Walmart Benefits Annual Enrollment: How to Choose Disability, Life and Medical Insurance

Annual Enrollment for Walmart Associates is currently open until November 10th, 2023!

We spend a lot of time discussing building wealth, but not much time on protecting it. Annual enrollment is mostly focused on ways to protect your wealth.

Nobody likes dealing with company benefits, but it is important.

In this article, I'll discuss the following topics:

1.) Disability Insurance provides income replacement if you are incapable of working. Associates must opt in and pay for Long-Term Disability.

Is it a good idea to opt for a Long-Term Disability policy? Most likely.

2.) Life Insurance replaces future earnings if you prematurely pass away. Associates must elect in and pay for coverage above $50,000.

Is it a good idea to have all life insurance through your employer? Probably not.

3.) Medical Plans protect your wealth from crippling medical bills.

Should you opt for a low or high deductible plan? For a healthy family, a high deductible, low premium plan is most cost effective. Especially if Walmart contributes to your Health Savings Account.

Disability Insurance

This topic is dry so I'll be short and to the point.

Short-Term Disability replaces your salary for 25 weeks if you are incapable of working.

Good news! You do not need to make a decision on Short-Term Disability, Walmart pays for it!

If you qualify, the Walmart provided Short-Term policy provides 100% of Base Salary for 6 weeks.

After 6 weeks, the policy will pay you 75% of base salary for an additional 19 weeks - 25 weeks of total coverage.

If your "disability" is due to pregnancy, you are eligible to receive an additional 3 weeks of 100% base salary.

Long-Term Disability replaces a portion of salary after 25 weeks of Short-Term Disability

The Associate elects and pays premiums for Long-Term Disability insurance.

There are two Long-Term Disability Plans: 1.) Long-Term Disability Plan and 2.) Long-Term Disability Enhanced Plan.

The Long-Term Disability Plan replaces 50% (60% for Enhanced) of your average monthly wage. The maximum amount is $15,000 per month ($18,000 for Enhanced.)

Takeaway: It is too common for high earning corporate professionals to lack long-term disability insurance. It is not expensive and you will be glad you have it if you ever need it.

Life Insurance

Life Insurance pays cash to your beneficiaries if you pass away.

Walmart pays the premium for term life insurance up to $50,000. You will likely need more than $50,000.

For additional coverage, you have two choices. First, you may purchase a term policy through Walmart. Second, you may purchase a policy outside of Walmart.

It typically makes sense to purchase some coverage outside the Walmart Group Term Life policy. This way if you leave Walmart, you reduce the risk of losing your life insurance policy. Yes, you may be able to "port" or "convert" the Walmart policy, but it is simpler to just have an external policy if the economics make sense.

For example, you need $1,000,000 of term for the next 10 years - you could have $300,000 with the Walmart policy and $700,000 outside the Walmart policy. If the price is the same, it may make sense to have all coverage outside Walmart. You want to minimize the risk that you lose coverage if your health changes AND you leave Walmart.

Takeaway: It is a good idea to spread risk across multiple term life policies to reduce the risk of losing coverage.

Medical Plans

The medical plans offered by Walmart are vast.

I'll focus on the "nationwide options" which include versions of the Premier, Saving and Contribution Plans.

Certain locations such as Northwest Arkansas do have location specific plans. With the exception of not offering out of network coverage, the details are pretty similar to "nationwide" plans.

Here are some pros and cons for the Premier, Saver and Contribution Plans.

Finally, if you are located in Northwest Arkansas you have access to the Mercy Arkansas Local Plan. This is a higher premium, lower deductible plan.

Takeaway: Obviously the choice of Medical Plan is VERY personal. For a healthy family with sufficient savings, the High Deductible, Low Premium Plans (Saver and Premier) are most cost effective. In the Saver Plan, Walmart contributes up to $700 to your HSA.

Wrap-Up

I hope this information helps as you navigate annual enrollment at Walmart. To sum it all up:

Long-Term Disability Insurance: It is a good idea to have Long-Term Disability insurance to protect your savings against a prolonged period of no earnings.

Life Insurance: It is a good idea to purchase some coverage outside the Walmart Group Term Life Plan. Term policies are typically much more cost effective than a permanent life insurance policy.

Medical Plans: High Deductible, Low Premium (HDLP) Plans are typically most cost effective for healthy individuals and families.

If you are interested in scheduling a free consultation to discuss your Walmart 401(k) Plan, Deferred Compensation Plan and other benefits, please schedule time below.

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Mark Chisenhall, CFA is the founder of Taurus Financial Planning, a Bentonville, AR wealth management firm specializing in helping Walmart Vice Presidents and Sr. Directors reduce taxes, optimize investments, and accelerate retirement.

This publication is for informational purposes only and is not intended as tax, accounting or legal advice or as an offer or solicitation of an offer to buy or sell or as an endorsement of any company security fund or other securities or non securities offering. This publication should not be relied upon as the sole factor in an investment making decision. Past performance is no indication of future results. Investment in securities involves significant risk and has the potential for partial or complete loss of funds invested. It should not be assumed that any recommendations made by the Author, in the future, will be profitable or equal the performance noted in this publication.

This information is provided as a guide to assist you in your financial planning. The specific examples are provided for illustration purposes only and are not representative of specific investments or guarantees of future returns. Please consult with a professional for specific questions regarding your particular situation.