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Tom: We have a very important topic for everyone this morning – open enrollment!

Mellody: You are absolutely right, Tom. It may sound mundane, but the open enrollment period is right around the corner. For those who may have forgotten, this is the period each year where employees are able to adjust their benefits options, or anyone who gets healthcare coverage through the affordable care act can change which plan they want to use. Usually open enrollment lasts 2 – 3 months, and generally happens at some point between mid-October to the beginning of February. That may seem far away, but this morning I want to talk about what options people should be looking out for, and give our listeners time to prepare before this important period is upon us!

Tom: What do you recommend we do to prepare ahead of time?

Mellody: The most important thing that you need to do before your open enrollment period is understand what your options are, and consider which choices are best for you. First, if you are covered through employer benefits, go to your HR department and ask them to tell you what you are currently signed up for now, what your alternatives options are, and if they can give you materials explaining these options. Then look at what your current coverage is costing you now, so that you can compare it with your choices for the coming year. And finally, if you are married, you also want to compare the coverage and benefit options from your employer to those of your spouse. If one of your employers offers better coverage and benefits, you should both take advantage.

Tom: OK. Let’s talk about healthcare, the big topic for open enrollment.

Mellody: A couple of things that you have to remember about open enrollment and healthcare options: first, unless you have a major life change, such as getting married, or having a child, this is the one time each year you can change your coverage, so make sure to take time to review your coverage. Consider changes to your healthcare needs. If you are never sick, look at the lower premium plans. If you head to the doctor at the first sneeze, look for a plan with a higher premium but lower deductible plan. You also want to consider your other options, such as flexible spending accounts and health savings accounts, both of which allow you to contribute pre-tax dollars for healthcare costs. Overall, you just want to make sure your coverage matches your needs.

Tom: What should we know about retirement options?

Mellody: The most important thing to consider when it comes to retirement options is to ensure that you are taking advantage of any employer matched retirement plan. This is free money, so if your employer matches your contributions, you really should be contributing at least that much of your salary. You also want to review your past choices when it comes to the funds you are purchasing. Take time to reach out to the person that oversees the program for your company and ask them questions about what they would recommend. A survey by Aflac noted that many people continue to invest in the same funds over the years, rather than changing their choices to fit their age and need, and you want to avoid this.

Tom: What else should we be thinking about?

Mellody: Insurance. Along with health insurance, open enrollment is also the time that you are allowed to adjust your life insurance coverage and your disability insurance coverage – both short-term and long-term. You want to check your life insurance coverage to make sure it covers all of your financial obligations in the event of an accident – things like credit card debt or any loans – and your house, if you are married. Disability insurance is also very important, as 1 in 4 americans will have an accident or emergency that will prevent them for working for a period of time at some point during their career. You want to make sure you are covered on both of these fronts if you are not already, and open enrollment is the time to do that.

 Tom: Are there any other things we should make sure to look for?

Mellody: Absolutely. For most companies, this period is also the time when you are able to opt in or out for a vast range of benefits. Thinks that you should make sure to look out for are transportation benefits, such as pre-tax fares for public transit or parking assistance, wellness benefits like discounted or subsidized gym memberships, or education assistance, either in the form of tuition reimbursement or subsidies for classes that count as professional development. This is why you have to know what your options are during open enrollment period, and take advantage of them!

 Tom: Great to know! Thanks for joining us Mellody!

Mellody: Great to be here, Tom!

Mellody is President of Ariel investments, a Chicago-based money management firm that serves individual investors and retirement plans through its no-load mutual funds and separate accounts. Additionally, she is a regular financial contributor and analyst for CBS News.

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