Welcome, everybody, to another episode of the Sandwich Bread Podcast. I'm your host, Tom Kaminski. These are conversations about life and money for the sandwich generation. This is three in a row solo episodes. We will have guests on again very soon, I promise you. But this is another episode that lends itself well to the solo format, and that is to run through a strategy heading into your open enrollment season. This was one of our top downloaded episodes from 2025. So I wanted to freshen it up and bring it back for the fall of 2026. If you're like most individuals, we are heading into open enrollment season. Most folks that I work with, it's between October 1 and maybe the first, second week of November that your employer's open enrollment season is. Occasionally I'll catch some folks who are the July open enrollment deadline. That's probably 5% of the time, but most folks fall in this window, including those in retirement. You've got a Medicare window right around this time or Affordable Care Act. Reenrollment happens right around this time. So I think it's prescient and a good topic to dive into. So, like last fall, I'm going to hit on the common things you run into in an open enrollment packet and how I like to think about them in my discussions with clients. This is probably my biggest time of the year with my client base. I try to schedule a meeting strategically around your open enrollment window. And as I mentioned a moment ago, that's like six weeks of madness. So my calendar looks a little nuts around this time, but I'm trying to really get in front of every client because this is an incredibly important financial decision and life decision in a short time frame. And we see a lot of things go really well or really poorly if you are thoughtful about your open enrollment season. So with that, I'm going to dive into some of the key things you'll see in an open enrollment benefits packet and how I like to think about them for my clients, and hopefully it helps you on your journey as well. So first and foremost, I'll start with the big one. Your 401k plan. During open enrollment season, your employer may communicate some changes to your employer 401k plan that they provide or 403B plan. Be sure to read every word of this section and understand any changes that might be underway with the plan. If you are new to the workforce, just it's your first job right out of school, uh, all I can say is start saving into your 401k plan. If your employer offers a match, a minimum starting point would be to defer enough from your paycheck to secure the entirety of your employer match. So just be sure to read through that and understand that. That would be sort of table stakes. You know, as you establish your own financial goals that you're saving toward, I always encourage folks to just stuff a little bit more into the 401 plan, especially if you're early in your career. If you're already in the workforce, just review the match program changes that might be taking place. This also is a good time to log into your 401 or 403b and ensure that your balances are all invested and invested as you wish. For example, I often see folks change their investments, but all they do is select future contributions to their 401 plan, go into the new desired allocation. So if you don't review it regularly, you sort of end up with the Frankenstein-looking 401k with all kinds of funds purchased in all different directions, which may or may not benefit your ultimate savings goals. So use this opportunity to log into the portal for your 401 and make sure everything is allocated as you wish. That's the biggie. Next up, probably on equal footing, but maybe 1% lower footing than the 401k plan is your health insurance. This is a challenging decision to make each year. If you are a two-working individual household and you have to compare your healthcare plans, this can be so exhausting that folks just by default take whatever box is checked. I encourage you to not do that. Spend a little bit of time analyzing the plans between you and your partner and analyzing the different options within your plans to make the most informed decision you can. So let me run a quick common scenario you'll encounter for health insurance. And I'm just gonna really boil it down to a simple scenario. Say your employer offers two options within their health insurance. One is a high deductible plan, and one is a traditional PPO, preferred provider organization plan, aka a lower deductible plan. A lot of folks will look at those two options and go with the PPO selection because you know you don't like to see money coming out of your pocket each time you go to a doctor or a specialist. But I encourage you to hit pause before going with a PPO or a high deductible health plan and do the actual math. Here's a simple formula to follow to try to get to a more informed decision. And I'll caution you, you know, if you read anywhere that you should pick one plan or the other, it's probably bad advice. There is no universal advice here. Just do the math. And then the tricky part is you have to understand your own unique health needs before making the final call. So the math. First and foremost, understand the premium expense. So take your per paycheck, often it's quoted per paycheck premiums, times either 24 or 26, depending on the type of payroll setup you have for your high deductible plan. Then do the exact same exercise for your PPO plan. This will give you a sense right off the bat of the premium savings of selecting a high deductible plan versus the PPO. In some cases, I'll analyze a client's health insurance cost