Research your company’s health insurance options?

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It’s not an easy task. One hour of your time can be worth thousands of dollars. An ex-paramedic and firefighter who is now a financial planner, explains how to maximize your benefits.

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When I was shopping for a new plan in health insurance, I saved $3,000 over the years. After much research, my wife and I chose a plan that offered higher premiums but lower out of pocket costs. We were $3,000 more financially secure after signing up for an indemnity policy and the $1,000 bonus we received for signing up.

What was the time it took to do this? It took 1 hour of research and planning. This is an excellent hourly rate.

Many corporate executives and top-level managers prefer to stick with the status quo over looking into the details. I get it.

Before you sign up for health insurance at work, read this

They work long hours and have endless to-do lists because of their demanding jobs. Open enrollment documents can be confusing due to the multitude of acronyms and letters. Do I choose to enroll in an HDHP or a PPO? Are I eligible for an HSA What are the requirements for STDI or LTDI?

Prior to becoming a wealth planner, in my eight years as a firefighter/paramedic, I saw people from every walk of life battling injuries, illnesses and loss. Although we don’t want this to happen, having the right insurance (e.g., medical, life and disability) can make a big difference in your financial health and well-being.

It takes research and time to do it right, just like other tasks. Here are four tips for those who want to enroll in corporate benefits plans this autumn.

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The Right Health Plan is a Top Priority

Let’s take a look at three types of common health insurance. Let’s see how they work.

A Health Maintenance Organization (HMO), plan is usually the most affordable but with the least flexibility. HMOs are contracts that allow a group of doctors to provide medical care. They emphasize cost control and preventative care in order to offer low premiums as well as lower out-of-pocket costs. To coordinate care, keep costs down and to see other doctors within the network, you will need to work closely with your primary doctor, except in emergencies. To see a specialist, you will need a referral.

A Preferred Provider Organization is an association that includes medical providers. The PPO works with insurance companies to offer discounted services. This helps keep costs down when you are seeking care in this network. A PPO allows you to go wherever you want, without the need for a referral. However, there will likely be higher out-of pocket costs.

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A High Deductible Healthcare Plan (HDHP), as its name suggests, has lower premiums and higher deductibles. These plans are often attractive to those with few health problems who will likely not reach the deductible amount. The deductible amount for 2022 must be at minimum $1,400 per person or $2,800 per family.

Register for Disability Insurance

There are two types, short-term and long-term, of disability insurance coverage. Numerous companies offer a group benefit for employees at no cost. Individuals may choose to pay out-of-pocket for this coverage.

No matter what your choice, long-term disability insurance is a great option for working professionals. This is not something you should ignore as you will never be disabled. Car accidents can occur at any moment, and could affect your vision, hearing, and cognitive abilities. LLIS shows that a 30-year old is four times more likely to be disabled than to die in an accident before the age of 65.

The One Type of Insurance Every Employee – Especially the Younger – May Need

When you are unable to work because of illness or injury, disability insurance replaces part of your income. Standard policies typically cover 60% of your base salary. They may not include bonuses, commissions or incentive pay. You may also have a monthly cap of $10,000 on your benefits.

Combining your cash savings with a policy may be enough to save you money. Consider purchasing additional coverage through your company, or a private insurance company. If you don’t have several hundred dollars saved for an emergency, I recommend short-term disability insurance. These plans can be used to bridge the gap between long-term disability insurance and short-term waiting periods (between 7 and 30 days).

Choose the Right Life Insurance Amount

Life insurance is almost always necessary if your family relies on you for income. As a group benefit, many employers offer a minimum amount of money — typically 1x-3x your salary. While this is a good start, you’ll likely need more if your family has children or a mortgage. How much? The simple rule of thumb to cover debts, ongoing income for family members who are still living, and education costs for children is to keep your earnings between 10x-12x. A financial professional can perform detailed, customized calculations for you.

Many companies offer additional insurance to their employees. This is a great benefit for people who are not eligible for private policies. A policy purchased from an outside company is a good option for healthy people. You can save money and it will be transferable if your job is terminated.

Do not miss out on any additional benefits

Companies are offering significant benefits that were not previously part of their traditional offerings.

According to the MassMutual Financial Wellness Trends Study (February 2020), 6 out of 10 companies offer or have implemented financial wellbeing programs. Some employers offer counseling, vacation buy up plans, dependent care, Flexible Spending Accounts, tuition reimbursement and other specialized benefits.

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Open enrollment can slip up during busy times of the year. Take one hour to review your options and make informed choices about your benefits. Consult a specialist to ensure that this area of your financial planning is well-organized.