When life events affect your benefits
Getting married or divorced, having or adopting a baby and retiring are significant milestones in life. These “qualified life events,” as they are commonly referred to in the insurance industry, may permit you to make adjustments to the benefits you receive through your employer or other provider. If you’ve experienced a life event this year, review your benefits and determine if you need to make new or different elections to ensure the desired coverage for you and your family. Keep the following items in mind as you complete your review —
— Act promptly: Be aware of deadlines to make your new benefits elections. Generally speaking, providers offer special enrollment for a limited timeframe during which you can update your new status or make changes. If you miss the window, you may face a waiting period. In some cases, a missed deadline means you’re out of luck until the next open enrollment period or the first of the year.
— Change health insurance coverage: Do you have enough insurance? Too much? If you’re newly married, compare the benefits offered to you and your spouse through your respective employers to see where you can get the most value. A higher deductible plan may make sense if you have two incomes, are both young and healthy and don’t anticipate significant medical expenses. If you add children to your family, you’ll want to make sure they are included in your health insurance as dependents. If you’re retiring before you are eligible for Medicare, evaluate COBRA benefits (continued coverage under your employer’s plan), insurance through a still-employed spouse or your options through the healthcare marketplace.
— Evaluate life and disability insurance: Marriage, divorce and the addition of children are all reasons to evaluate your life and disability insurance coverage. If your coverage is insufficient, make it a priority to obtain additional insurance. When reviewing your coverage, take time to verify that your beneficiary designations are correct.
— Adjust your Health Savings Account contributions: If you have a health savings account, or HSA, and experienced a family event this year, the amount you’re allowed to contribute annually may have changed. If you added to your family through marriage or children, you can set aside more money in a HSA. If you experienced a divorce, you can split HSA savings or assign the benefits to your former spouse as part of a divorce agreement. Check with your health care provider to learn how much you can contribute.
— Consider legal and financial advice: Some life events, such as divorce or adoption, may involve benefits decisions that have legal implications. This could require meeting with an attorney and a financial advisor to evaluate your situation.