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Every fall (with some exceptions for certain employers), your employer gives you a short window to make choices that affect your money for the whole next year.

That window is open enrollment. For most people, it gets about ten minutes of attention before they click "keep my current elections."

That's understandable. Benefits packets are long, the terms are confusing, and you're busy.

But your benefits are a big part of your total pay. The choices you make now can change your taxes, your savings, and your level of protection if something goes wrong.

Why Is Open Enrollment Important?

Open enrollment is usually your only chance each year to change most of your benefits.

After the window closes, you're generally locked in until next year. The exception is a qualifying life event, like marriage, the birth of a child, or a spouse losing coverage. Even then, you usually have only about 30 days to make changes.

Your life also changes from year to year. A new baby, a raise, a health diagnosis, or a plan to leave your job in two years can all affect what benefits are best for you.

And your employer's options change too. Premiums go up. Plans get added or removed. New benefits appear that you may not know about.

A careful review once a year helps you catch these changes before they cost you.

How Do I Choose the Right Health Insurance Plan During Open Enrollment?

Health insurance is usually the biggest decision in your benefits package. It's also the one with the most moving parts.

Start by looking at the total cost of each plan, not just the premium. The real cost includes your premium, your deductible, your copays and coinsurance, and your out-of-pocket maximum.

Then think about your own situation. Your age, your health, your income, your cash flow, and the size of your emergency fund all matter.

Should I Choose a High-Deductible or Low-Deductible Health Plan?

A high-deductible health plan (HDHP) has lower premiums but makes you pay more before coverage starts.

This can work well if you're generally healthy and have a solid emergency fund. You save on premiums, and you may qualify to open a health savings account (HSA).

A low-deductible plan costs more each month. But it can save you money if you expect frequent doctor visits, ongoing prescriptions, a planned surgery, or a baby in the coming year.

A useful exercise is to estimate your health costs for a "normal" year and a "bad" year. Then compare what each plan would cost you in both cases.

If you'd struggle to pay the full out-of-pocket maximum on an HDHP, the lower premium may not be worth the risk.

Should I Add My Spouse and Kids to My Employer Health Insurance?

If you're married or have dependents, compare your options as a household.

First, find out how much your employer pays toward spouse and dependent coverage. Some employers pay a large share. Others pay very little, or add a surcharge if your spouse can get coverage through their own job.

If your spouse or kids are already covered somewhere else, look at what would change if they switched. Check the prescription coverage, the provider network, and whether their current doctors are in-network.

Sometimes it makes sense for everyone to be on one plan. Other times, each spouse keeps their own employer coverage, and the kids go on whichever plan is cheaper for dependents. There's no single right answer, so run the numbers.

What Is the Difference Between an HSA, FSA, and HRA?

Many employers offer one or more tax-advantaged accounts for health costs. They sound similar, but they work in different ways.

How Do I Use an HSA for Retirement Savings?

A health savings account is only available if you're enrolled in an HSA-eligible HDHP.

HSAs have a triple tax advantage. Contributions go in pre-tax, the money can grow tax-free, and withdrawals for qualified medical expenses are tax-free.

The IRS sets HSA contribution limits each year, with one limit for self-only coverage and a higher one for family coverage. If you're 55 or older, you can add a catch-up contribution on top of the standard limit.

Your employer's contributions count toward these limits, so include them when you set your own payroll amount.

Unlike an FSA, your HSA balance rolls over every year. It's yours to keep, even if you change jobs.

That's why many people treat an HSA as a second retirement account. If your HSA offers investments, you can invest the balance for long-term growth instead of leaving it in cash.

Your investment choices should reflect how you plan to use the money. Money you expect to spend on health costs soon may belong in cash. Money you plan to leave alone for decades can be invested more like retirement savings.

There's another useful feature. You can pay for medical expenses out of pocket today, keep your receipts, and reimburse yourself from your HSA years later, tax-free. This works for expenses you, your spouse, or your dependents had after you opened the account.

Good record-keeping is important here. Save digital copies of your receipts in one place.

How Does a Flexible Spending Account (FSA) Work?

A flexible spending account (FSA) also lets you set aside pre-tax money. There are two main types.

A health care FSA covers medical, dental, and vision costs. Its contribution limit is adjusted for inflation each year, so check your enrollment materials for the current number.

