How to Integrate Employee Benefits When You Marry
Marriage can change just about every aspect of your life, especially your finances. You may go from a single income to two, you must file your taxes differently, and you’re now eligible to share other financial opportunities like employee benefits. Many people don’t think through what they want to change about their employee benefits before getting married, but it can be a good idea because you only have a limited amount of time to make a change. Here’s what to think through for each of the important benefits you might want to change.
General Rules for Changing Your Employee Benefits
Depending on your employer and their plans, you generally have up to 60 days to change your benefits after you get married. This falls into the legal window of a “life event” that triggers a change outside of open enrollment for health benefits. If you don’t make a change within the given period after your life event, then you won’t be able to do so until your employer’s next open enrollment period.
Some of the things you may want to consider changing after marriage include the following:
- Adding your spouse to your health insurance.
- Dropping your health insurance so you can be added to your spouse’s plan.
- Buying life insurance or a larger amount of life insurance.
- How you invest in your employer-sponsored retirement plan.
- Opting for alternative insurance coverages like vision insurance.
- Whether it makes sense to get an HSA or FSA.
Your employer might offer benefits you were unaware of or ignored when you started because they weren’t relevant to your situation. Getting married is a great time to re-evaluate everything that your employer offers to see what you may want. Now let’s look at how the three most significant financial considerations could be changed after your wedding.
How to Handle Health Insurance After You Get Married
There can be a lot to consider with health insurance coverage now that you are part of a couple instead of living a single life. These considerations only increase if any children are involved from a previous relationship. You may want to change your coverage, drop your health insurance, and join your spouse’s plan. Here are the significant things to consider:
- The health of your spouse: If your spouse is less healthy than you are, then you may need to find additional coverage or choose a different plan that will benefit your spouse. Additionally, you may want to add something like vision insurance if your spouse wears glasses or contacts, but you don’t.
- How much your employer pays: If you and your spouse work, you’ll want to compare the portion of each employer’s premium. Some employers offer free health insurance for workers and subsidized insurance for their families. If both of your employers provide this, you may want to stay on separate health plans because it will be cheaper.
- Spousal surcharges: Some employer plans will require a spousal surcharge to join their plan if your spouse is offered health insurance at their work. This can make your spouse joining your plan more expensive than keeping your health insurance separate.
- Out-of-pocket costs: You might be able to lower your total out-of-pocket obligation by putting your spouse on your health insurance. Some family or spousal plans offer lower out-of-pocket costs for the entire household than you would each pay separately throughout the year.
These are some of the most popular things to consider. Remember to run the numbers before making a decision, and always ensure you and your spouse have the health insurance coverage you need to stay healthy without breaking the bank.
You May Now Want Life Insurance
Many people decline to buy life insurance through their employer if they are single without a family. This is because there isn’t anyone to support you if something happens to you financially. When you get married, you now have someone that could benefit directly from a life insurance policy if the unthinkable happens. Signing up for a life insurance policy could give you the peace of mind that your spouse will be taken care of in the event of a situation.
Your employer can offer multiple options for life insurance so you can weigh the costs against the potential benefits of the policy to make a decision. Some of these plans will transfer to an individual policy if you leave your employer, but some may no longer be available. Make sure you understand the plan’s rules before you start paying for it.
Investing in Employer Retirement Plans
If you are investing in an employer retirement plan, there can be much to consider. Your employer might offer free money by matching anything you put into the plan up to a certain amount, like 3% of your compensation. If you have the opportunity to earn this at both of your employers, then that is something you likely shouldn’t turn down.
You’ll want to evaluate your employer’s 401(k) investment opportunity and performance or another retirement plan. Your spouse’s plan might have a better return over time, so you may want to consider investing more income into that plan and less into your own. Maximizing dollars into the account that benefits you both long-term is likely the right decision.
Keep in mind that your state might have specific rules about who gets the retirement accounts if the marriage doesn’t work out. You don’t want to invest all of your money into your spouse’s account only to find out later that you can’t touch their 401(k) earnings. The hope is that your marriage never comes to that, but it should be a consideration.
Another consideration when deciding on retirement accounts is the investments made in each account. You may want to put more money in one account over the other based on the type of investments or potential return. For example, one account might invest heavily in real estate while the other invests primarily in environmentally friendly stocks. This can be important before deciding how much and where to invest.
Overall, getting married can be one of the best investments in your life. However, many people fail to consider how their employer benefits will be impacted by marriage. You typically only have a short window to make changes to your benefits after the date of your wedding, so it’s important to evaluate any potential changes and make a decision quickly. Remember that you can always make more changes when your open enrollment period begins.