The fall season brings crisp weather, holiday excitement, and, for many people, open enrollment for health care coverage. We want to remind you to use this opportunity to verify your enrollment deadline and ensure you have the optimum benefits coverage for you and your family. Do some due diligence and reassess the available resources, check to see if anything under your current plan has changed, and compare the out-of-pocket costs associated with each option.
We also want to remind you to check if your company’s plans offer wealth-building tools such as employer-sponsored Health Savings Accounts (HSAs) and Limited Purpose Flexible Spending Accounts (LPFSAs). These accounts are frequently overlooked during plan selection; however, they can really boost your retirement. Here’s how:
Health Savings Accounts (HSAs) - HSAs go hand-in-hand with High Deductible Health Plans (HDHPs). And while higher out-of-pocket expenses might deter some people from choosing them, the tax advantages of HSAs are incredible. Additionally, many employers will make an annual contribution to their employee’s HSAs, which results in free money for you! As long as HSA funds are used for qualified medical expenses, your contributions are:
So why contribute separately to an LPFSA when you already have an HSA? Because if you contribute to your LPFSA what you’ll spend on vision and dental, the funds in your HSA will be untouched by these expenses and can continue to grow tax-free. If you know your medical expenses will meet or exceed the annual HSA contribution limit, having this additional account to pay for vision and dental expenses allows you to max out your tax savings.
We know comparing plans and factoring in these additional accounts can be a bit time-consuming, but simply choosing to reenroll in the same plan year after year might not be the best approach in the long run. Unfortunately, too many people are missing out on this opportunity to create additional funding in retirement through accounts like the HSA. Let us know if you have any questions; we’re here for you.
Boost Your Retirement During Open Enrollment
November 16, 2023