Benefits Season 101: How to Make the Most of Your Employer Benefits

Benefit season is fast approaching, that time of year when you receive an email reminding you to review your benefits and make any changes for the year ahead. For many people, it’s easy to just click “re-enroll” and move on. But these decisions have a real impact on your health and financial lives.

Below is a quick guide to walk through the key benefits that deserve a closer look, health insurance, health savings accounts, life and disability insurance, and retirement plans.

1. Start with Your Health Insurance

For most families, the biggest decision during open enrollment is choosing a health insurance plan. This choice affects your monthly expenses, your out-of-pocket costs, and the doctors and hospitals you can access.

Evaluate Your Family’s Healthcare Needs

Start by looking at how often your family actually uses healthcare.

• Do you have ongoing medical needs?
  
  
  

• Are there specific specialists or treatments that matter to you?
  
  
  

• Do you take regular prescriptions?
  
  
  

If you’re like my family and use healthcare frequently, you’ll want a plan that makes it easy to see your preferred doctors and get the care you need without worrying about high deductibles. In that case, paying a higher monthly premium can actually make sense.

But if you’re healthy, rarely visit the doctor, and mainly want protection in case of a big event, a high-deductible health plan (HDHP) could be a better fit. These plans cost less each month, and while you’d have to pay more out-of-pocket before insurance kicks in, the overall yearly cost is often lower for low users of healthcare.

Then you might have choices between a Health Maintenance Organization(HMO) and Preferred Provider Organization(PPO).

In short: 

HMO: your care runs through your primary care physician and a local or regional network of pre-approved specialists. This provides you with narrower options, however usually at a lower monthly cost.

PPO: You don’t need a referral to see specialists and don’t need to stay in-network, however staying in network likely results in lower costs. More freedom means that a PPO usually costs more than HMO’s.

Know Your Deductible and Out-of-Pocket Maximum

Every plan has key numbers that matter:

• Deductible: The amount you pay before insurance starts sharing the cost.
  
  
  

• Out-of-pocket maximum: The total you’ll pay in a worst-case year before insurance covers 100%.

• Monthly bill known as your premium.

• Prescription costs.
  
  
  

For example, if your family’s out-of-pocket max is $17,000, that’s the most you could owe for the year out of pocket, plus your monthly premiums. It’s essential to know whether you could comfortably cover that if needed and if not, to have savings available outside your retirement accounts for emergencies like these.

2. The Hidden Gem of Benefits: Health Savings Accounts (HSAs)

If you choose a high-deductible plan, you’ll likely have access to a Health Savings Account, or HSA. These are one of the most tax-advantaged accounts available.

Here’s how they work:

• Contributions are pre-tax. You can often fund them directly from your paycheck, just like a 401(k). If your employer doesn’t offer them, you can set one up yourself.
  
  
  

• The money grows tax-free. You can invest the balance or let it earn interest.
  
  
  

• Withdrawals are tax-free. As long as you use the funds for qualified medical expenses, you never pay taxes — not when you put it in, not while it grows, and not when you take it out.

• 2026 contribution amounts: $4,400 for self-only coverage and $8,750 for family coverage. Those 55 and older who are not enrolled in Medicare can contribute an additional $1,000.

Some with a high-deductible healthcare plan are ineligible to contribute to an HSA

• Not be enrolled in a health plan that is not an HSA-eligible plan, nor can you have a general-purpose health care flexible spending account (FSA)

• Not be enrolled in Medicare

• Not be claimed as a dependent on someone else's tax return

HSAs are a triple tax-advantaged account. For someone in a 32% tax bracket, every $1,000 contributed saves $320 in taxes. And unlike a Flexible Spending Account (FSA), you don’t lose unused HSA funds at year-end, the money is yours for life.

Even better, you can invest HSA funds and let them grow for future healthcare costs in retirement, where they can become a powerful supplemental savings tool.

3. Don’t Overlook Life and Disability Insurance

While health insurance gets most of the attention, two other benefits are critical for protecting your family: life insurance and disability insurance.

Employer Life Insurance: A Starting Point, Not a Full Plan

Most employer life insurance plans offer 1–3× your annual salary. That’s helpful, but for families who rely on your income, it’s rarely enough to replace your earnings long-term or fund future goals like college tuition.

