Adjusting the Deductions

The end of the year came and went, and with it, open enrollment for my employee benefits at work. I made a few changes this year that I thought would work out a little better for me financially.

First off, what I didn’t change: I stuck with the Premium health insurance plan at work. I switched from the Basic Plan (which was free) to the Premium Plan at the end of 2013. You can read all about that decision here. The Premium Plan only costs me $7 per week ($364/year pre-tax, which is ridiculously awesome!). The deductible did go up this year, from $250/year to $300. Oh, the horror! Honestly, I’m extremely lucky to have such awesome health insurance. And even though it’s inexpensive, the coverage is great. I’ve used the heck out of my insurance the last couple of years, and I’m very happy to have it!

I decided to add dental insurance this year. The dentist I’d gone to my entire life passed away a couple of years ago, and I wasn’t real excited about finding a new dentist. I finally found one through a friend’s referral. The first visit? $400. Yikes! The semi-annual cleanings cost about $200 each, plus there’s all the extra x-rays, etc. they do once a year. The dental insurance costs me $5.54/week ($288/year pre-tax), and covers 2 cleanings, plus x-rays, and discounts on all the other stuff. Teeth are super important to me, so that’s money well spent!

At the last-minute, I decided to drop my Aflac policies. I had an Accident and Cancer policy with Aflac through work. While I’ve gotten my money’s worth out of the policy after my ankle injury (and bug in my ear), I kinda felt like keeping these policies wasn’t worth the cost. Sure, they pay out if I get injured, or get cancer. But I have great health insurance, and excellent short/long-term disability insurance through work. Adding Aflac seemed a little bit like gambling: Throwing money out and hoping to hit a payout. Or, actually, throwing money out and hoping NOT to get a payout. I was spending $10.68/week combined on those policies ($555/year, pre-tax). That’s a lot of money!

But I didn’t want to just add that weekly premium back into my check. So, instead, I added it to my flexible spending account. I had been contributing $300/year (pre-tax) into my flexible spending account. I initially wanted to keep that amount small, since in a flexible spending account you have to use it by the end of the year, or else you lose it. But, I’ve been spending every penny every year. Plus, our plan now allows us to carry-forward up to $500/year. So, I increased it to $600/year (pre-tax), or $11.54/week. What I’m paying this year for dental and flexible spending comes really close to what I was paying last year for Aflac and flexible spending, so there isn’t much difference on my paycheck. If this year is anything like the last two, that money will be used up in medical co-pays/deductibles/prescriptions. But I also really need to go to the eye doctor, and get new glasses.

So, those are some of the adjustments I made this year. All in all, I think it’s a good use of my money. And, since everything is pre-tax, I’m saving money on taxes as well. Hey, it’s not much, but every little bit helps. The only other change I’m planning to make would be to my 401(k) plan. I’m currently not contributing (I still get my employer’s contribution though). We typically get some type of pay increase in the first few weeks of the new year. My plan is to throw that increase directly into the 401(k). Since I’m not used to that money, I’ll never miss it. I’m not expecting it to be much, but every little bit counts!

Do you agree with my plan? Did you make any changes to your employee benefits for 2015?

– Cindy W.

Comments

  1. I feel you on the AFLAC policies. I dropped mine years ago because the premiums were ridiculous! The benefits are great, but just not worth it.

    1. It’s easy to not realize how much you’re actually spending on something when it’s taken out of your check weekly, and on a pre-tax basis. And they make you feel like you’re actually getting something out of it with the annual benefits for wellness care. But I’ll get so much more value out of the flexible spending account and dental insurance. Dropping it is definitely a good choice!

  2. That’s an amazing health insurance benefit! Mine is pretty good, but it’s not that good 🙂 I just looked it up and I pay $996/year ($83/month) for health (OUCH), $248/year for dental, and $102/year for vision. The dental and vision are definitely a good deal for me, and although I could drop to another health plan, it would only save me about $15/month — so I’d get an extra $10/month in my paycheck after taxes. That’s not nothing, but it makes little enough difference that I’d rather have the more comprehensive coverage offered by the plan I’m on. But I’d pay the same amount no matter how much I made here, so I should really try to increase my salary 🙂

    I think your plan sounds great — you’re using the insurance money for health needs instead of rolling it back into your spending money, and saving a little on taxes while you do it. What’s not to like?

    1. My benefits at work are definitely awesome. Also, our Flexible Spending Account works as a reimbursement, instead of having one of those neat debit cards that many companies have. So, I end up working most of my co-pays, etc., out of my regular spending, and then turn in a bunch of receipts at once for reimbursement. Since that money has already been spent in my budget, the reimbursement is almost like bonus money, that I can then put into savings, or debt repayment, or whatever. It’s a nice way to squeeze a little extra money into some of my other priorities.

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