and I'll see three to four thousand dollars in premium savings right off the bat. And if they are a healthy individual who really just does the annual checkup and say they're single and don't have the complexity of managing family health, I'll often give them a nudge to say, hey, you should probably go with the high deductible plan because I think you'll save a little bit more on premiums if you have a quiet year medically. Now, you you can't always keep it that simple and universal, but that's that's a first step in your math calculation. Next is to analyze the tax savings of picking one plan versus another. It's not terribly complicated. So if your high deductible health plan offers an HSA and your cash flow can sustain it, I often recommend that my clients max out their health savings account. For a family, that's $8,750 per year, and it goes right into an HSA and essentially becomes a healthcare bucket. On top of this, often I'll see an employer contribute to the HSA, you know, $1,000, $1,500, sometimes $2,000 into the plan. And so that's essentially free money as well. So you take the premium savings of the high deductible plan. Then let's say there's a $1,000 employer match. Then let's say you're in an effective tax bracket of 20, you're about $1,600 ahead on an HSA max out. You start to add up all this savings and the high deductible plan becomes increasingly compelling when measured against the PPO. Caveat to that. I find in my work with clients that if you are a light medical need individual, the high deductible plan wins. I often find with my clients, if you are a heavy, heavy medical need family, the high deductible plan can actually make sense because the out-of-pocket maxes are usually fairly similar between the high deductible plan and the PPO. I will caution you though, it's the middle section where you're not really low in medical costs or really high in medical costs, where there's tons of shades of gray. And I encourage folks, this is where generic advice fails. You need to look at your unique healthcare needs carefully, what's covered, what's not covered, what might be under a copay, and really do your best to sketch out the middle section there. Um, some online tools exist that can help simplify the math behind this, but they don't really do a good job on the estimated expense on the health side. So you really have to kind of dig in the fine print there and do your best. So, one other note, if you're using a health savings count, you you're on the high deductible plan, you're maxing it out. Understandably, folks will use those balances to cover medical expenses from the HSA, because they say, well, it's my health money. You know, I'm gonna use it to cover these copays or costs for a minor surgery or something like that. I will tell my clients if your family cash flow is strong and you can pay those medical bills out of pocket without endangering your emergency fund, I encourage you to keep those HSA balances in the health savings account and invest them toward the future. Often HSA plans, I'd say about 95% of the time, I they offer investment menus. You can buy some low-cost index funds and really seek out to build your HSA balance. And there's nothing wrong with having a substantially large HSA fund. A lot of folks are skittish about that. I assure you, your number one expense in retirement will be healthcare. It's gonna be extremely costly. You will be able to empty that account. Um, so I always encourage clients to think of the HSA as a part of your retirement plan, less so about managing current cash flow. So that's that's something I always encourage with clients, and and we're always trying to build up that HSA. It's it's an amazing account type because you get a deduction for contributions to the HSA. You get tax-free growth inside of the account. And then as long as the distributions are for qualified medical expenses, those are tax-free as well. So that beats a Roth, that beats an IRA. It's it's sort of a magical triple tax account. And also note that these limits are rising a little bit in 2027. So it's up to 4,500 total per individual, 9,000 per family. So if you're using it, you may need to make some small adjustments to your deferrals. So again, the big takeaway on the healthcare side of things, spend a few minutes, do some basic math, get a real understanding of the premium costs and potential tax savings. Again, I don't really tip the scale one way or another with clients when I'm choosing between high deductible and PPO, but just do some basic math and make an informed call there. Some other unique benefits that I'm seeing more frequently during open enrollment period. An account I really try to nudge clients with is the dependent care FSA. So dependent care flex spending account. So this account is intended to be used as a way to offset the enormous cost, enormous cost of having your children in daycare or nursery care or after school programs or summer camps for two working parents. The important caveat, and I encourage you to read the rules around this because they are granular, but you must either have two working parents or have a parent working and seeking work. So that's the operative language there to qualify for use of this account. From there, uh, when you enroll, you will have a deferral taken out of your paycheck. And it depends if you're a highly compensated individual within your employer. There can be some means testing there, but for most folks, it's either $5,000 or $7,500 offered for employees in 2027 as the max out. So you'll sign up for the program. And assuming your daycare expenses are like