Guess How Many Workers Dont Understand Their Workplace Benefits

Guess How Many Workers Dont Understand Their Workplace BenefitsGuess How Many Workers Dont Understand Their Workplace Benefits With open enrollment season at work about to kick into full swing, nows the time for most employees to put some serious thought into their benefits. Unfortunately, its a process that proves harrowing for a surprising number of people. Thats because nearly 50% of U.S. employees dont understand their benefits materials, or so reports the International Foundation of Employee Benefit Plans, and thus are ill-equipped to make smart decisions during open enrollment.But if you think that sounds like a problematic statistic, wait - it gets worse. In a 2017 Aflac study , 74% of workers revealed that there are at least some components of their benefits they dont understand. Furthermora, 92% of workers say they simply choose the same benefit year after year rather than attempt to navigate their options. If the idea of selecting your benefits this season is enough to make you sweat, here are some tips for getting through open enrollment and making the best choices.Its hard to choose the right health insurance plan if you dont understand its terms. Before you attempt to select your coverage (or, worse yet, resign yourself to your current plan, even if its not serving your needs), read up on what all that lingo actually means. Your premium , for example, is the amount you pay for the privilege of having health insurance, kind of the same way you pay a monthly membership for access to your gym. Your deductible , meanwhile, is the amount youll need to pay out of pocket before your insurance company starts paying for your services. Then theres your copay , which is the amount youll be responsible for paying each time you receive medical treatment or fill a prescription once your deductible has been met.Understanding these terms is important, because they can help you make a critical financial decision. Its often the case that insurance p lans with lower premiums come with higher deductibles, and vice versa. So while you might think youre saving money by signing up for a low-cost plan, you could end up spending more out of pocket if you wind up using that insurance a lot during the year. And thats certainly not ideal.Many people pass up benefits like flexible spending accounts (FSAs) simply because they dont understand how they work. But if you typically spend money on medical expenses or child care, it pays to sign up for one of these accounts. Thats because the money you fund your account with goes in on a pretax basis, thus allowing you to use tax-free dollars to pay for the things you know you need.FSAs come in two varieties healthcare and dependent care. For the former, you can contribute up to $2,600 a year. For the latter, the limit is $5,000. Now lets say you typically rack up precisely $2,600 in healthcare costs and $5,000 in daycare charge s. Lets also assume your effective tax rate is 25% (meaning, you lo se 25% of your income to taxes). Without an FSA, youd pay $7,600 in after-tax dollars. But by covering those costs with pretax dollars, youll automatically save yourself $1,900.Now the only catch with FSAs is that once you decide how much to contribute to your account, you cant go back and change that allocation unless you experience a qualifying life event during your plan year, such as getting married or having a child. This means that youll need to carefully estimate your spending needs, because if you overfund your account, youll forfeit whatever amount is left in it by the time your plan year comes to a close. But if you allocate just the right amount to your account, youll end up benefiting tremendously.Open enrollment can be a daunting process, so why go it alone? If the information your company provides doesnt suffice in helping you make an informed decision, ask for further clarity. This might mean sitting down with an HR person or petitioning your employer to bring in an o utside expert who can walk you and your colleagues through your options. In the above-referenced Aflac survey, 48% of workers say theyd like the option to speak with an expert about their benefits, so if that choice isnt immediately made available to you, request it.Selecting your workplace benefits shouldnt be a stressful process. If youre dreading open enrollment, read up on how health insurance works, learn more about your potential tax benefits, and speak up if your employer isnt providing adequate information. This way, youll be in the best position to make the right choices.The $16,122 Social Security bonus you could be missingIf youre like most Americans, youre a few years (or more) behind on your retirement savings. But a handful of little-known Social Security secrets could help ensure a boost in your retirement income. For example one easy trick could pay you as much as $16,122 more each year Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind were all after. Simply click here to discover how to learn more about these strategies.Originally published by The Motley Fool . Reprinted with permission.