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Take full advantage of benefits

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It's that time again ... time for U.S. employees to evaluate their benefit options and make their selections for next year. Whether they enroll via the Internet, by phone or by paper forms, employees today have more choices than ever before when it comes to benefits, and the wide variety can be confusing, according to Hewitt Associates.

"With so many options, and all kinds of tools, its a shame that so many people wait until the last minute to make these important decisions concerning their financial well being," said Wendy Rhodes, communication consultant for Hewitt Associates. "By taking the time to understand their enrollment choices, enrollment tools and individual needs, employees will be better able to get the most out of their benefit plans."

Hewitt Associates, a leading management consulting firm specializing in human resource solutions and benefits outsourcing, plans to handle benefits enrollment on behalf of more than 7 million employees this year. The following are tips for employees as they begin the process of benefits enrollment.

1. Re-think your medical plan choice.

The annual enrollment period provides an ideal opportunity for you to re-evaluate your medical plan. Are you satisfied with your current medical plan? Are you comfortable with your current primary care physician? If not, now is the time to consider making a change.

2. Contribute as much as possible to your 401(k) plan. At the very least, contribute enough to receive all of your company's matching contributions.

Your 401(k) plan could very well be your main source of retirement income down the road, and the earlier you start contributing, the better off you'll be in the long run. Start now!

Many companies make matching contributions to their employees' 401(k) plans. In order for you to reap the benefits of this "free money," figure out how much you need to contribute to get the maximum employer contribution.

3. Take advantage of the tax saving potential through your benefits.

Many of the benefits offered by your employer can lower your taxable income, putting you in a lower tax bracket and saving you dollars come April 15. Some of these benefits include your 401(k) plan, health care spending account and dependent-care spending account.

4. Take advantage of your health care spending account.

Consider setting up a health care spending account, even if your tax savings won't be large. A spending account helps employees pay, in a tax-effective way, for predictable health expenses not covered by their medical plan.

Employees elect to contribute a portion of their before-tax income to a spending account, enabling them to stretch the dollars available for services and lower taxable income at the same time.

5. Take advantage of your dependent-care spending account, if appropriate.

Some employers offer dependent-care accounts, which help employees pay for child care and other dependent expenses in a tax-effective way.

Employees make a before-tax contribution to their dependent-care accounts directly out of their paychecks. You may wish to contact a tax adviser to determine if a dependent-care spending account is the best choice for you.

6. Assess your life insurance and disability protection needs.

Most employers automatically provide some life insurance benefits for their employees. However, the enrollment period is a good time to assess whether your circumstances call for additional life insurance, either through your employer's plan or through another carrier. Questions you may want to ask yourself include:

?What is your family situation? Who is dependent on your income?

?Would your personal savings provide adequate protection for your family if you die?

?Do you have a need for life insurance on your spouse or dependents?

However, most people are more likely to be disabled than die at a young age. If you were disabled and couldn't work, think about how you would meet your expenses. Do you have savings or other income sources? If so, how long would they last? Long-term disability protection can help you with your expenses after six months of disability.

7. Consider long-term care coverage, even if you're young.

Long-term care coverage is intended to provide services and care, as opposed to income replacement, in the event of a serious injury or illness.

Since most people are more likely to be disabled than die at a young age, this coverage is worth considering even if you're young.

8. Do your homework.

Today, a multitude of resources are available for you and your family to make smart choices about your benefit coverage. Learning all you can about these benefits will enable you to take full advantage of what's available. Resources include the Internet, hotlines, benefit fairs, printed material from your employer, customer service centers and meeting your primary care physician.

9. Know the tools available to you.

Many organizations are expanding the array of enrollment tools available to employees. Along with the traditional print summaries (often mailed to employees at home), many employees also have access to automated telephone enrollment lines, online enrollment, a hotline, or a combination. Find out what tools are available to you and use them.

10. Don't miss the deadline!

When you receive your enrollment packet for next year, pay attention to the deadline for submitting your enrollment choices. If you fail to enroll on time, you automatically will be assigned coverage that you may not wantÊ... and you won't be able to take advantage of a health care spending account or a dependent-care account.

Plus, if you wait until the last minute to enroll, you won't be able to do your homework to get the most out of your benefits.

INSET CAPTION:

Employees today have more choices than ever before when it comes to benefits, and the wide variety can be confusing.

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