Mistake #1: Thinking Passive Enrollment Means Your Benefits Won’t Change
“To make it as easy as possible for employees to renew their benefits, some employers have passive opt-ins—you don’t need to do anything if you aren’t making any changes.
However, coverage and premiums can change, so it can be a mistake to assume everything will be exactly the same.
We had an employee of a client company who wanted to have Lasik eye surgery and was planning to use his flexible spending account (FSA) to cover a good portion of the expense.
He had elected the full FSA contribution the year before, and heard in passing that the current year’s enrollment was going to be passive—so he assumed his FSA amount wasn’t changing.
But when he went to use his FSA card after the surgery, the charges were denied.
It turned out the FSA enrollment had not been passive and he’d missed the window to enroll—losing all of the tax savings he could have received if he had used FSA pretax dollars.”
—Cary Heaton, director of human resources, WageWorks, San Mateo, Calif.
Mistake #2: Assuming Your Coverage Is Better Than It Really Is
“Employees owe it to themselves to re-evaluate their policies every year to make certain their coverage still meets their needs.
Here’s an example of why: We’re currently working on a case in which a woman gave birth to twins and is now fighting nearly $30,000 in medical bills that the insurer and health care provider claim she owes.
The pregnancy was planned, and she believed her policy would cover all aspects of her and the twins’ care beyond her deductible—so she was shocked to be billed beyond what she thought her out-of-pocket expenses would be.
We believe we’ll be able to help her save on some of those costs, but she would have been on better footing had she chosen to enroll in a more robust plan.”
—Sarah O’Leary, founder and CEO of ExHale Healthcare Advocates, Dallas
“During a biometric screening, an employee discovered his blood pressure was so high that he had to go straight to the emergency room.”
Mistake #3: Not Taking Advantage of Wellness Programs
“It surprises me how many people don’t use company wellness programs—like gym memberships, health risk assessments, biometric screenings, smoking-cessation education and weight-loss programs.
I actually feel bad for people who don’t participate because they’re missing a huge opportunity to know key factors about their health—which can give them a chance to improve on problem areas.
I knew an employee who was initially reluctant to participate in a wellness program, but after two years, finally agreed to a biometric screening. He discovered his blood pressure was so high that he had to go straight to the emergency room.”
—Joe Ellis, senior vice president and employee benefits consulting and administration executive, CBIZ, Philadelphia
Mistake #4: Miscalculating FSA Dollars
“As more high-deductible and consumer-driven health plan options become available, many employees may find themselves turning to flexible spending accounts to help cover some of their medical costs.
But I see it every year: People either don’t put in enough, or estimate too much. Most don’t have a sense of what their health care will cost them, which can make it hard to estimate how much to put into an FSA.
For example, some may underfund because they don’t take into account the possibility of unexpected injuries or illness. Others may overfund because they forget that preventive care is fully covered under the Affordable Care Act—and might end up scrambling to spend that extra money at the end of the year.
We use an online tool with our employees that helps them approximate how much FSA money to set aside based on their expected medical needs. But if your company doesn’t have something like that, each open enrollment season, ask yourself: ‘Was I over or under in my FSA usage last year?’
Then think about possible elective procedures you might get in the coming year, and adjust your forecast accordingly. Part of being a good consumer is making a researched budget.”
—Arielle Bogorad, senior director of worldwide benefits, wellness and fitness for Cerner, Kansas City, Mo.
Mistake #5: Waiting Until the 11th Hour to Make Your Benefits Elections
“I see it all the time—people pick their benefits in a rush because they waited until the very last minute.
We send a lot of reminder emails—and sometimes even start calling employees—to get them to choose their benefits. They’ll say, ‘O.K., send me the link,’ then rapidly go through their choices and hit Submit.
Inevitably, we’ll get calls four months later from people saying, ‘My doctor isn’t covered anymore!’ because they didn’t do their due diligence before picking a plan.
