Open Enrollment: A Guide to Maximizing your Employer-Sponsored Benefits
By Erica Zaragoza, Financial Advisor
of GWN Securities, Inc.
for LA Wealth Management
Open enrollment period is upon us and it’s essential to revisit the variety of employer-sponsored benefits available. Our personal and professional lives are ever-changing and programs that were not relevant in the past can now be highly beneficial. With the complexities of financial planning, healthcare needs, and family care, making the right decisions during open enrollment is crucial to protecting your long-term well-being.
Here is a breakdown of the most common and valuable employer-sponsored benefits you may encounter and why it’s important to reassess these options every year.
1. Health Insurance Plans: The Core Benefit
Your health insurance plan is the foundation of your benefits package, and reviewing your options each year can save you thousands in premiums and out-of-pocket expenses. Whether you’re single, married, or have a family, health needs evolve. Many employers offer multiple tiers of coverage—ranging from High Deductible Health Plans (HDHPs) paired with Health Savings Accounts (HSAs) to Preferred Provider Organizations (PPOs) with lower deductibles but higher premiums.
Why Review Annually?
Changes in your health: Have you or a family member been diagnosed with a chronic condition or anticipate a major medical event like surgery or childbirth? Choose the plan that will support your needs in the coming year(s).
Plan adjustments: Employers often tweak coverage and premiums, so a plan that worked last year may not be the best fit today. Check the fine print for coverage and cost share information.
2. Health Savings Account (HSA) and Flexible Spending Account (FSA)
An HSA can be a powerful tool if you're enrolled in a high-deductible health plan (HDHP), allowing you to set aside pre-tax dollars for medical expenses. The HSA’s key advantage is that funds roll over year to year and can even act as a retirement savings vehicle. FSAs, while also offering pre-tax savings for medical expenses, have more limitations—particularly the “use it or lose it” policy that requires you to spend the funds within the plan year.
Why Review Annually?
Tax advantages: Maximize your contributions if you anticipate higher medical costs next year or have leftover funds you didn’t expect.
Childcare or dependent care: FSAs also allow for pre-tax savings for childcare costs, which is an important consideration for parents or caregivers.
Understand the similarities and differences between HSAs and FSAs to make the best choice for your particular situation.
3. Life and Disability Insurance: Securing Your Income
Life insurance is often offered through employers at a minimal cost, and many provide additional voluntary life insurance for you, your spouse, or dependents. Long-term and short-term disability insurance ensures that your income is protected if you are unable to work due to illness or injury.
Why Review Annually?
Changing needs: If you've had significant life changes—like getting married, having children, or taking on a mortgage—your life insurance coverage may need to be increased.
Cost-benefit analysis: Disability insurance offered through employers can be a more cost-effective way to protect your income than purchasing individual policies. Review both short-term disability and long-term disability options that may be offered to avoid catastrophic financial circumstances during a disability event.
4. Retirement Plans: 401(k), 403(b), 457(b) and Employer Match
Retirement savings options such as 401(k), 403(b), and 457(b) plans provide a tax-advantaged way to save for your future. Many employers also offer a matching contribution, which is essentially free money for your retirement if you contribute enough to qualify.
Why Review Annually?
Maximize your contributions: As your financial situation changes, you may be able to increase your contributions, especially if you receive a raise or if your salary increases with years of service.
Automatic Enrollments: Many plans now offer automatic enrollment and/or contribution increases. Understanding how these automatic enrollments work is critical. They can help your contribution rate rise incrementally over time. These features help save more as your income grows, without needing to make manual adjustments, ensuring that you're gradually increasing your savings to match your future retirement needs.
Matching benefits: Ensure you’re taking full advantage of the employer match, as this is one of the most valuable benefits available.
Review Risk Tolerance: Evaluating your risk tolerance for your retirement portfolio should also be revisited. As your financial goals, time horizon, and market conditions change, your portfolio may need to be rebalanced to reflect your current risk tolerance.
5. Employee Assistance Programs (EAP)
EAPs provide confidential support for mental health, financial planning, and legal services. As life becomes more complex, you may find these resources invaluable.
Why Review Annually?
Underutilized resources: Many employees are unaware of the full scope of services, which often include therapy sessions, financial consultations, and legal advice—programs that could save you time, money, and stress.
6. Supplemental Benefits: Critical Illness, Accident Insurance, and More
In addition to standard health insurance, many employers offer supplemental insurance that covers specific events such as accidents, critical illness, or hospitalization. These plans provide lump-sum payments that can help offset the costs of medical care, lost wages, or other unforeseen expenses.
Why Review Annually?
Consider your risk profile: If you’re more active, have aging parents, or simply want additional peace of mind, these supplemental plans might be worth considering. Assess whether the cost aligns with your current risk factors.
7. Commuter Benefits and Tuition Assistance
If you commute to work or are considering additional education, commuter benefits and tuition reimbursement programs can provide significant tax savings or direct financial assistance.
Why Review Annually?
Changes in commuting patterns: Whether you’re back in the office more often or working remotely, your commuter benefits can be adjusted accordingly.
Education goals: If you’ve been putting off additional certifications or degrees, tuition assistance can lighten the financial load.
Educational loan repayment: programs allow employers to contribute directly to employees' student loan debt, reducing financial burdens. Under the provisions of the CARES Act, which were extended through 2025 by the Consolidated Appropriations Act, employers can provide up to $5,250 per year in educational loan repayment assistance to employees without it being considered taxable income. This tax-free benefit applies to both tuition reimbursement and payments toward employees' student loans, allowing employers to help reduce their employees' student debt burden without increasing their taxable income. Review these benefits yearly as tax benefits and your particular tax situation may change from year to year.
Employer Sponsored Scholarships: these may be available to employees' dependents which will support the next generation’s education.
Final Thoughts: Make Annual Reviews a Priority
Employer-sponsored benefits can be easy to overlook once you've made your initial selections, but it's critical to review your options each year. As life changes—whether due to health needs, family dynamics, or financial goals—your benefits should evolve too. Don’t let open enrollment pass by without taking the time to ensure that your choices align with your current and future needs.
If you’re unsure where to start, consider scheduling a meeting with your HR representative or a financial advisor who can help you navigate these important decisions. The effort you invest now could pay off in both the short and long term.
Disclosure: Information provided should not be considered as tax advice from GWN Securities, Inc. or its representatives. Please consult with your tax professional.