A dependent care FSA covers child care and care for other dependents so you can work. Its limit is set per household, not per person, so married couples need to coordinate their elections.

The big catch with FSAs is the "use it or lose it" rule. Money you don't spend by the deadline is usually forfeited.

Some plans soften this with a carryover or a grace period. If your plan allows carryover, you can roll a limited amount into the next year. The IRS caps that amount, and the cap rises with the FSA limit over time.

So be realistic when you choose your FSA amount. Base it on expenses you're confident you'll have, like regular prescriptions, glasses, or daycare.

Also note that a general health care FSA generally makes you ineligible to contribute to an HSA. Some employers offer a "limited purpose" FSA for dental and vision that works alongside an HSA.

What Is a Health Reimbursement Arrangement (HRA)?

A health reimbursement arrangement (HRA) is funded by your employer, not you.

Some employers add money to an HRA when you complete wellness activities. Examples include an annual physical, a health screening, or logging exercise. If your employer offers this, it's worth doing. It's free money for health costs.

HRAs have one big limit. They usually stay with the employer. If you leave your job, you may lose the remaining balance.

Should I Use My HRA, FSA, or HSA First?

If you have more than one account, the order you spend from them matters.

As a general rule, it often makes sense to use HRA and FSA money first. These funds may disappear if you leave your job or miss a deadline.

Your HSA money, on the other hand, never expires. Letting it grow while you spend other funds first can be a smart move.

Your employer's plan documents may also set the order for you. Some HRAs are written so that HRA funds must be used before FSA funds. Read the details before you choose your amounts.

What Should I Review in My 401(k) During Open Enrollment?

Open enrollment is also a good time to review your 401(k), 403(b), or 457 plan. Many plans let you change contributions at any time, but this yearly check-in keeps you on track.

How Do I Get the Full 401(k) Employer Match?

If your employer matches your contributions, make sure you contribute at least enough to get the full match (unless your specific circumstances dictate otherwise).

Missing part of the match is like turning down part of your salary. It's basically free money that you're leaving on the table if you don't contribute up to the match.

Also check your plan's vesting schedule. Vesting decides when your employer's contributions become fully yours. If you plan to leave in a year or two, know how much of the match you'd keep.

How Much Can I Contribute to My 401(k) Each Year?

The IRS sets an annual limit on how much you can contribute to a 401(k), 403(b), or 457 plan. It usually adjusts that limit for inflation each year.

If you're 50 or older, you can add a catch-up contribution on top of the standard limit. If you're between 60 and 63, a higher catch-up amount may apply.

New limits for the coming year are usually announced in the fall. Check the current numbers on the IRS website or in your plan materials before you set your contributions.

Keep in mind that some limits are shared across plans and some aren't. For example, 401(k) and 403(b) deferrals share one limit. A governmental 457 plan generally has its own separate limit. If you have access to both, you may be able to save much more than you think.

Some 457 plans also offer a special catch-up in the three years before your normal retirement age. Ask your plan administrator if this applies to you.

One more change worth knowing: under SECURE 2.0, higher earners must now make catch-up contributions as Roth contributions. If your prior-year wages from your employer were above the IRS threshold, your catch-up dollars will go in after-tax.

Should I Make Roth or Traditional 401(k) Contributions?

Most plans now offer both pre-tax (traditional) and Roth contributions.

Pre-tax contributions lower your taxable income today. You pay taxes when you withdraw the money in retirement.

Roth contributions don't lower your taxes now. But qualified withdrawals in retirement are tax-free.

The right mix depends on your current tax bracket and what you expect your tax situation to look like later. Many people benefit from having money in both types of accounts. That gives you more control over your taxes in retirement.

What Is a Mega Backdoor Roth, and Does My Plan Allow It?

Some plans allow after-tax (non-Roth) contributions above the normal employee limit. Some also allow in-plan Roth conversions.

When a plan offers both, you may be able to use a strategy called the "mega backdoor Roth." It lets you move much more money into Roth savings than the standard limits allow.

Not every plan has these features. Check your plan documents or ask HR. If yours does, it can be a powerful tool for high earners.

How Should I Invest the Money in My 401(k)?

Take a few minutes to review how your retirement money is invested.

Ask yourself if your allocation still matches your goals and your comfort with risk. Also check if your plan's investment options give you enough diversification.

