Navigation Series : Employee Benefits
According to the Society of Human Resource Management's 2010 Employee Benefits Survey released in June of 2011, 72 percent of HR professionals said "the benefits at their companies had been affected ‘in some way' due to the economic downturn that began in 2008." And while 79 percent said "they were reviewing their benefits offerings annually," 10 percent reported that they were reviewing them more than once a year.
One notable SHRM statistic stated that 10 percent of respondents said "they plan to reduce or eliminate employer match for 401(k)s in the coming year."
Employee benefits are a very important component of an individual's financial plan and they should be coordinated and managed towards achieving financial wellness. That's why VisionQuest Wealth Management helps its clients review all available benefit choices to determine how such choices fit into your overall financial strategy.
Here are some of the items that we review:
Retirement Plans: Most companies will alert you if they are changing investment options and/or matching contributions. On a quarterly basis VisionQuest reviews each client's 401(k) investment options and recommends appropriate changes with the asset allocation. If you receive notice of changes occurring within your plan, VisionQuest needs to be notified in order to stay up-to-date on each client's plan offerings to ensure we maximize success within the plan for you.
Health Care Plans: As you're reviewing health plan choices, think of all the health issues you've experienced throughout the year. It could be a diagnosis of a chronic disease, the birth of a child, or the need to place a new spouse/partner on your coverage. A new spouse or child can usually be added with proper notice throughout the year, but open enrollment is a good time to review all current and future situations. If you're healthy, you might want to opt for a lower-premium plan that requires higher co-pays or deductibles and try to put more into your retirement savings. Just try not to choose any plan that limits lifetime benefits to $1 million or less - you'd be surprised how little time it takes to get there for an accident or serious illness.
Prescription Plan: You should look at your prescription needs and find the best insurance choice to cover them. While you may have a co-pay of $5 to $10 for generic drugs, will your plan pay for a brand-name drug that you really need, or will you get stuck with a co-pay of $50 or more? Make sure you understand the tier system within your pharmaceutical plan and pick the right one for you based on your current or expected needs.
FSA/HSA Options: A flexible spending account (FSA) is an account some employers offer so workers can deposit funds on a pre-tax basis to pay their out-of-pocket health and dependent care costs. However, workers need to make a good estimate on the funds they'll use by year-end because excess funds can't be carried over. Health Savings Accounts (HSAs) allow workers to save pre-tax dollars for health care costs without the "use it or lose it" restrictions in FSAs, though they require the enrollment in a qualified high-deductible health plan, which more companies are moving toward. These dollars often can be directed into different investment accounts and used on a tax-favored basis in retirement. In 2010, individuals can deposit up to $3,050 in their HSA, and those with family coverage can deposit up to $6,150. Individuals above age 55 can add another $1,000 in contribution on both individual and family coverage.
At the onset of each client relationship, VisionQuest takes the time to review the benefit options available and helps each client get enrolled in the right choices. If things are changing in your life or your benefits, we need to sit down and go through the same process during your next open enrollment period. To get the ball rolling, simply send us the information your Human Resources team sends to you and we'll make sure you're set-up for success in the coming year.