When you’re in a rush, you could also run out of time to discuss your options with a spouse—which is a big mistake.
We had an employee whose wife was pregnant, but he picked a low-cost plan that didn’t offer much coverage because that’s what he usually picked. She was understandably upset, given that they’d be going to a lot of doctor’s appointments in the coming months.
We make sure to send benefits information to our employees’ homes so that a spouse also has the chance to see the options. Since starting that, we’ve seen a lot fewer cases of angry spouses.”
—Govind Menon, global total rewards lead, Sonos, Cambridge, Mass.
Mistake #6: Neglecting to Review Affordable Care Act-Related Changes
“Companies began offering Affordable Care Act-compliant health care plans starting in 2014, but our office had what was called a ‘grandmothered’ plan, which temporarily exempted it from ACA rules.
But going into 2016, we have to start using an ACA-compliant plan—which means we’ll have a lot more choices for coverage. And with those choices will inevitably come lots of confusion.
One of the biggest changes we’re dealing with is the ability to choose a separate plan for each member of your family. For people with a lot of dependents, it could get really confusing, really fast. They’ll have to compare coverage for one person to the next, and from one plan to the next.
Since this is making open enrollment trickier this year, couples really need to talk through their options together and pick a plan that works for the whole family.
It’s so easy to want to rush through the process, but then you may end up not checking off all the right boxes. So make sure to decline what you want to decline and add what you want to add—because once it’s done, you can’t undo it.”
—Sara Rudeen, human resources specialist, Foodbank of Santa Barbara County, Santa Barbara, Calif.
“I’ve seen employees neglect to sign their baby up for dental insurance, thinking they don’t need it. But most pediatricians recommend that children have their first dental screening by their first birthday.”
Mistake #7: Not Taking the Time to Review Your Dependents’ Health Care Needs
“Getting basic information wrong about dependents’ health care is something I see happen often with people who have both younger and older children.
For instance, I’ve seen employees neglect to sign their baby up for dental insurance, thinking they don’t need it. But most pediatricians recommend that children have their first dental screening by their first birthday.
And parents with young-adult dependents often forget that their children can stay on their insurance until age 26, even if their children are working full time and have access to other options. If parents already have family coverage, it may be more cost effective for the adult child to stay on that plan.
An exception is if you subscribe to a health maintenance organization and your dependent is moving out of the coverage network. In that case, check the terms and conditions of your health plan now so you can avoid surprises later.”
—Karen Tucker, director of human resources, Wheaton College, Wheaton, Ill.
Mistake #8: Skipping Your Company’s Benefits Q&A
“Many employees don’t like to ask questions about their benefits because it can be uncomfortable to talk about issues related to their money or health.
But by asking questions, you may determine that, for example, a $5,000 high deductible plan is actually a great option because your employer is making a $2,500 contribution to help defray costs.
Benefits advisers may also know about new plan options that sometimes offer incentives for early adopters, or they can talk you through the tax benefits of a health savings account.
So remember that there’s no such thing as a stupid question for your benefits team. They can help you look at your options in a whole new way.”
—Laura Raney, human resources communications manager, Alaska Airlines, Seattle
LearnVest Planning Services is a registered investment adviser and subsidiary of LearnVest, Inc., that provides financial plans for its clients. LearnVest, Inc., is wholly owned by NM Planning, LLC, a subsidiary of The Northwestern Mutual Life Insurance Company. Information shown is for illustrative purposes only and is not intended as investment, legal or tax planning advice. Unless specifically identified as such, the individuals interviewed or otherwise listed in this piece are neither clients, employees nor affiliates of LearnVest Planning Services and the views expressed are their own. Please consult a financial adviser, attorney or tax specialist for advice specific to your financial situation. LearnVest Planning Services and any third parties listed, linked to or otherwise appearing in this message are separate and unaffiliated and are not responsible for each other’s products, services or policies.