The following is a staff writer post from MikeS. He is a married father of 2. So, with the cat, he ranks number 5 in the house. He loves numbers and helping people. Please leave any questions or comments below for either Mike or Crystal.
Once again, it was Open Enrollment time at work.
Enrollment usually requires me to some calculations to figure out what the best options for me are, but this year’s enrollment is fairly mundane compared with previous years. In fact, I do not have to make any changes to my benefits at all and there is little change to my costs. I will let you take a look at what is happening again with my benefits as well as take a peek at my medical claims this year versus last. I will also give you a quick peek into my long-term disability coverage since I looked at that in conjunction with my enrollment.
This year there are no coverage changes for the plans my employer is offering me. It is probably the first time in a few years that I did not have to evaluate which plan would be the better option for me. As a matter of fact, the only thing I had to do was look at how much premiums are changing for me.
Normally, this time of the year is when I would have to revamp my budget for the following year because of the premium increases in the plan. This is not one of those years. In fact, my total premium change is less than $10 a month. The breakdown is an extra $4 a month for dental coverage, and extra $1 a month for my long-term disability, and an extra $4 a month for my health insurance.
The HSA maximum is not changing for 2017, so neither is my contribution since I’m currently maxing that out at $6,750 a year. Being a numbers guy, I was almost disappointed that I didn’t have any calculations to do, so I did some anyway.
Since I didn’t have any numbers to crunch for my benefits, I decided to see how my medical claims were trending compared with last year. To my surprise, my family is running about $2,000 less in claims through the same period last year.
Of course I was curious as the driver of such a drastic drop.
There were two main causes. First, we had my daughter’s hearing checked at the beginning of last year and then a follow-up a few months later. Everything turned out to be fine, just residual fluid from an ear infection, but those visits and test ran almost $1,000.
Second biggest driver was my son’s cardiologist visit; it was just cheaper this year, to the tune of about $500. I am not going to question why it’s cheaper; I’ll just take the savings. Hopefully the trend continues till the end of the year.
At the end of the year, I’ll invest whatever is left over in the cash in my HSA account into my ETF portfolio.
One of the benefits offered by my employer is long-term disability coverage. The company provides 50% of salary coverage at no cost to me and I have the option of either buying 60% or 70%.
When I first started with the company, I had elected the 70% option, but in recent years that option has become significantly more expensive, so I have dropped to the 60% option.
Now, this isn’t the only coverage that I have, I have purchased private long-term disability coverage as well. Being the sole source of income in the household means I have to protect that income stream. I have bought two policies over the years. The first was back in 2010 and the second was in 2011. The reason for the second is that I qualified for a larger coverage amount. Since bonuses are not contemplated in the coverage provided by my employer, I wanted to protect that income as well.
What I wanted to figure out during this enrollment period was how much income I could receive should I become disabled. The first calculations were to take the employer coverage and calculate how much I would owe in taxes. Since the premium for that coverage is taken out of my paycheck pre-tax, I am obligated to pay income taxes on the benefit. After that, I took the benefit amounts from my own personal policies and added the numbers up.
What I learned is that I would be able to easily cover all of my monthly expenses and have an extra $2,000 left over. This is exactly what I wanted, that extra cushion becomes my new retirement savings. If I’m using the policies, I am not receiving a paycheck and thus not contributing to my 401k anymore. I don’t want my savings to suffer if I’m out of work for an extended time.
Boring is OK
Benefits enrollment this year was pretty boring. That means though that my costs did not go up significantly and that I have all the appropriate coverage. By being diligent with my finances and making informed decisions, I have begun to settle into a new normal. My mental energy is now being focused on how I can run a faster marathon, instead of what happens if the car breaks down. I am enjoying my new normal.