normal places, many, many times $7,500 per year, unfortunately, probably makes sense to max this out. Uh, daycare would be a qualifying expense under this scenario. And so you will defer pre-tax out of your paycheck into the the dependent care FSA, and then you either pay the facility directly or you pay yourself back and reimburse yourself essentially with these tax-free dollars for the cost of using the program. Uh, one important caveat on qualified expenses, it can be a non-overnight camp. So, really, the intention is two parents are at work and the account is intended to benefit those who need to pay for care for their children while both parents are at work. So think daycare, nursery school, aftercare programs, summer camps as long as they're non-overnight. Maybe you employ a nanny for the summer, something along those lines. Just be sure to 1099 that individual and make sure that the taxes are getting paid on those expenses just to make sure everything squares up nicely. So if parents are helping, for example, watch your kids and you're paying those parents, just make sure that they are claiming those payments on their taxes. This account is use it or lose it. Um, so you want to make sure the amount you put in you will deplete during the year. But there are very few tax breaks for high-income earners in particular. And so this is something I always encourage clients to look at. Because as we roll through your benefits, there's just a few areas where you can really lower your tax liability, this being one of them. Next up is the healthcare FSA. So that's the healthcare flex spending account. This is paired with your PPO. It is expected to be about $3,500 per person in 2027. As of the recording of this episode, I don't think the official number's been released yet, but essentially this is intended to be used for a wide range of medical costs: co-pays, deductibles, coinsurance, doctors' visits, etc. So if you're going to be on a lower deductible plan and you're anticipating an expensive medical year, consider adding this to your arsenal and essentially deferring money to repay yourself or pay directly out of the account for these planned medical expenses. This is mostly a use it or lose it. They are adding a nominal amount that you can roll over each year. So again, you don't want to overfund this account and run the risk of losing some of the value. So I just encourage folks be prepared to deplete it during the year. So again, consider this. If if you have pretty locked-in medical expenses and you're expecting it to be a high cost year and you're enrolled in the PPO, look at this. Next up, short-term disability. Just be aware of if your employer is offering short-term disability, be aware of the amount covered and just understand it. Say, for example, I see some very generous short-term disability plans that basically cover 100% of your costs out of pocket for the first 12 weeks that you may be injured or ill. That's awesome. That really gives your emergency fund a little bit of flexibility, you know, running the risk of being depleted due to a short brief medical illness. I also see employers who have, you know, $1,000 a week or $1,000 paycheck limits to their short-term disability. And if your family spends well beyond that, you just need to make sure your short-term emergency fund is fully built up so that you can cover any type of gap in cash flow for a short illness or disability. So that's it. That's that's the big takeaway there. I don't often rush my clients to purchasing some type of supplemental short-term disability or anything like that. I just try to make sure that the emergency fund can manage any disruption in their income if it's a problem. Next up is long-term disability. This is an incredibly important benefit. One of the most important benefits that you'll encounter through your employer. Do not sleep on this. I go through the exercise of purchasing independent long-term disability policies with my clients and so separate from the employer or the group setting, it is so expensive. And a lot of folks just kind of check this box or are auto-enrolled in this benefit and don't appreciate that their employer is sometimes paying thousands of dollars per year in premiums for a benefit that they are way, way, way more likely to use than life insurance, for example. So just the number one thing is if your employer has this benefit, understand what it is. In some cases, they'll cover 60% of your income, but it only goes up to a fixed dollar amount. So if you're you make, say, three, four hundred thousand dollars per year, they may offer, well, we'll cover 60% of your base salary capped at $10,000 per month. Well, you math it out and you're like, wait a minute, that's way below the cash flow my family is accustomed to, and it's capped out. So in those cases, that's where an independent policy may be needed to fill that gap. Anyway, just understand what's covered, understand the limitations there, and you know, check out your pay stub to understand how much they're actually paying for. It's often a significant amount. When you go through the exercise of buying an independent long-term disability policy, you actually really appreciate this benefit. I think the statistic is about 25% of employees between their initial working years, so say you're age 22, 23, and the age of retirement, age 65, about 25% will actually use a long-term disability policy at one point in time. So this is incredibly helpful and it's often in play. Also, a couple other notes on this, understand what covered compensation is. I see plans where bonuses or um incentives