Tips for choosing benefits during open enrollment

by Center for Personal Finance editors

HARTFORD, Conn. (10/19/06)--Employees face increasingly complex choices when it comes to health care and insurance benefits packages. As companies hold their open enrollment periods, experts advise you think long term and be diligent about finding ways to save money (Associated Press via Courant.com Oct. 10).

Resist the urge to just automatically renew the benefits you had this year, especially if you got married, moved, had a child, or had a child move out of the house--to name a few. And read the handbook because you may find some nice perks such as childcare resources and referrals, or assistance with adoptions and paid leave (SmartMoney.com Oct. 6).

Evaluate your options carefully:

Understand the limitations. Although an HMO (health maintenance organization) may be less expensive than a PPO (preferred provider organization), remember that you have to see certain doctors within the HMO network.

Factor in chronic conditions. If you have chronic medical conditions such as diabetes or asthma, ask whether each plan covers certain supplies or medications you may need.

Consider household changes. If the kids are grown and gone, are you still paying for orthodontic coverage? Redirect those dollars.

Think taxes. Health savings accounts are funded with pretax dollars. And flexible spending accounts let workers set aside pretax dollars to pay for certain qualified medical expenses such as co-payments, deductibles, and some medications.

Ask about benefits not on the list. Some companies, for example, might pay for the gym membership even though it's not on the list.

Finally, make a resolution to stay healthy, because some companies now reward employees for exercising regularly, not smoking, and not taking sick days or making major medical claims.

For more information, read "Health Savings Accounts: First Aid for Health-Care Bills?" in the Home & Family Finance Resource Center money management center.