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University of Michigan New Hires: Quick Tips for Your Initial Enrollment Window

University of Michigan New Hires: Quick Tips for Your Initial Enrollment Window

| July 27, 2022
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Congratulations on starting your new job at the University of Michigan! I often begin working with faculty and staff after they have been working at the University for years. After reviewing their benefits elections, I frequently find individuals that missed essential selections during their initial enrollment window. Although some benefit items can be updated later, specific selections are only available in this initial window.

Indeed, not all employees will want or need the same benefits selections, but there are some common items I think everyone should at the very least be aware of their impacts.

#1 Long-Term Disability Insurance

What is this?

Long-term disability insurance partially protects your income should an illness or injury prevent you from being able to complete the activities associated with your full-time position.

Why would I want to choose it?

The University pays for the default option, but it is not effective until you have been employed for two full years. This option could leave you subject to a substantial risk for a full two years. The maximum option available (if chosen) will make sure your income is covered the whole time you are employed. It will also automatically provide more expansive coverage once you reach your second work anniversary. The critical thing to remember here is that the ONLY time you can make this selection without proof of insurability is during your initial enrollment window. If you have any health history that might limit your future eligibility, this may be your only chance to opt into the plan.

#2 Legal Plan

What is this?

The MetLife Legal Plan provides access to high-quality legal professionals to assist with estate plan document creation (as well as other legal services).

Why would I want to choose it?

Starting a new job with the University is often associated with other major life changes (i.e. moving to a new state, getting married, buying/selling homes, etc.). These are all instances where you would likely want your estate plan created or updated to reflect the changes. You can opt into this plan in the future but only during open enrollment once per year.

#3 Optional Life Insurance

What is this?

While the University provides many great benefits, their Basic life insurance coverage is only $30,000 (regardless of your income level). The Optional Group Term Life offered will cover up to 8 times your salary. Only during this initial enrollment window can you opt for this benefit without proof of insurability (up to $650,000 total).

Why would I want to choose it?

Life insurance is a beneficial tool for individuals that have someone else dependent on their income for daily expenses (i.e. spouse, children, parents, etc.). Given the limited availability of the $650,000 of coverage without proof of insurability, it will often make sense to sign up for this during the initial enrollment period. You will have the option to decrease this in the future at any point in the year.

#4 403B Selection

What is this?

Most people know the 2 for 1 retirement match available at the University of Michigan. Although this benefit is phenomenal, it does not start until you have worked there for 12 months.

Why would I want to choose it?

I have met several individuals that opted out of their 5% 403B Base plan contribution with the intent of signing up after the first year to get the match. However, life got busy, and they found themselves years later without ever having made that selection. They were missing out on the very generous retirement match for years!

#5 Flexible Spending Accounts (FSAs)

What is this?

Flexible Spending Accounts (FSAs) are available for Health Care and Dependent Care expenses. Your contributions selected will allow you to pay for these expenses with pre-tax dollars.

Why would I want to choose it?

If you are spending a large amount on either Health Care or Dependent Care each year, it will help to save you some money by utilizing these plans. Wouldn’t you rather have more money coming to you in your paycheck and less going to taxes?

I hope you found at least one item in this list informative and helpful as you make your initial selections! As busy as you may be starting a new position, I encourage you to take some time for yourself to focus on making the best selections for your financial future. Best wishes as you begin this next step in your career!

We are not affiliated, associated, authorized, endorsed by, or in any way officially connected with the University of Michigan, or any of its subsidiaries or its affiliates.

 

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