Making the Most of Your Employee Benefits

Open enrollment, often in the fall, is the time to make employee-benefits decisions for 2019. When you're just starting out, these benefits can be very valuable to help you stretch your income. The following steps can help you make the most of a few key perks that your employer may offer:

Make smart health insurance decisions. If your employer offers several health insurance plans, compare the cost and coverage for all your options. If you're healthy, you may come out ahead with a policy that has low premiums but high deductibles and co-payments. But also consider what your costs might be if you do end up with higher medical expenses. Also compare coverage for any prescription drugs you take, and find out whether your doctors and hospitals are in the plan's network.

Use tax-advantaged accounts for health-care expenses. If your health insurance policy has a deductible of at least $1,350 for single coverage or $2,700 for family coverage, then you may be able to make pre-tax contributions to a health savings account. Then, you can withdraw the HSA money tax-free to pay your deductible, co-payments, and other out-of-pocket medical expenses anytime in the future. If you have a lower-deductible health plan, you may be able to save pre-tax money in a flexible-spending account, which you usually must use up by year-end (some employers let you roll over $500 to the next year).

Sign up for tax-free transportation benefits. Your employer (or your spouse's) may let you set aside money from your paychecks to use tax-free for parking or public transportation expenses.

Tax-free money for child care. If you have kids under age 13, you may be able to set aside up to $5,000 tax-free in a dependent-care FSA to pay for child-care expenses while you and your spouse work.

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