Ask two key questions:

1. Will this policy follow me if I leave my employer? Many do not. If it doesn’t, consider securing an individual policy while you’re healthy so coverage can travel with you.
   
   
   

2. Is the coverage amount enough for my family? Think about what life would look like financially if your income went away. Would your spouse or children be able to maintain their standard of living?
   
   
   

Buying supplemental coverage outside of work can provide additional peace of mind, especially because life insurance becomes harder (and more expensive) to get after a health issue.

Disability Insurance: Protecting Your Paycheck

According to the Social Security Administration, one in four workers will experience a long-term disability before retirement. Despite this, disability insurance is one of the most overlooked benefits.

Employer-provided long-term disability (LTD) insurance typically replaces about two-thirds or less of your income. That’s a good start, but there are two important caveats:

• If your employer pays as part of your benefits package, the benefits are taxable when received.
  
  
  

• If you pay the premiums yourself, the benefits are tax-free.
  
  
  

If you’d struggle to live on two-thirds or whatever your disability policy covers of your current income, consider purchasing supplemental disability coverage, ideally one that stays with you if you change jobs. Private policies may cost more, but they protect your ability to earn an income, which is one of your most valuable assets.

4. Review Your Retirement Contributions

Benefit season is also the perfect time to look at your 401(k), 403(b), or 457(b) and confirm that your contributions align with your goals.

Pre-Tax vs. Roth Contributions

Pre-tax contributions reduce your taxable income today, while Roth contributions are made after-tax but grow and withdraw tax-free.

The best choice depends on your current tax rate versus what you expect in retirement. To 

Starting in 2026, employees earning more than $145,000 will be required to make their catch-up contributions (the extra amount allowed for those age 50+) as Roth contributions.
That means you’ll lose the immediate tax deduction on those extra dollars, but you’ll gain future tax-free withdrawals.

If your employer doesn’t currently offer a Roth option, you won’t be able to make catch-up contributions at all, something worth checking now.

If you want more on Roth vs. Pre-tax see: Roth Vs. Pre-Tax 

Deferred Compensation and 457(b) Plans

For higher-income earners such as physicians and executives, you may have access to nonqualified deferred compensation (NQDC) plans or 457(b) plans at non-profit hospitals.
These allow you to defer income now and pay taxes later.

However, they come with added risk. Unlike your 401(k) or 403(b), the money in these plans technically belongs to your employer as an IOU until it’s paid out. If your employer were to go bankrupt, your deferred balance could be at risk.

Before contributing:

• Assess your employer’s financial stability.
  
  
  

• Understand the rules for when and how you can withdraw funds.
  
  
  

• Make sure the time horizon until you retire aligns with the plan’s risk.
  
  
  

For someone nearing retirement in their 50s or early 60s, these plans can be a strategic way to smooth income and reduce taxes. For someone in their 30s, they may not make sense due to the long wait and employer risk. For more: Navigating the 457(b) at Non-Profits 

5. Maintain Flexibility with Non-Retirement Savings

Even the best benefits plan can’t predict life’s curveballs. Cars break down, roofs leak, and medical bills pop up unexpectedly. That’s why it’s essential to maintain a healthy level of savings outside your retirement accounts, money that’s liquid and penalty-free.

Having accessible funds allows you to handle surprises confidently, without dipping into retirement savings or relying on high-interest debt.

6. Wrapping It Up: Build a Benefits Strategy, Not a Guess

Benefits season isn’t just paperwork — it’s one of the few times each year you can make decisions that significantly shape your financial life.

Take a few minutes to review each area carefully:

• Choose the health plan that truly fits your family’s needs.

• Maximize tax-advantaged accounts like your HSA and 401(k). 

• Review life and disability insurance for adequate protection.

• Understand upcoming rule changes that could affect your retirement savings.

• Keep flexible savings outside retirement for life’s unexpected expenses.

Small tweaks today can have a big impact on your financial resilience tomorrow.

The information in this blog is the opinion of Nathan Tomkiewicz and does not reflect the views of any other person or entity unless specified. The information provided is believed to be  reliable and obtained from reliable sources, but no liability is accepted for inaccuracies. The information provided is for informational purposes and should not be construed as advice. Advisory services offered through Tomkiewicz Wealth Management, LLC, an investment adviser registered with the State of New York.