Navigating Open Enrollment Benefits

Tim Pope |

The time of open enrollment is upon us. Right about now your employer is presenting the latest and greatest benefits and requires you to select benefits in a two- or three-week window. Pet insurance, you may find, is a somewhat new addition to the menu. There can be a few goodies in the open-enrollment benefits, be sure to check on these 5 things.  

#1 HSA. Many airlines offer high deductible health plans with a corresponding HSA. This is a triple tax advantaged account that allows you to make pre-tax contributions. The earnings on your investment inside the HSA grows tax deferred. When you withdraw funds for qualified medical expenses you can pull the funds out tax free. The contributions for HSAs are increasing in 2023. A person filing as single can contribute $3850, a family can contribute $7,750 and if you’re over 50 you can contribute an additional $1,000. As with all strategies, evaluate your personal situation and your expectations for your health in the coming year before making a change. If you’re expecting major medical bills in the upcoming year, it might make sense to switch from the high deductible plan to something different

#2 Life Insurance. Employer sponsored life insurance is a great foundation for your coverage. This is true especially if your airline provides employer paid life insurance. Use open enrollment to become familiar with what your employer offers. If you find that the employer-paid life insurance doesn’t meet all your needs, you can often pair your coverage with a level premium policy from your union. Before increasing your coverage in the group term plan, make sure to comparison shop. While the group term coverage is convenient, you’ll notice that the rates are scheduled to go up as you get older. This automatic increase can result in a significantly higher cost of insurance over the life of the coverage.

#3 Legal Plan. If you’re like 60% of Americans, you do not have an estate plan. In this case, don’t be like most Americans. Create an estate plan.  Your airline probably offers a relatively inexpensive legal plan. If you have minor children, own real estate, have specific wishes for your assets after you’re gone, you need an estate plan. In addition to the last will and testament, your estate plan should include a living will or advanced medical directive, it will also name a guardian for your minor children, an executor of your estate and allow you to appoint a power of attorney. Many legal plans can also help with life events like adoption, real estate transactions, divorce, documents for elder parents and more.   

#4 Disability Insurance What would happen if you lost your first class medical? In the immediate aftermath, how would you secure income for your family’s expenses until the dust settles? Can you afford to maintain your family’s expenses while you’re out of work for a few months or a few years? Short and long-term disability insurance does just that. The benefit of aviation employer sponsored disability insurance is that in many cases the definition of disability is your own occupation, which is the most favorable definition for you. It also means it is tied directly with your ability to hold your first class medical. Review your disability benefits during open enrollment to determine if you have sufficient coverage. If you need to top it off, there are providers who can help you with additional coverage.

#5 Check your items on autopilot

Beneficiaries: Use the open enrollment time to check the beneficiaries on your 401k, life insurance policies, IRAs and other accounts. Life events like marriage, divorce, childbirth, charitable goals etc… often require us to update our beneficiaries.

401k Contributions: From time to time the IRS will announce inflation adjusted retirement plan contribution amounts. In 2023 the maximum employee contribution will be $22,500. If you’re age 50 or older you can contribute an additional $7,500.

Open enrollment is a great time to review your current 401k contributions and evaluate if you can or should increase your contributions.