are included in covered compensation. I see other plans where it's just your base salary. So maybe you are in a sales role and your base salary is $80,000 per year, but your sales commissions are $150,000 or $200,000. You may be shocked at how little is covered by your long-term disability benefit. And then the other thing is, you know, if you're working with an independent insurance agent or broker, just be real clear on the incentives they have when they're helping you procure insurance. And they should be really transparent about how they get paid. And they're entitled to a commission for helping you get disability insurance, but just be aware of the incentive structure and purchase carefully if you're gonna go shop in the independent space. Next up is life insurance. Often employers will offer $50,000 or $75,000 in covered free life insurance, or some cases they'll go up to one or two times your annual salary with a cap on that. Just understand what the coverage is. If you do not have life insurance currently in place and you have, for example, a young family, you may need life insurance. It's entirely possible. And this might be an easy way to procure life insurance really efficiently, which would be to purchase it through an employer. But just understand that those premiums and a schedule will be provided, but those premiums will go up over time. And it's often, you know, if you're a healthy individual, you're being grouped in with your employer. And if you're on the healthier side, you may be paying a higher premium than you could find if you went and got an independent term life policy. So this might be a good opportunity to reflect on the current life insurance you have in place and take some steps to get either insured through work or an independent policy. Again, I find better pricing and more flexibility often in the independent space. But for some folks with health issues, getting life insurance through work is by far the best option, then you want to lean into that and get the appropriate amount. Next up, these are a couple of topics that you'll run into sort of at the end of the open enrollment packet. These are kind of the liner notes, if you will, if it's a 40-page PDF. These are some of the items you'll see on page 37, 8, 9 in that range. So, but don't gloss over all of them. A couple of quick ones at the end here. Pet insurance. Pet health care is insanely expensive. It has far outpaced regular inflation, and the costs continue to rise. So I always encourage folks to consider pet insurance if they have a pet at home that may need health insurance or care for medical issues. Review this with the same level of discernment as your own health plan and consider that it protects you from catastrophic costs. I will add the caveat. Often pre-existing conditions are not covered, not covered. So just consume carefully. And it might be good to add health insurance for your pet. Identity theft protection, if your company offers it through a reputable good provider at a deep discount, go for it. I think everyone should have identity theft protection. It's super important. So I always nudge people to get this if they can. Legal support program. So this is called Met Law in a lot of cases, and it's essentially a network of legal providers that will help with anything from drafting a basic will to a trust to legal disputes, traffic disputes, those types of things. I'll say a little pros and cons on this one. I kind of go both both sides of this one. If you have a legal need, I always encourage clients to not shop based on price. So if you have a if you need an estate plan, for example, I always encourage folks to make sure you're going with this estate licensed representative, which is what what you would get through Met Law. But somebody who has expertise in the unique type of need you have for the unique type of person you are, go for that rather than shop based solely on price. MetLaw will often kind of push you through their algorithm and give you a name. And that's not to say that folks in the system aren't outstanding attorneys for your need, but I always tell people just shop carefully. Don't go for something simply because it's cheap. Often with an estate plan, it's better to have something than nothing. But I'd rather you have the best plan in place by the best legal help that you need. So I encourage folks to enroll in it if that is what is needed to get you from zero to one when it comes to estate planning. But I always encourage folks to shop carefully. Trump accounts, we may start to see more announcements of employer matching contributions in these plans. If you'd like to know more about these accounts, call back to Sandwich Bread Podcast episode 21. We went into these accounts in detail. But my call to action here is just to keep an eye out. Your employer may announce matching contributions to a Trump account. And as I referenced in episode 21, this may be the singular nudge you need to actually engage with these accounts. Otherwise, I lay out my rationale for exploring other account types first. All right, that concludes Open Enrollment Podcast 2026. Thanks for tuning into this episode and jamming with me a little bit on open enrollment considerations. Big takeaway is this year, rather than just click auto reenroll for everything, take a minute, flip through that 40 page PDF that they sent over to you, understand what you're enrolling in, and maybe you can find some savings in there. Or at very least, a better strategy to the process. That concludes the episode for today. We'll catch you again in a couple weeks. Thanks so much.