Pay attention to fees. Look at each fund's expense ratio and any plan-level fees. Small differences in fees can add up to a lot over decades.

Can I Roll an Old 401(k) or IRA Into My Current Employer's Plan?

If you have a 401(k) from a former employer, you may be able to move it into your current plan.

First, read your plan's Summary Plan Description to see if it accepts rollovers. Then compare the fees and investment options with your other choices, like leaving the money where it is or moving it to an IRA.

Rolling pre-tax IRA money into your employer plan can have an added benefit. It may clear the way for backdoor Roth IRA contributions without the tax complications of the pro-rata rule.

Is It a Good Idea to Take a 401(k) Loan or Hardship Withdrawal?

If you think you may need to tap your retirement plan, learn the rules before you do.

Every plan is different. Look at the limits on how much you can borrow, the repayment schedule, the interest rate, and what happens if you leave your job with a loan balance.

Hardship withdrawals can bring taxes and penalties. 401(k) loans can slow your long-term growth. In most cases, these should be a last resort.

Do I Need Life Insurance Beyond What My Employer Offers?

Many employers offer basic group life insurance for free, often equal to one or two times your salary. They may also let you buy more.

Group life insurance has real advantages. It usually doesn't require a medical exam. That makes it convenient, and it can be valuable if you have health issues that would make a private policy expensive or hard to get.

But there are trade-offs.

The biggest is portability. If you leave your job, your coverage may end or become much more expensive. If your health has changed by then, buying a new policy could be harder.

Coverage limits are another concern. The maximum amount your employer offers may not be enough to replace your income, pay off your mortgage, and fund your kids' education.

Cost matters too. Group rates are often based on age bands and can rise quickly as you get older. If you're young and healthy, a personally owned term policy may cost less and stay with you no matter where you work.

A common approach is to use group coverage as a supplement, with a personal life insurance policy as the foundation.

Is Employer Long-Term Disability Insurance Enough?

Disability insurance protects your income if an illness or injury keeps you from working. For many people, their ability to earn an income is their biggest financial asset.

Most group long-term disability plans replace a portion of your salary, often around 60%, up to a monthly cap. If you earn a high income or receive bonuses or commissions, the cap and the definition of "salary" can leave a large gap.

What Is the Difference Between Own-Occupation and Any-Occupation Disability Insurance?

This detail matters more than most people realize.

An "own-occupation" policy pays if you can't do the duties of your specific job. An "any-occupation" policy pays only if you can't do any job you're reasonably suited for. Some policies use a modified version in between.

A surgeon, an attorney, or a business owner may need a stronger definition than a group plan offers.

Should I Pay My Disability Insurance Premiums With After-Tax Dollars?

If your employer pays the premiums, your disability benefits are generally taxable as income. That means your actual take-home benefit could be much smaller than it looks on paper.

If you pay the premiums with after-tax dollars, the benefits are generally tax-free. Some employers let you choose how premiums are paid. A personal disability policy, paid with after-tax money, can also fill the gap.

What Is the Elimination Period in Disability Insurance?

Most disability policies have an elimination period. This is the waiting time before benefits start, often 90 days or more.

Your emergency fund needs to carry you through that period. Check your policy's waiting period and make sure your savings can cover it.

How Are Stock Options and RSUs Taxed?

If your employer grants you equity, open enrollment is a good reminder to review it.

Start with the basics. Read your employer's stock plan, your grant agreement, and any related forms.

Then make sure you understand the key details. These include your vesting schedule, grant dates, exercise dates, holding periods, and any clawback provisions.

Each type of equity has different tax rules. Incentive stock options (ISOs) can trigger the alternative minimum tax. Non-qualified stock options (NQSOs) are generally taxed as ordinary income when you exercise. Restricted stock units (RSUs) are generally taxed as income when they vest.

Withholding on equity income is often too low for higher earners. That can lead to a surprise tax bill in April. A plan for when to exercise, sell, or hold can help you manage both taxes and concentration risk.

What Employee Benefits Do People Often Overlook?

Many employers now offer benefits that go well beyond health insurance and a 401(k). These often get missed.

