By Matthew Gaude & Shawn McGuire
While we’ve always known the importance of having healthcare coverage, 2020 is driving that point home in a new way. In a time when we can’t get through a conversation without mentioning COVID-19, it’s important to consider how sickness of any kind could disrupt your life and your finances. How robust is your medical insurance? If you need a hospital stay, will you have enough in personal savings to pay for what your insurance doesn’t cover? What about your family—if something were to happen to you, would they be taken care of financially?
These are heavy questions, we know, but ones that could make all the difference if a health event impacts your family. In the past, you may have received your employer’s open enrollment documents and just gone with what you’ve always had or randomly chosen from a menu of options. We urge you not to do that this year. In light of our current circumstances, use your benefits open enrollment period to research coverage and the types of insurance available, and make an informed choice that will help you find peace of mind. Here are some tips to help you do just that.
Ask About Supplemental Or Voluntary Benefits
Even if you are already set up with medical coverage, it’s worth the effort to do a cost-benefit analysis on supplemental coverage. Many employers offer supplemental health insurance at affordable prices that can bridge the coverage gap that 44% of retirement plan participants have. (1) Supplemental insurance can take care of everything from hospital stays to accidents to disability coverage to cancer treatment. For example, some supplemental hospital insurance plans will provide you with a daily benefit amount paid directly to you and even cover the copays on a set number of doctor visits. In a trying situation, this cushion can ease your stress considerably.
Consider An HSA
If you are enrolled in a high-deductible health plan, you have access to a health savings account (HSA). An HSA allows you to make pre-tax contributions and tax-free withdrawals for qualified medical expenses, plus the added benefit of your funds growing tax-free. Many employers offer HSA contribution matches similar to a 401(k) and your funds roll over year to year, even if you switch jobs or no longer have a high-deductible health plan. And if you don’t end up using the money for day-to-day healthcare expenses, HSAs provide an efficient way to pay for healthcare in retirement. You can invest your HSA money in ETFs or mutual funds once you have a certain amount in your account, allowing you to build your own separate healthcare nest egg for retirement. Talk to your HR department to find out if you are eligible for an HSA account.
Evaluate Life Changes
Even though much is uncertain right now, what life changes do you hope to make next year? Will you be getting married? Adding to your family? If so, consider increasing your coverage on your group life insurance or adding coverage for your spouse. If your dentist has mentioned that you will need some work on your teeth soon, you may want to increase your HSA contributions or ask about supplemental dental insurance. Have you or someone in your family experienced some health issues? A different plan option might work better for you for the upcoming year.
Weigh Your Options
Many companies make both minor and major changes in the benefits they offer from year to year. Take a look at last year’s details, compare them to this year’s updates, and determine what makes the most sense for you, not just financially, but also considering your life circumstances. Also, if there have been major changes and you are facing considerably higher costs, look into your spouse’s health plan. While it’s usually more cost-effective to obtain coverage through your employer, your spouse may have better coverage through their company.
In the midst of what sometimes feels like a world gone mad, take some time to prioritize your employee benefits. Your company provides these as a thank-you for your hard work, so make sure you maximize them and use your open enrollment period to make decisions that align with your life.
And if you haven’t heard anything about open enrollment, reach out to the human resources department at your work to find out when it’s happening and if there is a scheduled meeting or webinar to highlight this year’s benefits. Remember, your HR department is there to walk you through these decisions and answer any questions you may have. At Live Oak Wealth Management, we are also here to help you navigate the details and make choices that work in tandem with the rest of your financial plan. Please don’t hesitate to call our office at 770-552-5968 or email [email protected]. Or, if you prefer, you can simply click here to schedule an appointment online.
Matthew Gaude is an *investment advisor representative and the co-founder of Live Oak Wealth Management, a financial services firm in Roswell, Georgia. He serves the planning and investment needs of corporate employees, those approaching or in retirement, and 401(k) plan sponsors. Working first as a commodity broker and then as a Business Development Manager for a national broker-dealer in previous jobs, he has the insight and experience to help clients understand the complexities of the market and implement strategies to minimize risk. To learn more about Matthew, connect with him on LinkedIn or visit www.liveoakwm.com.
Shawn McGuire is a financial advisor and the co-founder of Live Oak Wealth Management, a financial services firm in Roswell, Georgia. He serves the planning and investment needs of corporate employees, those approaching or in retirement, and 401(k) plan sponsors. He has worked in financial services since 2002 in positions ranging from financial advisor to stock broker and portfolio manager. As a CERTIFIED FINANCIAL PLANNER™ professional, he is trained to help clients with virtually all their financial needs. To learn more about Shawn, connect with him on LinkedIn or visit www.liveoakwm.com.
Securities offered through American Portfolios Financial Services, Inc., member FINRA/SIPC. Investment advisory services offered through *American Portfolio Advisors, Inc., a SEC Registered Investment Advisor. Live Oak Wealth Management, LLC is independently owned and not affiliated with APFS or APA.
Any opinions expressed in this forum are not the opinion or view of American Portfolios Financial Services, Inc. (APFS) or American Portfolios Advisors, Inc. (APA) and have not been reviewed by the firm for completeness or accuracy. These opinions are subject to change at any time without notice. Any comments or postings are provided for informational purposes only and do not constitute an offer or a recommendation to buy or sell securities or other financial instruments. Readers should conduct their own review and exercise judgment prior to investing. Investments are not guaranteed, involve risk, and may result in a loss of principal. Past performance does not guarantee future results. Investments are not suitable for all types of investors. Seek tax advice from a tax professional.