Essential Guide to Open Enrollment for 2026

September 30, 2025 — Sam H. Fawaz

As we approach the annual open enrollment period for most employers (typically October through November 2025), now is the perfect time to review your employee benefits and make informed decisions that will impact your financial well-being throughout 2026.

Why Open Enrollment Matters More Than Ever

Open enrollment is your once-a-year opportunity to make changes to your employer-sponsored benefits. Outside of qualifying life events (marriage, divorce, birth of a child, etc.), this is likely your only chance to:

• Switch health insurance plans or carriers

• Adjust life and disability insurance coverage amounts

• Modify flexible spending account (FSA) elections

• Review and update beneficiary information

• Evaluate supplemental benefits like vision, dental, or critical illness coverage

Key Areas to Review During Open Enrollment

Health Insurance

Health insurance, especially catastrophic health insurance, is not optional for anyone, as healthcare and hospitalization costs continue to skyrocket.

• Compare your plan options carefully: Don’t automatically re-enroll in your current plan. Premiums, deductibles, and covered providers may have changed.

• Consider your 2026 healthcare needs: Are you planning any major medical procedures? Do you have ongoing prescriptions? Select a plan that matches your anticipated usage.

• Network providers: Verify that your preferred doctors and hospitals are still in-network for your chosen plan.

• Supplemental Insurance: Analyze the real total cost of dental and eye care insurance by comparing total out-of-pocket costs with and without insurance. With meager benefits, limited payments, and high co-pays or co-insurance, the premiums may not be worth the coverage provided, and you therefore may want to forego coverage.

• Total cost analysis: Look beyond monthly premiums to include deductibles, co-pays, and out-of-pocket maximums. Are you a good candidate for a high-deductible health plan (i.e., you’re generally in good health and have minimal consumption of healthcare), which makes you eligible for a health savings account (HSA)?

Life and Disability Insurance

• Life insurance: Review your current coverage amount. Has your income increased? Do you have new dependents? Consider whether your current coverage adequately protects your family’s financial needs. Consider whether you really need accidental death and disability insurance and whether it’s worth the extra cost.

• Disability insurance: Evaluate both short-term and long-term disability options. Your income is likely your most valuable asset—protect it accordingly. For most people, maximizing available disability insurance coverage is a great idea.

• Supplemental coverage: Group rates through your employer are often more affordable than individual policies purchased elsewhere.

Flexible Spending Accounts (FSAs)

• Healthcare FSA: Estimate your out-of-pocket medical expenses for 2026, including prescriptions, dental work, and vision care.

• Dependent Care FSA: If you have qualifying childcare or eldercare expenses, this pre-tax benefit can provide significant savings.

• Remember the “use it or lose it” rule: Most FSAs have limited carryover provisions (some plans require you to use all amounts by December 31; others give you a few extra months), so plan and understand your elections carefully.

Smart Decision-Making Tips

1. Gather last year’s data: Review your 2024-2025 healthcare spending, insurance claims, and FSA usage to inform your 2026 decisions.

2. Calculate total annual costs: Don’t focus solely on monthly premiums. Add up premiums, deductibles, and expected out-of-pocket expenses for a comprehensive view.

3. Consider your family situation: Changes in marital status, number of dependents, or family health conditions should influence your benefit selections. Compare benefits and costs if both spouses work, and make choices that fit your family’s needs.

4. Think ahead: Are you planning a family addition, major surgery, or a career change in 2026? Factor these into your benefit choices.

5. Update beneficiaries: Use this time to ensure your beneficiary information is current for all accounts (e.g., 401(k), 403(b), 457, 401a plans) and insurance policies.

6. Ask questions: Don’t hesitate to attend employer benefit sessions or contact HR for clarification on plan details.

We’re Here to Help

Navigating open enrollment can feel overwhelming, but you don’t have to do it alone. We are available to consult with you on your benefit elections and help you make informed decisions that align with your financial goals and family needs.

To ensure we can provide timely guidance and help you meet enrollment deadlines, please contact us before your employer’s enrollment period closes. Many companies have strict deadlines in late October or November, and missing these dates could mean waiting until next year to make changes.