Common examples include:

• Student loan repayment assistance
• Legal services plans
• Travel and commuter benefits
• Fitness and wellness stipends
• Fertility and family-building benefits
• Paid parental leave
• Mental health counseling

If you expect to use any of these services, check what your employer covers before you pay on your own. Read the details, note any limits, and use these benefits to their full extent.

It's also worth checking for state-specific rules. Some states have their own paid family leave programs, disability insurance, or tax treatment for certain benefits. These can affect how you coordinate your employer's options.

How Should Business Owners Handle Open Enrollment Through a Spouse's Employer?

Many households have one spouse with employer benefits and one who's self-employed or owns a business.

In that case, the employed spouse's open enrollment may be the household's main source of health insurance. It deserves extra attention.

Compare the cost of family coverage through the employer with buying coverage through your business or the marketplace. Also look at how each choice affects your eligibility for an HSA and your ability to deduct premiums.

If you own a business, this is also a good time to review the benefits you offer yourself and your team. The same questions in this guide apply to your own retirement plan and insurance coverage.

What Should I Do to Prepare for Open Enrollment?

You don't need to become a benefits expert. You just need a simple process.

Here's a practical way to work through it:

• Read the summary of changes your employer sends. Note anything new, removed, or more expensive.
• Review any life changes from the past year and any you expect next year.
• Compare health plans based on total cost, not just premiums.
• Set your HSA or FSA amounts based on realistic expenses and the new limits.
• Confirm you're getting the full 401(k) match, and review your pre-tax and Roth mix.
• Check that your life and disability coverage still fits your needs.
• Look for fringe benefits you aren't using yet.
• Update your beneficiaries on retirement accounts and life insurance.

Write down the deadline and give yourself time before it. Rushed decisions are where most mistakes happen.

If your benefits feel overwhelming, that's normal. A financial planner can help you see how your benefits fit with your taxes, savings, insurance, and long-term goals. That bigger picture often leads to better decisions than reviewing each benefit on its own.

Frequently Asked Questions About Open Enrollment

What happens if I miss open enrollment?

If you miss the deadline, you'll usually keep your current elections or get default coverage. Some benefits, like FSAs, may not renew unless you actively enroll. In most cases, you can't make changes until next year unless you have a qualifying life event.

Can I change my benefits outside of open enrollment?

Generally, only if you have a qualifying life event. Common examples include marriage, divorce, the birth or adoption of a child, or losing other coverage. You usually need to make changes within about 30 days of the event. Many retirement plans let you change your contribution rate at any time.

Do I have to re-enroll in my FSA every year?

Usually, yes. Most employers require you to make a new FSA election each year. If you don't, your contributions may stop. Check your employer's rules.

Can I have an HSA and an FSA at the same time?

You generally can't contribute to an HSA if you have a general-purpose health care FSA. However, you can usually pair an HSA with a limited-purpose FSA for dental and vision costs. A dependent care FSA doesn't affect HSA eligibility.

How much can I contribute to an HSA?

The IRS sets HSA limits each year, with separate amounts for self-only and family HDHP coverage. If you're 55 or older, you can add a catch-up contribution. Employer contributions count toward these limits, so include them when you choose your payroll amount.

Is a high-deductible health plan a good idea?

It can be, especially if you're healthy, have a strong emergency fund, and want to use an HSA. It may not be the best fit if you expect high medical costs or would struggle to pay the out-of-pocket maximum.

Is employer-provided life insurance enough?

For many people, no. Group coverage is often limited to a multiple of your salary and may not follow you if you leave your job. Many people use it as a supplement to a personally owned term policy.

Are disability insurance benefits taxable?

It depends on who pays the premiums. If your employer pays with pre-tax dollars, benefits are generally taxable. If you pay with after-tax dollars, benefits are generally tax-free.

Should I roll my old 401(k) into my new employer's plan?

It depends on fees, investment options, and your other goals. Rolling into your new plan can simplify your accounts and may help with backdoor Roth IRA contributions. Compare your plan with an IRA and your old plan before you decide.

How do I know if my plan offers a mega backdoor Roth?

Check your Summary Plan Description or ask HR. Your plan needs to allow after-tax contributions and either in-plan Roth conversions or in-service withdrawals.

This article is for educational purposes only and isn't intended as tax, legal, or investment advice. Your situation is unique, so talk with a qualified professional before making decisions about your benefits. Elevation Financial is a registered investment advisor.