Open Enrollment

I absolutely detest the open enrollment period at work. Every year, the medical plan provides fewer options, the employer contributes less and the costs to us employees always goes up.

This year, I finally took the plunge and switched to the high-deductible plan and opened a Health Savings Account. The name isn’t very accurate. It should be called a Health INVESTMENT Account, because it essentially becomes a tax-free investment account that, unlike the Flexible Spending Account, doesn’t have to be spent each year.

I am now free from all the guessing about how much to fund the FSA. I won’t have to figure out how to spend the extra money on the years I didn’t forecast well. Now, I can pull out over $3,000 from my paycheck each year before taxes, sock it into the HSA, and invest the money in the index fund of my choice.

ACTION

  • Read up on the IRS website for more information on Health Savings Accounts.
  • When open enrollment comes around for you next time, look at every option critically.
  • Look at each benefit in your package. Are there items you are paying for but never using?

NDQ

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