There’s no doubt about it – employee benefits are confusing. So much so, in fact, that many workers in the US don’t fully understand the benefits they pay for.
Especially for younger employees, navigating the complex web of benefits and programs and perks can be incredibly stressful. And if you don’t have someone who can translate all the jargon and point you toward your best options, it can feel like you’re in over your head.
Fortunately, with a little prep work and research, you can make sure you’re getting the most out of your benefits.
Here’s the thing: there’s more to compensation than the paycheck you get every month.
And the better you can get a grasp on what your company offers in terms of that full compensation package, the more equipped you’ll be to make use of it.
In this quick guide, we’ll go over the difference between regular and voluntary benefits, as well as the top considerations you’ll want to keep in mind as you navigate open enrollment season.
Regular benefits vs voluntary benefits
If you’re a full-time employee, your company is required by law to provide you with certain benefits along with your salary. These benefits include:
- health insurance
- worker’s compensation insurance
- unemployment insurance
- FMLA protections
The vast majority of companies today also offer paid vacation time and retirement savings plans along with these federally mandated benefits.
Voluntary benefits, on the other hand, are “extra” benefits your company may choose to offer employees, who then can decide whether or not they want to register for them.
Common voluntary benefits include:
- disability insurance
- vision coverage
- dental insurance
- supplemental accident or cancer insurance
- pet insurance
Some companies also offer student loan repayment programs or discounts on things like car insurance.
How to maximize your employee benefits
At the end of the day, employer benefits are there for exactly that, your benefit. And with the right knowledge, you can use these benefits to your advantage, helping you save money, access more resources, and plan for retirement.
Before simply re-enrolling in your choices from last year (or worse yet, just picking an option to get it over with), here are a few things you should consider.
Consider what you actually need
Just because your employer offers it doesn’t mean you need it. When it comes time to think about your benefit options, consider what actually makes sense to pay for. Think about your unique personal and family needs.
Certain common voluntary benefits like vision and pet insurance, for example, aren’t worth it if you have great vision or have an elderly pet.
When it comes to standard health insurance plans, it’s also important to consider your needs to make sure you don’t overspend.
While it’s tempting to view a low-deductible plan as cheaper, if you’re a young, healthy person who doesn’t go to the doctor often, a high-deductible plan with a lower premium cost could save you more money.
Often, these higher-deductible plans also come with the opportunity to save pre-tax money in a health savings account, which you can then use to pay for qualified healthcare costs should they come up.
Don’t rush open enrollment
Choosing your benefits is a big decision, but as Mona Zielke, senior operations and claim executive at Voya, points out, most people spend less than 20 minutes on it.
Give yourself time to research your options and run some numbers. The more time you can set aside to prepare, the more you’ll potentially be able to save – and the less likely you’ll have to make all of your decisions at the last minute.
Ask all the questions
Knowing how to get the most out of your benefits is difficult for anyone, particularly if you’re new to your company (or new to being an employee in general).
Don’t be afraid to ask for clarification on what things mean, and don’t be afraid to ask for advice from your co-workers, reach out to family or friends, or take an hour or two to compile a list of helpful internet resources to answer your questions.
And remember – no question is dumb, especially when your hard-earned money is on the line.
Don’t forget your 401k
Any contribution to your 401k retirement plan is a great start!
Every now and then though, it’s a good idea to revisit your contribution level. Find out if your company offers an employer match, which means your company will match your contributions up to a certain amount. If they do, taking advantage of that will effectively double at least a portion of your retirement savings each month.
Even if your job doesn’t offer an employer match, it’s still worth ramping up your contributions – even if it’s just by a couple of percentage points each year.
It’s estimated that there are nearly 25 million forgotten 401ks floating out there, representing over 1.35 trillion in lost funds. Don’t let one of those forgotten accounts be yours.
Other benefits to consider
Along with providing help with insurance and retirement, some companies also offer employees with other programs that address things like health and wellness.
Employee wellness programs
Popular in many companies today, wellness programs focus on physical and mental health. It’s worth looking into what your company offers, whether that’s free gym memberships, financial wellness education, or healthy snack subscriptions.
Employee assistance programs
An EAP is designed to help provide support to employees through personal challenges such as elder care, legal problems, and substance or alcohol abuse. If your employer offers EAP, you and your family will receive access to resources and services at no cost.
Navigating work and money is hard – but with the right resources, it doesn’t have to be.
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