Keeping Your Employment Benefits Up-to-date

You've experienced a life change - perhaps you're one of the lucky many who were married on that magical day 07-07-07 - and now it's time to update your financial and other information on hand with your employer. Perhaps you have a pension, 401(k) (or the non-profit semi-equivalent, 403(b)). Depending on your life change - marriage, divorce, a new child - you may have to look at adding or (in the case of divorce) removing a dependent from health insurance.

You should contact your Human Resources office to update your information.

First, the standard disclaimer that nothing in this article should be construed a substitute for legal and other professional advice where the facts and circumstances warrant. If you require legal advice or other professional assistance, you should always consult your own legal or other professional advisors and discuss the facts and circumstances that apply to the you.

Payroll Taxes. There are several reasons you may want to adjust your tax withholdings. Making adjustments for new dependents is fairly straight forward on the Federal W-4 form and you can easily find your state forms online. In Massachusetts, the form is called "M-4." You should consult with a financial planner when making decisions on withholding taxes - withhold too little and you could face a penalty when filing - withhold too much and you're advancing the government money to which it is not entitled at 0% interest. Your financial plan is important, because you and your spouse have to decide who will claim the most exemptions. If you've bought a home and need your cash flow, you should discuss whether or not adjusting your payroll exemptions makes sense.

Health/Welfare Insurance. In adding dependents to your health insurance, you have 30 days in which to make those additions. When you're recently married or have a new baby, you have experienced what is termed a "Qualifying Event." Under this circumstance, you're able to make an addition you would not otherwise be allowed to outside of an open enrollment period, when you're allowed to make wholesale changes - including opting out of one plan and opting into another plan, if your employer offers more than one. Don't forget to add your dependents to your dental insurance as well. Particularly if you're on a family plan already, you may wish to add a new baby to your dental plan. While your new little one won't need the services for some time, the great likelihood is that you forget to add the little one and he or she won't be covered when it's really needed.

You would want to update your beneficiary information with your life insurance company if you have a plan as well.

Pensions/Retirement Plans. Under Federal law, your spouse is generally entitled to be the beneficiary to your pension as well as other benefits should you pre-decease him or her, unless he or she has explicitly waived that right. However, once married, you should update your beneficiary information particularly if you've accumulated a significant nest-egg to avoid conflict. You may wish to add a secondary beneficiary to include a new child - although you will want to carefully investigate this with your financial planner for minor children.

In the case of divorce, your lawyer probably discussed the issue of a "qualified domestic relations order" or "QDRO" with you. This would be the means by which you and your former spouse have divided up pension rights. Particularly if you're remarrying, your former spouse may have a claim to some of your pension benefits.

Emergency Contact Information. You should also update any emergency contact information on hand with your employer and make sure that information stays current. If you started your job years ago and have not updated that information since, you should probably update that as a matter of course. Phone numbers and area codes change frequently and depending on how long ago it was last updated, addresses and even the addition of email addresses could be required.