3 Benefits That Get Missed Most During Open Enrollment

Over 50% of employees regret their open enrollment choices. Discover the 3 most overlooked benefits that could save mid-career professionals thousands annually—and how to maximize them.

Introduction

Every fall, millions of mid-career professionals rush through open enrollment, spending an average of just 30 minutes reviewing their benefits options. The result? More than half of employees regret their choices, and 39% aren't using valuable benefits they're already paying for.

If you're juggling a growing income, kids approaching college age, and competing financial priorities, missing out on key benefits during open enrollment isn't just an oversight—it's costing you thousands of dollars in lost savings and financial protection.

In this post, we'll break down the three most commonly overlooked benefits during open enrollment, explain exactly what you're leaving on the table, and show you how to optimize each one to protect your family's financial future.

💰 Benefit 1: Supplemental Life Insurance Through Your Employer

What Most People Miss

Your employer's basic life insurance policy typically covers only 1-2 times your annual salary—often inadequate for mid-career professionals with families and significant financial obligations. Yet over 40% of eligible employees skip supplemental life insurance coverage during open enrollment, assuming the basic policy is sufficient.

The Real Opportunity

Supplemental life insurance through your employer offers coverage at group rates that are significantly cheaper than individual policies. Here's what that looks like in practice:

- For a 40-year-old professional: An additional $500,000 in coverage typically costs less than $30 per month through an employer plan

- Individual market comparison: The same coverage purchased independently could cost 2-3 times more, especially if you develop health conditions later

- Coverage flexibility: Most plans allow you to add 3-5 times your salary in supplemental coverage, up to $500,000 or even $1 million in some cases

Why This Matters for Your Family

If you're the primary breadwinner with kids approaching college, losing your income would create immediate financial hardship. Consider this hypothetical scenario: A family earning $150,000 annually with a basic 2x salary policy ($300,000) would still face a significant income gap. Adding $500,000 in supplemental coverage for $30/month ($360/year) provides meaningful protection for less than 0.25% of annual income.

Action Step

✅ Calculate your actual coverage need using the "10x income" rule of thumb, then compare it to your current basic policy. Fill the gap with affordable employer-sponsored supplemental coverage before considering more expensive individual policies.

📊 Benefit 2: Health Savings Accounts (HSAs) – The Triple Tax Advantage You're Ignoring

What Most People Miss

Despite being one of the most powerful tax-advantaged accounts available, approximately 55-60% of eligible employees either don't select an HSA-eligible health plan or fail to contribute to their HSA. Many mid-career professionals assume HSAs are only for those who can't afford traditional health insurance—a costly misconception.

The Triple Tax Advantage Explained

HSAs are the only account in the tax code that offers three distinct tax benefits:

1. Tax-free contributions: Money goes in pre-tax, reducing your taxable income today

2. Tax-free growth: Investments grow without capital gains or dividend taxes

3. Tax-free withdrawals: Money comes out tax-free for qualified medical expenses at any age

Bonus feature: After age 65, you can withdraw HSA funds for *any* purpose without penalty (though non-medical withdrawals are taxed like a traditional IRA), making it function as an additional retirement account.

2025 Contribution Limits

For 2025, the IRS has set HSA contribution limits at:

- $4,300 for individual coverage

- $8,550 for family coverage

- Additional $1,000 catch-up contribution if you're age 55 or older

Real-World Impact

Consider this hypothetical example: A mid-career professional in the 24% federal tax bracket who maxes out a family HSA ($8,550) saves approximately $2,052 in federal taxes alone in the contribution year. Over 20 years with modest 6% average annual growth, that account could grow to over $330,000 tax-free—money that can cover medical expenses in retirement or supplement your retirement income.

Common HSA Mistakes to Avoid

❌ Using your HSA like a checking account: Many people withdraw funds immediately for current medical expenses, missing the long-term growth opportunity

✅ Better strategy: Pay current medical expenses out-of-pocket if possible, invest HSA funds for long-term growth, and save receipts. You can reimburse yourself tax-free years later while your HSA balance compounds.

Action Step

🎯 Compare your current health plan's total costs (premiums + expected out-of-pocket expenses) against an HSA-eligible high-deductible health plan. If you're generally healthy and can afford the higher deductible, the tax savings and growth potential often outweigh the premium differences.

🛡️ Benefit 3: Disability Insurance Enhancements That Protect Your Family's Lifestyle

What Most People Miss

Approximately 70% of workers rely solely on their employer's basic disability insurance coverage without understanding its significant limitations. For mid-career professionals, this gap can be financially devastating.

The 60% Problem

Most employer-provided long-term disability (LTD) plans have two critical limitations:

1. They replace only 60% of your pre-disability income

2. That benefit is taxable if your employer pays the premiums

Here's the math that catches most people off-guard:

Hypothetical scenario: You earn $120,000 annually

- Basic LTD benefit: $72,000 (60% replacement)

- After taxes (assuming 20% effective rate): ~$57,600

- Actual replacement rate: Less than 48% of your original income

For families accustomed to a $120,000 lifestyle with mortgage payments, college savings, and other fixed expenses, suddenly living on less than half that income creates immediate financial stress.

Why This Matters More Than You Think

According to the Social Security Administration, more than 1 in 4 of today's 20-year-olds will become disabled before reaching retirement age. For mid-career professionals, the risk is real—and the financial consequences are severe without proper coverage.

Enhancement Options to Consider

Option 1: Increase your employer coverage percentage

Many employers allow you to purchase additional coverage up to 70% or even 80% of income for a modest increase in premiums.

