3rd Quarter 2019

Open Enrollment Benefits Decisions That Stretch Your Income

Fall is typically when employees have the chance to sign up, change, or drop employee benefits for the following year. You’ll need to make key decisions about your health insurance and retirement savings, but you may also have some other options, too — such as pre-tax accounts for childcare and health care, discounts on other insurance, financial benefits for wellness programs, and pre-tax transportation benefits. As you review these decisions, consider the following perks to help stretch your income even further in 2020.

Health insurance. If your employer offers a few plans, compare all the available options — even if you’ve been happy with your current coverage. Compare premiums, deductibles, co-payments, out-of-pocket costs for your prescription drugs, and whether your preferred doctors and hospitals are part of the plan’s network.

Health savings account (HSA). If you have an eligible health insurance policy with a deductible of at least $1,400 for single coverage or $2,800 for family coverage in 2020, you can contribute pre-tax money to an HSA. Money in an HSA can be used tax-free for out-of-pocket medical expenses anytime in the future. Some employers match HSA contributions or contribute a few hundred dollars to your account just for signing up.

Health-care flexible-spending account (FSA). If you don’t have an HSA-eligible health insurance policy, your employer may offer an FSA. This option lets you set aside pre-tax money for out-of-pocket medical expenses (the limit is $2,700 in 2019). Money in a medical FSA usually must be used by the end of the year; some plans let you carry over $500 from one year to another or give you until March 15 to spend the funds.

Flexible-spending account for dependent care. If you have kids under age 13 and pay for childcare while you and your spouse work (or if one spouse works and the other is a full-time student), then you can set aside up to $5,000 as a pre-tax benefit in a dependent-care FSA (the maximum contribution of $5,000 is per household each year, even if both spouses have access to a dependent-care FSA at work).

Discounts on other insurance. Your employer may offer discounts on other types of insurance, such as life, disability, long-term care coverage and even pet insurance. Compare the costs and premiums for buying these policies through your employer versus on your own.

Wellness benefits. More employers now offer benefits to keep you healthy, along with incentives to participate — which may be worth hundreds of dollars. For example, you may earn cash or gift cards for completing a biometric screening or reaching certain activity goals. Or you could snag discounts on gym memberships, weight-loss incentives, or smoking cessation programs. Find out which perks your employer may be offering for 2020.

Transportation benefits. To help cut the cost of commuting, many employers also let you set aside pre-tax money to use for public transit or parking.

Retirement savings. Expect a raise next year? Have your children graduated from college? Consider increasing your retirement contributions when income rises or expenses decrease. If your employer matches your contributions, try to contribute at least enough to get the full match. You can also make extra catch-up contributions to your 457 plan if you’re age 50 or over anytime in 2020. Or, you may be able to make a “pre-retirement” catch-up contribution if you’re within three years of your full retirement age and haven’t contributed the maximum to your account. See Retirement Savings Plan Contribution Limits (www.icmarc.org/contributionlimits) for more information.

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