Take Action Now

• Mark your calendar: Note your employer’s specific open enrollment dates

• Gather your information: Collect recent medical bills, current benefit summaries, and family health information.

• Don’t procrastinate: The best benefit choices require careful consideration—start planning now.

Your employee benefits are a significant part of your total compensation package. Making thoughtful, informed decisions during open enrollment can save you money and provide better protection for you and your family throughout 2026.

Sam H. Fawaz is the President of YDream Financial Services, Inc., a fee-only investment advisory and financial planning firm serving the entire United States. If you would like to review your current investment portfolio or discuss any other tax or financial planning matters, please don’t hesitate to contact us or visit our website at http://www.ydfs.com. We are a fiduciary financial planning firm that always puts your interests first, with no products to sell. If you are not a client, an initial consultation is complimentary, and there is never any pressure or hidden sales pitch. We begin with a thorough assessment of your unique personal situation. There is no rush and no cookie-cutter approach. Each client’s financial plan and investment objectives are unique

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Should You Consider a Health Savings Account?

April 28, 2014 — Sam H. Fawaz

As health care costs continue to rise, consumers must find ways to ensure that they have the funds to pay for medical expenses not covered through their insurance. One way to save specifically for health care costs is to fund a health savings account, or HSA.

HSAs are tax-advantaged savings accounts set up in conjunction with high-deductible health insurance policies. Enrollees or their employers make tax-free (pre-tax) contributions to an HSA and typically use the funds to pay for qualified medical care until they reach their policy’s deductible. The contribution made to the health savings plan is made in addition to your health insurance premium.

HSAs are not for everyone, and it is important to understand how they work before considering them to help fund health care costs.

Understanding HSAs

You are eligible for an HSA if you meet all four of the following qualifying criteria:

  1. You are enrolled in a qualified high-deductible health insurance plan (known as an “HDHP”).
  2. You are not covered by any additional health plan(s).
  3. You are not eligible for Medicare benefits.
  4. You are not a dependent of another person for tax purposes.

HSAs are generally available through insurance companies that offer HDHPs. Many employer-sponsored health care plans also offer HSA options. Although most major insurance companies and large employers now offer an HSA option under their health plan, it’s important to remember that most health insurance policies are not considered HSA-qualified HDHPs, so you should check with your insurance company or employer to see how an HSA plan might differ from your current plan.

There are maximum contribution limits that are adjusted annually. Contributions are made on a before-tax basis, meaning they reduce your taxable income. Note that unlike IRAs and certain other tax-deferred investment vehicles, no income limits apply to HSAs.

HSAs offer investment options that differ from plan to plan, depending upon the provider, and allow users to carry account balances over from year to year. Earnings on HSAs are not subject to income taxes.

Any medical, dental, or ordinary health care expense that would qualify as a tax-deductible item under IRS rules can be covered by an HSA. A doctor’s bill, dental procedure, and most prescriptions are examples of covered items. See IRS Publication 502 for a definitive guide of covered costs. If funds are withdrawn for any purposes other than qualifying health care expenses, you will be required to pay ordinary income taxes on amounts withdrawn plus a 10% additional federal tax.

Here are some pros and cons of this product.

Pros

  • HSAs offer a significant annual tax deduction, making them particularly appealing to individuals in higher tax brackets.
  • Withdrawals for qualifying health care costs (including long-term care insurance) are tax free.
  • Investment income in HSAs also accumulates tax free.

Cons

  • Since HSAs must be tied to HDHPs, their ultimate savings must be weighed against how such plans stack up against more traditional plans, which may offer significantly better coverage.
  • HSAs may not offer the flexibility and portability that today’s mobile American family requires, especially given that health plan offerings differ significantly from employer to employer, and many smaller institutions have yet to offer an HSA option.
  • For more information on HSAs, see the U.S. Treasury’s Health Savings Account resource page.

If you have any questions about Health Savings Accounts or any other financial planning matters, please don’t hesitate to contact us or visit http://www.ydfs.com

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