Option 2: Purchase supplemental individual disability insurance

An individual policy can fill the gap between your employer coverage and your actual income needs. Bonus: Individual policies you pay for with after-tax dollars provide tax-free benefits.

Option 3: Consider "own-occupation" vs. "any-occupation" definitions

Premium policies define disability as the inability to perform *your specific occupation*, not just *any* occupation. This distinction matters significantly for specialized professionals.

Action Step

🔍 Review your current disability coverage details: What percentage of income does it replace? Is the benefit taxable? What's the definition of disability? Then calculate your family's actual monthly expenses and determine if the coverage gap warrants enhancement.

The Cost of Inaction: What You're Really Leaving on the Table

When you add up the missed opportunities across these three benefits, the numbers are staggering:

- Supplemental life insurance: Passing on $500,000 in affordable coverage that would cost just $360/year

- HSA contributions: Missing $2,000+ in annual tax savings plus decades of tax-free growth potential

- Disability insurance gaps: Risking a 40-50% income reduction when you can bridge the gap for often less than 1% of your salary

For mid-career professionals with expanding incomes and growing family responsibilities, these aren't minor oversights—they're significant financial vulnerabilities that can be addressed for a relatively small investment during open enrollment.

Your Open Enrollment Game Plan

Before Open Enrollment Begins:

1. 📋 Gather your current coverage documents and review what you selected last year

2. 💡 Calculate your family's actual financial needs for life insurance, healthcare, and income protection

3. 📈 Review your current financial situation: Has your income increased? Have your family circumstances changed?

During Open Enrollment:

1. ⏰ Block out dedicated time (more than the 30-minute average most people spend)

2. 🧮 Run the numbers on each benefit option using your employer's planning tools

3. ✅ Don't default to last year's elections—your situation has likely changed

4. 📞 Ask questions if something is unclear—your HR team or benefits advisor is there to help

After Open Enrollment:

1. 📁 Save all your enrollment confirmations and benefit summaries

2. 📅 Set a calendar reminder to review beneficiaries and coverage amounts annually

3. 💰 Adjust your budget to account for any premium changes or new HSA contributions

Key Takeaways

🎯 Supplemental life insurance through your employer is dramatically cheaper than individual coverage—don't wait until you need it to realize your basic policy isn't enough.

🎯 Health Savings Accounts offer unmatched tax advantages that can save you thousands immediately and build significant wealth over time—if you're eligible, strongly consider an HSA-eligible plan.

🎯 Disability insurance enhancements are essential for protecting your family's lifestyle, especially when basic employer coverage replaces less than half your take-home income.

🎯 The window to make these changes is narrow—missing open enrollment means waiting another full year to optimize your benefits.

Conclusion

Open enrollment isn't just an administrative checkbox—it's one of the most important financial planning opportunities you have each year. For mid-career professionals balancing growing incomes, approaching college expenses, and long-term financial security, the benefits you select (or skip) during this window can have lasting implications for your family's financial well-being.

The good news? These three commonly missed benefits are typically affordable, accessible, and specifically designed to address the exact financial risks you face. By taking a strategic approach to open enrollment and optimizing your benefit elections, you can save thousands in taxes, secure critical financial protection, and build long-term wealth—all through benefits you're already eligible for.

Don't be part of the 50% who regret their choices or the 39% who leave valuable benefits on the table. This year, make open enrollment count.

Ready to Optimize Your Benefits Strategy?

Navigating open enrollment decisions alongside your broader financial plan can be complex, especially when you're juggling competing priorities like college funding, retirement savings, and current lifestyle needs.

If you're a mid-career professional who's never worked with a financial advisor before and want personalized guidance on maximizing your employee benefits within your complete financial picture, I'm here to help.

Schedule a complimentary consultation to discuss how to optimize your benefits selections and integrate them into a comprehensive financial strategy for your family.

Feel free to download our Free Guide to Open Enrollment

About the Author

Tim Witham is a financial advisor with Balanced Life Planning, specializing in comprehensive financial planning for mid-career professionals and growing families. With expertise in investment strategy, college planning, and retirement preparation, Tim helps clients make informed decisions that align with their values and long-term goals.

Sources & References

1. [IRS Publication 969 - Health Savings Accounts](https://www.irs.gov/publications/p969)

2. [IRS Revenue Procedure 2024-25 - HSA Contribution Limits](https://www.irs.gov/pub/irs-drop/rp-24-25.pdf)

3. [HSA Bank - IRS Contribution Limits](https://www.hsabank.com/HSABank/Learning-Center/IRS-contribution-limits-and-guidelines)

4. [Benefitfocus - 2024 State of Employee Benefits Report](https://www.benefitfocus.com/sites/default/files/resources/State%20of%20Employee%20Benefits%20Report%202024.pdf)

5. [BenefitsPRO - More Than Half of U.S. Employees Regret Open Enrollment Decisions (October 2024)](https://www.benefitspro.com/2024/10/18/more-than-half-of-u-s-employees-regret-their-open-enrollment-decisions-study-finds/)

6. [Employee Benefit News - Why Million-Dollar Benefits Go to Waste (October 2025)](https://www.benefitnews.com/advisers/opinion/why-million-dollar-benefits-go-to-waste)

7. [SHRM - Employers' Biggest Open Enrollment Task (August 2024)](https://www.shrm.org/topics-tools/news/benefits-compensation/employers--biggest-open-enrollment-task--convincing-employees-to)

Compliance Disclosure

DISCLOSURE: The information contained herein has been obtained from sources believed to be reliable but cannot be guaranteed accuracy. Balanced Life Planning is a registered investment adviser. Registration does not imply a certain level of skill or training. Information presented is for educational purposes only, are subject to change from time to time and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.

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