets. Long time readers may remember I logged more than 30,000 miles on the back of two Harley Davidson’s in my 30’s. Alas, those days have passed.

A question was asked on my radio program about how to deal with long term care issues and the risk involved. You may wonder how motorcycles, risk, and insurance go together. When teaching risk management at Purdue University, I used the motorcycle example to explain risk management for understanding the risk involved with long term care insurance.

There are four things – and only four things – you can do in risk management. This is true of every risk you can imagine from asking a girl to prom, buying a stock or considering long term care insurance. Please note that even though these are all options, they may not be readily available for one reason or another.

Consider that we are in the winter season with a beautiful sky, warm air but wet roads covered with debris. One of the worse combinations for a motorcycle as leaves can be like glass on their underside in these conditions. Let’s assume I am considering pulling my Roadking Classic (how I miss that bike) out for a spin.

The chance of an accident is not likely, but the probability has increased due to weather issues. Now it is time to turn to our risk matrix for possible solutions.

First, I can retain the risk. I can apologize to my mother and simply go ride and accept the risk.

Secondly, I can avoid the risk. I can make my mother happy and leave the bike in the garage.

Third, I can reduce the risk. I can put a helmet on my head and ride only on streets well-traveled to reduce a chance encounter with the mischievous leaves.

Fourth, and final choice, is to transfer the risk. Typically, that is done via insurance of some nature.

All four options are available to me – at a price – but they are all on the table. That is not true of all risks you will encounter. Nobody will insure your dryness for instance on a rainy day if you have no umbrella.

Long term care insurance is an option no longer available in some states. That is because of the cardinal rule of insurance: you should only insure against (both the insurance company and the buyers should seek the same conditions) things that are not very likely to happen and very costly if they do happen. Low probability and high cost are the key.

Long term care insurance was grossly mispriced when it first came out for a host of reasons. The insurance industry had the numbers correct or so they thought. They were dead wrong though and many premiums have been raised to a point where owners had to cancel policies later in life.

Look at your risk. Ask yourself if you can afford the risk and is it worth retaining? If not, look to the other three but do know that things like premiums can change.

Disclaimer: Do not construe anything written in this post or this blog in its entirety as a recommendation, research, or an offer to buy or sell any securities. Everything in this post is meant for educational and entertainment purposes only. I or my affiliates may hold positions in securities mentioned in the blog. Please see our Disclosure page for the full disclaimer.

4 Things to Help Mitigate Financial Risk

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People take risks every day. Some of them are more obvious like driving a car, but we forget the less obvious such as falling in the shower. There are four things you can do to help mitigate your exposure to risk, including financial risk, (although that won’t help with the sore backside).

You can abstain from risky things.  Though that may not sound ideal or even feasible, it is an option. Some families won’t drive when it is dark outside. My wife and I used to enjoy riding our Harley Davidson. We still miss it, but drivers don't pay attention anymore (texting and driving), that the danger is not worth buying a new Harley Davidson.

You can reduce risk by putting down a bathmat in the shower or putting on a helmet when you ride your motorcycle. Reducing risk is really the best option for many situations.

You can accept the risk and head out on the motorcycle or dance wildly in the bathtub. Sadly, every time we drive, we recognize that distracted drivers surround us.

The final thing you can do to address financial risk is to transfer that risk to another party.  Usually, this occurs with insurance products. You have health insurance for the fall, liability insurance for the accident, and even life insurance for the extreme situation.

A common fear among American retirees is the expense of living in a nursing facility later in their life. We have all heard the horror stories of losing assets and being forced to leave homes. My personal experience is this is overstated, but it is a risk, nonetheless.

Health insurance companies developed long term care policies that were written in the past. That industry cannot typically adjust premiums individually, but they can do it by class.  If for instance, the claims-paying experience was increased, the companies can and did raise the premiums in many cases. This made the payments unaffordable for some senior citizens years down the road.

You can’t be mad at the insurers. This is no different than raising premiums on your house or car as they become more expensive to replace. The policies, in my opinion, had challenges from the point of inception. That is no way an endorsement by me that you should cancel a contract if you have already purchased it but do be aware of the situation.

Recently, the life insurance industry (which cannot raise premiums) has created a Hybrid policy that covers long-term care and your life insurance.

If you have plenty of resources for retirement, are concerned with long term care expenses and have beneficiaries that matter to your legacy plan; this is a possible solution. According to the Wall Street Journal, there were 66,000 traditional policies purchased last year compared to 240,000 for the hybrid.

There are many products that we have investigated and even recommend the purchase for families that fall in the right financial scenario. We reduce financial regrets at the Financial Enhancement Group, visit yourlifeafterwork.com for more information.

Disclaimer: Do not construe anything written in this post or this blog in its entirety as a recommendation, research, or an offer to buy or sell any securities. Everything in this post is meant for educational and entertainment purposes only. I or my affiliates may hold positions in securities mentioned in the blog. Please see our Disclosure page for the full disclaimer.

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