By David Conti, Next Avenue
For employees, it’s not pumpkin spice season right now, it’s Open Enrollment season. That means it’s time to make the health and retirement plan choices that will be right for you in 2022.
It isn’t easy, and many workers feel uneasy about choosing wisely. In its 2021 State of Work in America survey of 1,500 U.S. employees, the professional services firm Grant Thornton found that 36% of workers weren’t confident they’d chosen the best medical plan. And 80% of employees surveyed by Lincoln Financial said they wish they better understood some aspect of their retirement plan.
Employees can expect to see rising out-of-pocket health costs through their employer coverage in 2022, including premium increases of 4% to 5%. Some higher-paid workers will be asked to pay more for their health insurance than lower-paid workers. Roughly a third of employers surveyed by the benefits consulting firm Willis Towers
But you may be in for a few pleasant surprises.
“As employers continue to compete for talent, many are adding a number of new benefits to their lineup for next year including resources and additional paid leave for caregivers, surgery Centers of Excellence [more on this below], financial planning and expanded mental health benefits, virtual physical therapy and other digital health programs,” says Erin Tatar, senior vice president of workplace consulting at Fidelity Investments.
Some employers have added an emergency savings account option through payroll deductions, too. About 23% of employees are currently offered one, according to the Employee Benefit Research Institute.
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Tatar’s advice: “Take time to attend virtual benefits fairs to review the growing list of health, wealth and other benefits from your employer this fall.”
Getting the Right Health Coverage
For many older workers, access to affordable health care coverage is the No. 1 employee benefit they seek. Before you enroll in a health plan for 2022, ask yourself: How much did I pay in premiums this year? How many trips to the doctor, hospital or emergency room did members of my household make? What else did we spend out-of-pocket for health care in 2021?
Then, start comparing the features and prices of your options, since they can vary significantly. Compare the benefits, rules, restrictions and costs such as co-pays, annual deductibles and out-of-pocket maximums. You may well need to deal with Alphabet City, deciding among a high deductible health plan (HDHP) with a health savings account or HSA (an HSA lets you save money in a tax-advantaged account and then withdraw cash tax-free to pay for qualified medical expenses), a health maintenance organization (HMO) plan and a preferred provider organization (PPO) plan.
Don’t assume that whatever health plan and benefits you had in 2021 will be the best for you in 2022. Your plan may have changed. Your circumstances may have changed; for example, if your last son or daughter is now in college, it might make sense to buy a university plan for that child while you and your spouse change from family coverage to “employee + 1” coverage.
And don’t miss out on the panoply of health benefits in your plan choices, especially new benefits that can save you money.
“An often-overlooked benefit for older workers is a surgery Centers of Excellence program,” says Tatar. Here, if you are planning to have surgery — such as spine, knee, hip or bariatric surgery — the company will arrange for you to receive care from a Center of Excellence to receive top notch and affordable treatment.
“They will often provide more generous benefits coverage for patients who participate and will cover any upfront travel costs for you and a companion if the best care is outside your community,” Tatar notes.
If you’re in good health, says Seth Mullikin of Lattice Financial in Charlotte, N.C, “an HSA (with a high deductible plan) generally makes sense. From a financial planning perspective, it gets better if you can fund these costs from personal savings and let your HSA money grow tax-free over time.”
The HSA also lets you pay for health expenses in the future, even into retirement, adds Mullikin. In 2022, employees with high-deductible health plans will generally be allowed to contribute up to $3,650 in an HSA; as much as $7,300 for family coverage.
Time for a Second Opinion?
You may also be able to sign up to get a second opinion as part of your health coverage. Some employers have even expanded eligibility to receive a second medical opinion for an employee’s parents and grandparents.
“As we get older, the risk of having a serious health event increases. If this happens to you, it’s natural to seek a second opinion. Some employers we are working with now want to give employees better peace of mind, so they offer ‘second opinion’ benefits,” notes Tatar. “Then they can provide an entire medical diagnosis and treatment plan as an option for you to discuss with your doctor. And it is usually covered one hundred percent.”
Mental Health Coverage
The pandemic and revelations by star athletes including tennis’ Naomi Osaka and gymnastics’ Simone Biles, has made taking care of our mental health a priority.
More than three-quarters of large employers surveyed by the nonprofit Business Group on Health say access to mental health care is now a top priority. In 2021, 62% of employers this group surveyed added mental health benefits.
To that end, check to see if your employer is incorporating resiliency and mindfulness training and mental health options such as telehealth counseling into its benefits offerings.
You may also want to look into getting disability insurance coverage through work.
“Your chance of being disabled is much greater than the risk of premature death,” says wealth adviser Graham Ewing of Financial Consulate in Hunt Valley, Md. “If your employer is offering disability insurance, consider it.”
But, he adds, “you need to understand how disability is being defined by the insurance company. For example, some policies will pay out benefits for only two years if you can’t do your current job. Others won’t pay beyond two years if you are not completely incapacitated. So, find out what’s covered and what’s not.”
Group disability coverage typically pays up to 60% of salary if you can’t keep working at your job or switch to another position and you expect to be disabled for a year or more.
If you are caring for an aging loved one or someone with a serious illness, inquire about work/life balance or employee assistance programs. Some companies are now offering caregiver navigation benefits which connect you with experts to help find local elder care resources or options for assisted living or nursing homes.
If you’re a caregiver, you’ll likely need some give and take with your schedule, so see what HR will do for you.
Says Tim Glowa, a principal and leader of Grant Thornton’s employee listening and human capital services offerings: “Everyone has a unique set of responsibilities outside of the office. As companies return to the office, it will be more crucial than ever to give people the time they need to take care of what’s important at home.”
Financial Wellness and Retirement Planning
Open Enrollment season may also be a good time to revisit your retirement plan and do a “financial check-up,” similar to getting an annual wellness physical from your doctor, says Ewing.
“You may want to revisit your risk tolerance, especially if you are concerned about gyrations in the stock market,” he adds.
Mullikin notes that many of his 50+ clients are worried about having enough money to retire comfortably. “So, our first order of business is to find out if they can increase, or max out, their 401(k) contributions,” he says.
Another way to save more for retirement when you’re over 50 is to make catch-up contributions to your retirement plan.
These let you put in up to $6,500 more than others can in a 401(k) or 403(b) plan or up to $1,000 in an Individual Retirement Account. “Plus, you and your spouse (if they are also enrolled) can make catch-up contributions of up to a thousand dollars to your HSA at age fifty-five,” notes Mullikin.
Reimbursing Your Remote Work Expenses
If you’ll be working remotely in 2022, even part of the time, check with your HR department about getting reimbursed for home office expenses like a standing desk, a Wi-Fi extender, a headset and any ergonomic equipment designed to keep you healthy and productive.
About a fifth of employers the benefits consulting firm Mercer surveyed said they’d be adding or enhancing reimbursement for off-site workers in 2021, including subsidizing ergonomic furniture.
Some firms pay for setups of $200 to $300. Others offer partial ongoing reimbursement for an employee’s home internet service and cell service.