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4 Life Hacks to Extend the Value of Your Benefits

Life Hacks for Your Benefits

We are all faced with choices every day which can lead you to save time or money. You might plan for retirement by contributing to a 401k plan. Use paid time (and personal savings) for a relaxing vacation. Take out a life insurance policy for added peace of mind. The importance of employee benefits should not be underestimated. There are any number of employee benefits you can take advantage of which either contribute to your financial security or provide you more time to enjoy the little things in life. All too often, you are forced to choose between time and money. But, there are a few times when you don’t need to choose and you can have it all. These four life hacks can extend the value of your benefits while providing the added appeal of both time and money. These are truly health hacks everyone should know!

“Most people value two things when it comes to their business lives: TIME and MONEY. Choose wisely.” — Unknown

Benefits hack #1:
COBRA + HSA = Early Retirement

Are you anxiously awaiting your 65th birthday so you can retire and enroll in Medicare? You have a healthy retirement plan with a 401K, but lack options for comprehensive group medical benefits. Many employees feel forced to remain in a full-time job with medical benefits until they become eligible for Medicare.

Well, 63.5 could be your new target retirement age. Pension plans and retirement health benefits are becoming less common, but Baby Boomers are recognizing the value of existing benefits. Did you know that Federal COBRA is available for up to 18 months after leaving (or losing) a job? Many employees incorrectly assume COBRA is only offered after involuntary termination. In reality, it is generally available to individuals who have chosen to retire early.

Additionally, you may also already have a built-in savings option to pay for your COBRA premiums. A health savings account is not only an important component to paying for medical expenses today, but it is a tool you can use throughout retirement. Did you know that HSA funds can be used to pay insurance premiums during unemployment (such as for COBRA coverage)? As your target retirement age nears, consider contributing the maximum HSA contribution annually. If you are 55 or older, you have the option of an additional $1,000 catch-up contribution. PLUS, an HSA is a great way to pay for out-of-pocket medical expenses throughout retirement. Build up your HSA balance now and early retirement may quickly become a reality.

While you should consult your tax or investment advisor, prior to making your retirement plans official, ask how COBRA and an HSA could fit in with your early retirement strategy. You may also want to seek HSA investment advice for even higher growth potential for your HSA.

Benefits hack #2:
Invest in preventive care

According to the Centers for Disease Control and Prevention, Americans use preventive services at about half the recommended rate. However, the Affordable Care Act (ACA) sets guidelines for many preventive care services that need to be covered without cost sharing. If you are like half of Americans, there is a good chance you are missing out on some of these covered preventive services. Check with your health plan to determine the specific preventive care services covered and when you can receive these.

A post by the World Research Institute, shows the return on preventive care.

“Preventive healthcare should be considered an investment or personal insurance, with keeping your retirement nest egg as your return on investment…Either invest a relatively small amount (which may be covered 100% by insurance) in order to stay in good health, or pay a huge amount later to treat the disease that is bound to eventually hit us.”

Preventive care may not provide immediate returns on your time, but the long-term pay-offs are clear. A healthier you later in life translates to a higher quality of life and a less financially stressful one. By taking advantage of preventive care services now, you build a foundation for the future.

Benefits hack #3:
Skip Dental Insurance and opt for a Limited FSA

While insurance is always a game of odds, the odds may not be in your favor when it comes to dental insurance. DentalPlans.com explains that dental insurance typically only covers you up to a specific limit, typically $1,000 to $1,500 annually. When your reimbursable dental costs go over that limit, you are responsible for paying your dental care costs for the rest of the year. This essentially means you are paying premiums that likely exceed the services that you will utilize. Moreover, when you really need coverage, you will likely exceed the annual benefit amount and end up paying out of pocket anyways. You would be better off enrolling in a Limited FSA which can be used to directly pay out-of-pocket dental and vision expenses. If your employer offers a rollover option, any unused funds up to $500 may be rolled into the next plan year.

Benefits hack #4:
Save on non-emergency care

The next time you find yourself with the sniffles, a sore throat or that weird rash, opt to stay inside. The benefits of telehealth or remote medical services provide a win-win all around. Not only do you save time, you save money and have a hassle-free medical assessment. Remote medical services are video doctor visits. These “visits” include assessment, diagnosis and prescriptions for many urgent care, preventive services or treatment for chronic conditions. Within minutes, you are connected to board-certified doctors over live video. No more waiting rooms or questionable drives to the doctor’s office while under the influence of cold medicine.

Consider using Doctor on Demand or another remote medical service provider the next time you find yourself in need of some common care.

Bonus: Benefit hack #5
Let your HSA grow

Save receipts and treat yourself in retirement. There is no requirement to use HSA funds at the time you incur a medical expense, but that expense is still eligible for a tax-free reimbursement. Let’s just say for example you save your receipts from eligible medical expenses over the life of your HSA and never withdraw from the account. By age 65 (or 63.5 if you opted for early retirement), you accumulated over $75,000 in receipts for eligible medical expenses. You are really itching for a new boat and decide to take the $75,000 out of the HSA and happen to use the money to buy that boat. Since you kept good records and have the receipts supporting the medical expenses, you can sit back and enjoy the view.

Making the most of your employee benefits

We are all looking for an opportunity to save time and money, but we often forget about the opportunities right in front of us. Or maybe, we just need a little different perspective to recognize the potential and maximize our employee benefits.

We want to hear your best life hack and benefit hack ideas!


The above “Life Hacks” are provided for illustration purposes only and are not intended to represent legal, benefits or financial advice. Always consult your financial or benefits advisor before taking any actions affecting your retirement or benefits planning.