<div class="block">With open enrollment just days away, we want to provide you with some information that you can take into account when mapping out your health plan for the next year. Silvia Tergus, financial planner at Prudential Financial, joined &#39;Stretching Your Dollar&#39; talk about budgeting for health next year, enrollment windows and how to decide what options best suit your situation.</div>

Stretching Your Dollar

Stretching Your Dollar: What to Know About Open Enrollment 2023

Open enrollment is right around the corner. And so here to help us understand what we need to know and mapping out our health future is Sylvia Turis Financial Planner for Prudential Financial Sylvia. It's great to have you on it. How should Americans budget for health care next year? Great to be here. Thank you so much. How should Americans budget for health care next year? So, open enrollment, in fact, our company is actually uh on our last day of open enrollment today. Um It's a really key time. I know that for, for a lot of us, we tend to rush through the decisions. I know that's true for some of my clients. Uh but it's really worth the time and the investment to, to, to really sit down with your situation, your choices and assess what is best for you. So there's a couple of uh of benefits coming up, the HS A contributions have increased between 7 to 8% for next year. Not everybody might be enrolled in an HS A. Uh But I would say first sitting down and assessing your current needs, whether it's for yourself, your family, uh whatever, whatever the size of that family is understanding your needs first and then sitting down with those benefits with those choices. Um and just some quick comparison sometimes can uh can really reap the benefits in terms of what you enroll for for the coming year. Well, according to A I see that the average cost of employer health insurance is going to rise by 8.5% next year compounded on top of what happened pretty high gains already during the pandemic. How should our viewers prepare for that? Yeah, so rising health care costs unfortunately are a harsh truth and something that we work into our financial planning with our clients. Certainly for their current expenses as well as healthcare expenses in retirement. Uh I think, you know, we, we all have uh none of us have been immune to inflation over the last couple of years. We're also still suffering some of the macroeconomic effects of coming out of the COVID pandemic. And so employers and companies are um certainly experiencing that as well. So in terms of rising costs again, sitting down with those benefit options and understanding the pros and cons in terms of your choices. Um don't forget to overlook uh nuances with benefits, things like uh flexible spending accounts. H SAS health savings accounts, any tax advantaged accounts that are going to allow you to save towards those health care expenses, uh be prepared to pay those perhaps higher premiums as well because we know, I'm sorry, not premiums but the higher deductibles. So we know it's not just about the premium, but it's also the deductible. Um So as always, broadly, from a financial planning standpoint is think about things in a comprehensive manner. Um have your savings components in place, whether it's emergency savings, but more than anything don't miss on some of those tax advantage savings opportunities, whether it's F SAS or H SAS. Ok, great. So just remind our viewers to what exactly an HS A who could apply for an HS A and who an FS A would apply to? Great question. And really there could be a whole segment based on this. So it's one of the most common questions I get is the difference between F SAS and H SAS. The biggest difference to be aware of is F SAS flexible spending accounts, um or you're going to have to utilize most if not all of those dollars within your benefit year. Whereas health savings accounts H SAS, you are currently able to roll those uh savings over into the next benefit year and so on. Can, can even take it on into retirement and, and uh and further on, however, to be able to use an HS A, you have to first be enrolled in a high deductible plan, right? So H SAS go hand in hand with high deductible plans. So what I tell my clients and what I would offer is for all the benefits that an HS A may have over an FS A in your opinion, or in my opinion, you first have to make the choice as to whether a high deductible health plan is something that's right for you. So this is going to, to represent perhaps a lower premium out of pocket in your paychecks. But you're gonna be able responsible for perhaps higher copay or premiums. I'm sorry, or um um or deductibles if you are in fact, in a health care situation. So health health savings accounts provide what we call triple tax advantage. Doesn't that sound great where your contributions are done on a pre tax basis? That's the first tax advantage. The second tax advantage is tax free growth within the account and the distributions are also tax free as long as they're used for qualified health care expenses. Do you think that it's likely that employers will make big changes to plans that they offer with the costs rising for health care? I mean, certainly we understand that there's differences among companies, differences among industries, but we know this and I know this from my clients as well is that look, we're also in a, in a, in a big game in terms of talent out there. And so employers want to remain relevant and want to remain competitive when it comes to their overall compensation structure, right? And so we really do believe that overall, you know, employers want to do what's best for the employee. And they understand that the wellness, the overall wellness of their employees is best for them. And so as far as drastic changes, you know, of course, there there may be some changes across the board. But again, I go back to some of those additional benefits that are not to be overlooked, things like hospital indemnity insurance, things like critical illness insurance, perhaps additional levels of disability insurance or life insurance. Um Understand all those components of what's available to you, your complete benefit package from your employer, not just from the health insurance standpoint, although of course, we know that's often the most important one that we look at. Yeah, let's talk about optical insurance, something to factor in as well. What should people look? Yes, I like it and I have my contacts in. So I'm right there with you Sylvia. Uh what should people be looking for when it comes to optical insurance? Yeah, so clearly I am a uh a consumer of uh of the insurance as well as the products. And so optical insurance is an interesting one. So I have a a recent client example um of a client that actually declines his vision insurance. The reason why he does that is because his his frames are his splurge. So he loves designer frames, buys multiple frames throughout the year. And of course, this is this is uh written into his expense plan and his resource plan over the year. But for someone like him, his particular vision insurance is not necessarily going to help him as much as perhaps somebody else. Uh But again, it's a personal decision, you have to understand the needs of your family and where you particular where you sit in as far as the consumer. Um something else you may want to look at is that again, as an enhancement to benefits is oftentimes we see uh vision discount programs be an enhancement to vision insurance. And of course, we're talking about contacts and frames and you know my frames. But remember vision insurance is not just for those of us that have glasses or contacts, the health, the health of our eye is very important. And so adding that uh annual vision check to our overall health benefits and health welfare throughout the our annual checkups that we have is important. So I would say don't just ignore vision insurance if you're not someone that's currently wearing contacts or or you're not someone that's wearing contacts and glasses, the overall health of the eye is obviously very important. Sylvia. My final question is about life insurance. I think a big topic that people are really focused on, especially in the wake of COVID. Any tips for navigating life insurance selections during open enrollment? Absolutely. So as a comprehensive financial planner, I consider life insurance to be at the very foundation level of a client's financial plan. And of that foundational aspect of life insurance, the employer benefit. In other words, the group plan is perhaps that first line of defense. So for a lot of people that is the first life insurance that they receive, sometimes it may be even the only life insurance that they have. Uh So again, you wanna step back and assess how much insurance do you really need the amount? How much do you need to make sure that your family is financially secure. God forbid if you were to pass? Right? We all know that our day is gonna come. We just don't know when and so that's important. Um Life insurance office. Um oftentimes we see a basic benefit that's oftentimes paid by the by the employer, not always, but you're gonna see a basic benefit and sometimes you're gonna see options for additional benefits. So these optional benefits are going to be best for individuals that may not otherwise qualify for health insurance on an individual underwriting basis. Uh or it might just be an easy a choice to just select an optional benefit on life insurance. And what I will add here is the importance of reviewing your beneficiaries use this open and roll time to make sure that you have the right beneficiaries on the right accounts. And that most importantly that you have a beneficiary listing, do not forget disability insurance as part of your benefits. We talk a lot about life insurance, disability insurance, in my opinion is one of the most confusing overlooked benefits you can think of this as paycheck insurance if you were to come injured or otherwise unable to perform the functions of your job. Disability insurance is what would provide a portion of your uh of your pay. So don't forget disability insurance as well. All right, Sylvia, thank you so much for joining with all the tips that we need to know. Of course, as open enrollment is underway.