Episode Summary:
In this week’s episode, we get ready for benefits enrollments, which happens at most companies each fall, by discussing what plans are typically available to colleagues and how to pick the right ones. We combine topics we have covered in previous episodes into a single benefits crash course. First, we break down how medical insurance works, what considerations to think about, and how to select the right plan. We then dig into all of the different types of benefits your company, such as critical care insurance, life insurance, Health Savings Accounts (HSAs), Flex Spending Accounts (FSAs), Dependent Care Flexible Spending Accounts (DCFSAs), Deferred Compensation Plans or 457Bs, employee stock discount programs, and other discount programs.
Episode Notes:
For most companies, the October and November timeframe is when employees can select their benefit options for the next year. It can be a complicated and cumbersome process, but the most frustrating part is often evaluating the medical plans. They are by design complicated. The rest are simpler than they seem.
Here are the common types of benefits programs:
- Medical, prescription, dental, eyecare
- Additional medical such as critical-care of hospital insurance
- Health Savings Accounts/Flex Savings Accounts/Dependent Care Flexible Spending Accounts
- Life Insurance
- Retirement and Savings Plans
- DCP
- Employee stock discount programs
- Discount programs (mattresses, life insurance, etc.) – I have a strong POV here!
We review each of the above types of options and consideration at a high level, and reference past episodes where we cover these topics in more detail.
Top 3 Takeaways:
- Benefits season is exciting!! Leveraging the right benefits can be lucrative and valuable, so spend the time researching the right decisions for you.
- Taking advantage of these benefits is important, but don’t beat yourself up too much trying to squeeze every dollar of value.
- For benefits where you contribute money like savings plans, try to max those programs out!
Show References:
- Friends on FIRE episode #016 – 401ks are your BFF!
- Friends on FIRE episode #059 – The amazing tax benefits of FSAs, HSAs, and DCAs
- Friends on FIRE episode #062 – How to choose the right medical insurance at work
- Friends on FIRE episode #081 – Everything you need to know about life insurance.
- Friends on FIRE episode #114 – What’s a roth IRA and do I need one?