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Get with the plan: Understanding your work benefits

About 149 million Americans participate in employer-sponsored health

About 149 million Americans participate in employer-sponsored health insurance, with 55 percent of companies offering benefits. Credit: iStock

It's that time of year when employers distribute scads of documents, loaded with tiny print, from which employees must make benefit elections. The process can be dizzying, so let's try to break down the choices.

HEALTH CARE About 149 million Americans participate in employer-sponsored health insurance, with 55 percent of companies offering benefits. When reviewing health care plans, there are three basic questions to ask: What does the plan cover? Check for services you and your family are most likely to need.

How much does it cost? Calculate monthly premiums and add out-of- pocket costs for deductibles, coinsurance and copays.

Are your doctors in the plan's network?

The most widely used plans are health maintenance organizations (HMOs) and preferred provider organizations (PPOs). In an HMO, you pick a primary care physician, who acts as the quarterback of your health care. All of your services go through that doctor, who is responsible for making any necessary referrals. In most cases, the plan will not cover care outside the network. A PPO is usually more expensive because it gives you more flexibility. You can go to any health care professional without a referral, either inside or outside your network, though staying inside your network means smaller copays and full coverage.

Many large employers have started to introduce high-deductible health plans, which offer lower premiums. These plans usually paired with health savings accounts, or HSAs, which allow you to set aside pretax money to pay for unreimbursed costs. If you're generally healthy and want to save for future health care expenses, this may be an attractive choice. Or if you're near retirement, it may make sense because the money in an HSA can be used to offset costs of medical care after retirement. On the other hand, if you think you might need expensive medical care in the next year and would find it hard to meet a high deductible, it might not be your best option.

Another way to reduce your health care costs is to take advantage of flexible spending care accounts, often referred to as FSAs, which allow you to use pretax dollars to pay for unreimbursed medical expenses or dependent care up to $2,500. The IRS has put an end to the 30-year-old "use it or lose it" restrictions. Going forward, taxpayers will be able to carry over up to $500 of unused balances to the following year.

INSURANCE Many companies offer affordable group rates for life, disability and long-term-care insurance, so definitely explore these options. The most important thing to determine is whether the coverage is "portable," which means you can take the policy with you if you leave the company.

UNDERUSED BENEFITS Education and tuition reimbursement and corporate discounts and partnerships may help you save on cellphone contracts, computers and even on tickets to local events.

RETIREMENT The open enrollment period is a perfect time to review your retirement plan and increase your contribution. Even a small boost to contribution levels -- $25, $50 or $100 per paycheck — can add up significantly over the course of many years. Review contribution limits. (The 2014 maximum contribution to an employer plan was $17,500, with employees age 50 and older eligible to contribute an additional $5,500. The maximum on IRA and Roth contributions will remain at $5,500, with a 50-plus catch-up limit of an additional $1,000.)

If you are not sure how to invest your retirement contributions, many plans offer online allocation assistance. If you are really at a loss, most offer target date funds, in which a fund company invests based on when you will need your money and will rebalance the portfolio periodically as you approach your target date. But fair warning: Some of these plans can be riskier than you realize, so be sure to drill down to see the percentage allocated to stocks versus bonds.

Finally, many sponsors offer great features that can help put your retirement plan on autopilot. There may be "auto-escalate" features that automatically increase your savings contribution levels every year, and auto rebalancing, which periodically ensures that your asset allocation remains at your desired levels.

Jill Schlesinger, a certified financial planner, is a CBS News business analyst. She welcomes emailed comments and questions.


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