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It’s time for employees to make some decisions about employee benefits.
Many companies are starting to offer annual open enrollment periods for employees to enroll in health insurance in 2023. You can also consider other benefits if your employer offers them. We may also offer additional life and disability insurance, pet insurance, and educational assistance.
“People tend to [review] said Paul Fronstein, Director of Health and Benefits Research at the Employee Benefits Institute. “The most important thing is to really see what’s on offer.”
Health Savings Accounts Have 3X Tax Benefits
Plans with higher deductibles may also come with a Health Savings Account (HSA). This has three tax advantages. Contributions are pre-tax, investment growth is tax-free, and withdrawals spent on eligible medical expenses are also tax-free.
The annual cap for HSA contributions in 2023 is $3,850 for self-only coverage and $7,750 for family coverage. You can also leave money there each year.
If you don’t have an HSA, your company may offer a Medical Flexible Spending Account (FSA). Any money you donate to his FSA will also be pre-tax and used to cover medical expenses. This year’s contribution limit is $2,850 per employee. (The FSA cap for 2023 has yet to be announced.)
may lose at least some [your contributions]depending on how the FSA is configured.
Paul Fronstan
General Manager of Welfare Research Department, Welfare Research Institute
However, they usually come with a “use it or lose it” clause. This means that if you don’t use your balance by the end of the year, you will lose it unless your company gives you a grace period or allows you to use it. A certain amount is carried forward to the next year.
“You have to think carefully about how often you go to the doctor and how much maintenance medication you use,” Fronstein said. [your contributions], depending on how the FSA is configured. “
Regardless of which of these pre-tax savings options you use, it’s important to consider how you’ll cover your out-of-pocket expenses arising from doctor visits and other health care system uses.Willis Towers Watson Director.
“To reduce out-of-pocket costs, insurance premiums can be higher…but many families cannot afford the unexpected costs,” Levin-Scherz said.
According to Aon, employees will contribute an average of $4,412 to health insurance in 2022, of which $2,520 will be paid in premiums and $1,892 will be paid through cost sharing such as deductibles, copayments and coinsurance. It is
Other benefits may be available
Separate from health insurance, disability insurance may be offered free or at a low cost. The two basic types are short-term disability, which generally replaces 60% to 70% of salary, and long-term disability, which usually begins after 3 to 6 months and amounts to about 40% to 60% of income. Some companies also allow you to purchase additional coverage.
The same applies to life insurance. For example, you can get a fixed amount of coverage equivalent to one year’s salary for a low or no premium, and have the opportunity to purchase additional coverage.
If you are considering purchasing additional disability or life insurance, remember that insurance is generally tied to your employment with a company that provides coverage. outside the workplace.
Other common benefits offered through work include financial planning, tuition reimbursement programs and back-up childcare, according to Willis Towers Watson’s 2021 survey. Some companies offer emergency savings options to help with student loan debt or donate to 529 college savings plans.
