2025 Open Enrollment Season in Idaho

This is the time of the year when the glossy benefit brochures arrive, summarizing the choices you have in 2025 employee benefits. Look beyond the images of happy employees and uncover details that can impact your bottom line and help you meet your financial goals.

This time of the year is also a good time to assess your retirement plan contribution amounts, investment selections and any perks like employee stock purchase plans.

Here are a few ways you can make smart open enrollment decisions:

Healthcare Plan Selection

You probably have several choices for healthcare coverage. Spend a few hours comparing your options to determine which one is likely to be the best for your family in the coming year. Cost is a key factor, but not the only one. For example, if one of your plan options is an HMO, you will likely be restricted in which doctors you can see, compared to a PPO plan.

When it comes to cost, you are trying to decide which plan is likely to be most cost-effective, taking into account premiums and out-of-pocket costs like deductibles. You usually can’t tell for certain, as you don’t know what your actual healthcare costs will be. Also, you don’t know the “mix” of healthcare costs you will incur, which is how your costs will be spread across key categories like hospitalization, doctor visits and prescription drugs. Each of these categories is usually covered according to a different formula, which makes precise cost estimates difficult. For this reason, don’t overthink things. Make some reasonable assumptions based on your family’s recent history and adjust it for any known upcoming procedures such as surgeries.

High-deductible plans are increasingly attractive options as employers continue to raise the premiums, deductibles and out-of-pocket maximums of PPO and similar plans. Don’t assume “high deductible” means a bad deal, even if you previously considered one.

Your open enrollment guide may contain several different scenarios to help guide your decision. If you are inclined, you can build spreadsheets comparing the the total cost of different plans, using your estimates about your total healthcare costs in the upcoming year. Don’t focus on trying to get it exactly right. You are predicting the future, which is an inexact science. Also, if a plan doesn’t meet your needs, you can always change it in the following year. A little time spent on the decision is a good investment, but it is not worth any stress.

Here are several tips:

Add together the premium savings from a high-deductible plan and any employer contribution to a Health Savings Account (“HSA”). If this total makes up much of the difference between a high-deductible plan’s deductible and that of any alternative plan, the high-deductible plan may be the better choice (and they are often the better choice even if not).

If you are in a higher tax bracket, look hard at any high-deductible plan option. If you can contribute to an HSA and pay your out-of-pocket costs from other sources, the HSA account can grow tax free. See my full article about this strategy here.
Don’t forget about the core purpose of any insurance: to protect you from a large uncertain loss you can’t or don’t want to bear. Compare the out-of-pocket maximum of each plan and ask whether you can afford the difference. If so, it may make sense to bank the monthly premium savings, which are guaranteed, as payment for bearing the incremental risk, instead of paying the insurance company to do so.

Flexible Spending Accounts

If you chose a non-high-deductible plan, you may have access to a healthcare flexible spending account, which is different than a health savings account. You may also be able to contribute to a dependent care flexible spending account Here are the basics:

Account	2025 Contribution Limit (employer can limit)	Use
Health FSA	$3,300	Out-of-pocket healthcare expenses like insurance copayments and deductibles and qualified prescription drugs
Dependent Care FSA	$5,000	Qualified day care expenses for children under 13 and adult dependents who are unable to care for themselves

The money you contribute isn’t taxed, effectively giving you more to spend on out-of-pocket and dependent care costs. However, don’t contribute more than you will need for the calendar year, as you don’t get to keep all unused funds.

For a health FSA, your employer may allow you to carry over up to $640 for use in the following year. Any remaining unused amount will be lost. Alternatively, you may have the ability to use any unused balance within the first 2.5 months of the following year (March 15, 2026 for 2025 contributions). Check your plan details for which option you have.

With a dependent care FSA, you only have a 2.5 month grace period, with no carryover option.

Traditional 401(k) Contributions

There are two reasons to save in 401(k) and similar plans offered through your employer:

Many employers match your contribution up to certain levels. This is free money.

Your contributions to 401(k) and similar plans escape federal and state taxation in the year they are made. If you are in a lower tax bracket when you withdraw the money (such as when you are retired, but not yet receiving social security), you will pay less in taxes.

Open enrollment is a good time to check your contribution amount each year to confirm you are receiving your full employer match, if available. Contribution limits are increasing in 2025. Here they are:

Age	2025 401(k) Contribution Limit
Below 60	$23,500
60-63	$34,750
64+	$31,000

While you are updating your contributions, review your investment options to confirm they continue to be aligned with your retirement goals.

Roth 401(k) Contributions

More employers are offering Roth 401(k)s as an option for retirement savings. If you have a Roth 401(k) option, here are some tips to help you decide whether to contribute:

Roth accounts pay off when your tax rate will be higher when you withdraw the money (the opposite of “traditional” 401(k) accounts). If you are in one of the lower tax brackets now and expect your salary to grow, Roth contributions can make sense.

It can be useful to have accounts that are taxed differently in retirement to give you flexibility in how you make withdrawals to cover your living expense. For example, if you already have a sizable traditional 401(k) balance, you might want a Roth to take money from in years in which withdrawals from your traditional 401(k) would have unpleasant tax consequences (such as increasing your taxable income to a level where you pay more for Medicare).

Employee Stock Purchase Plans

Employee stock purchase plans can give you a raise without any additional effort other than a little time spent every three months enrolling in the plan and managing your account. Plans allow you to buy your employer’s stock, typically at a 10-15% discount. You contribute money from your paycheck during the plan’s offering period, which usually runs for three months, and then the shares are purchased automatically with the discount applied.

For example, if your company stock is trading for $100 on the day of purchase, and your plan has a 15% discount, you get the shares for $85. When you sell the shares, you pocket the discount (plus or minus any gains or losses since purchase), after paying taxes on it.

Plans often require you to hold the shares for a minimum amount of time after the purchase, such as three to six months. During this time, the stock can lose value, so participating is not risk free. However, the discount gives you a buffer before you lose money. I typically recommend that you sell the shares as soon as you can to minimize the risk of losses from market fluctuations.