Open Enrollment Is a Financial Planning Opportunity: What to Review Before You Enroll
It's that time of year again.
An email lands in your inbox reminding you that open enrollment is coming. You log into your benefits portal, click through a few screens, and—if nothing major happened this year—there can be a temptation to choose “same as last year” and move on.
But a lot can change in a year.
Maybe your income increased. You got married. Had a baby. Changed medications. Started thinking more seriously about retirement. Built up your savings. Took on a mortgage. Or maybe nothing dramatic changed at all—but your employer's benefits did.
That's why open enrollment deserves a little more attention than a quick click through your benefits portal.
Your employee benefits are part of your financial plan.
And the decisions you make during open enrollment can affect everything from your monthly cash flow and taxes to how well your income and family are protected.
Before you make your elections this year, here are a few areas worth reviewing.
1. Don't Look at the Health Insurance Premium Alone
When comparing health plans, it's easy to focus on the number coming out of each paycheck.
But the lowest premium doesn't necessarily mean the lowest overall cost.
Look at the bigger picture: your deductible, out-of-pocket maximum, copays or coinsurance, prescription coverage, provider network, and the healthcare you realistically expect to use in the coming year.
Then consider how those potential costs fit into the rest of your financial life.
For example, if you choose a plan with a higher deductible, do you have enough savings available to comfortably cover that deductible if something happens early in the year?
The goal isn't necessarily to choose the plan with the lowest premium or the richest benefits.
It's to understand what you're choosing—and why it makes sense for you.
2. Take Another Look at Your HSA or FSA
If your employer offers an HSA or FSA, open enrollment is a good time to revisit how you're using it.
While both accounts can help you set aside money for qualified healthcare expenses, they work differently.
A Health Savings Account (HSA) is generally available when you're enrolled in an eligible high-deductible health plan. Contributions can offer tax advantages, unused funds can roll over from year to year, and the account belongs to you even if you change employers.
A Flexible Spending Account (FSA) also allows you to set aside pre-tax dollars for eligible expenses, but the rules around eligibility, contribution limits, and unused balances are different and depend in part on your employer's plan.
Don't simply select the same contribution you made last year.
Think about the healthcare expenses you expect in the year ahead and how these accounts could fit into your broader cash-flow and tax strategy.
3. Know What Your Employer Life Insurance Actually Covers
Seeing “life insurance” listed in your benefits package can create a sense that this box is already checked.
But it's worth looking closer.
Some employers provide a basic amount of life insurance automatically—perhaps a fixed dollar amount or a multiple of your salary—and allow you to purchase additional coverage.
Ask yourself:
How much coverage do I actually have?
Am I paying for supplemental coverage?
Would this amount be enough for the people who depend on my income?
And there's another important question: What happens to that coverage if I leave my employer?
Employer-provided coverage can be a valuable benefit, but it isn't always designed to serve as your entire life insurance strategy. Understanding what you already have can help you identify whether there are gaps that should be addressed elsewhere.
4. Review Your Disability Coverage
Your ability to earn an income may be one of your most valuable financial assets.
Yet disability coverage is often one of the least understood benefits in an employee package.
Take a look at both short-term and long-term disability coverage.
How much of your income would the benefit replace? Is it based on your base salary or total compensation? How long is the waiting period before benefits begin? How long could benefits continue? Is there a maximum monthly benefit?
For higher earners in particular, a plan that replaces a percentage of salary may still leave a meaningful gap if the policy also has a monthly benefit cap.
This is where looking at the actual numbers—not simply seeing “60% disability coverage” and moving on—becomes important.
Ask yourself what your household finances would look like if your paycheck suddenly became smaller for several months or several years.
5. Look at the Benefits You Usually Skip Over
Open enrollment portals can contain a long list of supplemental benefits.
Accident coverage. Critical illness insurance. Hospital indemnity. Legal benefits. Identity protection. Dependent care benefits. Employee assistance programs.
It's easy to either select everything or ignore everything.
Neither approach is particularly strategic.
Instead, understand what each benefit actually covers, what it costs, and whether it fills a meaningful need in your financial plan.
Not every benefit will make sense for every person. The goal is to make intentional decisions rather than assuming every optional benefit is either necessary or unnecessary.
6. Check Your Beneficiaries
This might take only a few minutes, but it can be one of the most important items on your open enrollment checklist.
Review the beneficiaries listed on your employer-sponsored life insurance and retirement accounts.
Do they still reflect your wishes?
Marriage, divorce, births, deaths, and changes in relationships can all be reasons to revisit beneficiary designations.
And remember: beneficiary designations are an important part of your broader estate plan. Your accounts, insurance policies, and estate documents should be reviewed together to make sure they're telling the same story.
7. Revisit Your Retirement Contributions
Your retirement plan may not technically require an annual election in the same way your health insurance does, but open enrollment is a great reminder to review it.
If your income increased this year, should your contribution increase too?
Are you contributing enough to receive the full employer match, if one is offered?
Does your current contribution still align with your retirement goals?
And if your employer offers both traditional and Roth contribution options, do you understand how each fits into your broader tax strategy?
Small changes made consistently can have a meaningful impact over time.
Before You Click “Same as Last Year”...
Open enrollment doesn't have to become a major financial project.
But it does deserve more than an automatic renewal.
Your health insurance affects your cash flow and potential healthcare expenses.
Your HSA or FSA can affect your tax strategy.
Your disability insurance helps protect your income.
Your life insurance helps protect the people who depend on you.
Your retirement elections influence your future.
And your beneficiaries connect your workplace benefits to your estate plan.
“They're not just HR decisions. They're financial planning decisions.”
So before you click “same as last year,” take a few minutes to look at the whole picture.
Ask what changed.
Ask what you actually have.
Ask whether there are gaps.
And most importantly, ask whether the benefits you're choosing still support the financial life you're building.
Because a good financial plan isn't just about what happens inside your investment accounts.
It's about making sure the financial decisions you're already making—including the ones you make at work—are working together.
The opinions voiced are for general information only and are not intended to provide specific advice or recommendations for any individual. The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation.