How to Make the Most of Your Employee Benefits
Want to increase your income today — without the hassle of renegotiating your salary with your employer? One possible way is knowing how to get the most out of your workplace benefits.
The U.S. Department of Labor estimates that your employer-sponsored benefits are worth roughly 30 percent of your salary. (1) And many of us aren’t taking advantage of everything our employers put on the table — we may not even know all that’s available.
Indeed, roughly 32 percent of employees report to being confused about their benefit packages, according to a study from business management consultant Businessolver.
That’s essentially money they — and most of us — may be leaving behind.
Even if you think you’re maxing out your benefits, you owe it to yourself to look at your employer’s most recent benefits package. Indeed, the pandemic prompted many companies to revamp their benefits packages to allow for remote work needs and telemedicine, according to the Society for Human Resource Management. (2)
Revisit Basic Benefits
First of all, whether you are a new hire or veteran, it’s a good idea to check on your basic benefit package to make sure you are taking advantage of all that may be offered.
For many, but not all, employers this includes:
Long term disability income insurance: 1 in 4 people in their 20s working today will become disabled before retirement age, according to the Social Security Administration. (7) If your employer offers it, consider it. If not, you many want to consider getting it on your own.
Life insurance: Group policies offered through an employer can offer attractive rate, although there may be limitations on the amount of coverage. Also, some employer policies are portable, meaning if you leave the job, you can take the insurance with you. But this isn’t the case for all employer-offered policies. You should check what your employer’s group policy offers against your own life insurance needs.
Retirement: Some employers will match contributions to various savings programs, particularly 401(k) plans, up to a certain percentage. This is essentially “free money” that goes straight into your savings. Make sure you are taking advantage of it. It’s also a good idea to check what those savings are being invested in and whether it meets your risk profile.
Health insurance deductibles: If you meet your deductible for a calendar year, try to get as much needed medical care before the deductible resets at the beginning of the next year.
Telecommuting: Especially in the wake of the pandemic, many employers now offer flexible working hours and arrangements. Investigate what’s available.
Beyond these benefits, there may be others to investigate. These include:
Your HSA. If your employer offers a Health Savings Account (HSA), check it out. There’s a triple tax benefit: money goes into your account tax-free; it grows tax-free and when you need to spend it on qualified health expenses, there are no taxes due. Experts suggest that while an HSA can’t replace a traditional retirement plan, it can bolster retirement savings if pre-retirement medical expenses do not exhaust the account. (4) Left to grow for decades when you’re younger and presumably healthier, you could have money to devote to medical expenses later in life. On top of that, two-thirds of the employers offering HSAs also contribute to their employees’ HSAs accounts, according to SHRM.
Discounted Employee Stock Purchase Program (ESPP). Employees can use this benefit as a saving vehicle with an automatic upside, since many employers provide a 15 percent discount on the stock. Indeed, some ESPPs have a “look back” provision that reduces risk and offers the possibility of a better return since the purchase price is based on the stock price either at the beginning of the offering period or the end, whichever is lower. Of course, there’s no guarantee the stock’s value will rise, but you’re buying it for less than the current market value.
Telemedicine. Being able to take care of health issues without leaving the office can also add up to savings. Some employers offer access to services that provide non-emergency healthcare via video and smartphone app, allowing employees to get medical consultations, diagnoses, and prescriptions without setting foot in a doctor’s office or urgent care center.
Even if you prefer to see your doctor in person, consider telemedicine for follow up visits to save yourself time waiting at the doctor’s office and a second co-pay.
Tuition reimbursement. Getting reimbursed for a degree program is a great perk for employees, with 48 percent of organizations offering tuition assistance for undergraduate courses according to SHRM. (2) And some employers offer repayment for dependents’ college education. For some workers that benefit is a major attraction of their current job.
Discounts on everyday household expenses. Many employers offer perk programs, with discounts on everything from event tickets to travel to car purchases.
At a basic level, these programs typically consist of passing along discounts to employees from local, regional, or national merchants through the company’s intranet or email. Or the program is handled by a vendor that oversees an online portal that employees can use to make purchases from a variety of retailers and service providers. The vendor collects fees from the merchants on its portal based on sales and with no administrative expense for the employer.
All those unused vacation days. Paid time off is another benefit you shouldn’t throw away. Some employers have expiration or “use-by” dates on vacation time. Check with your employer. Remember, loyalty to a job is admirable, but it is important to take time away from the job to re-set. Also, in some industries, the work pace sometimes ratchets up to the point where employees may use only a portion of the vacation time they’re allotted.
It’s all in the family. Look at your company’s clients to see if there are perks available through them.
Conclusion
To maximize your benefits, you have to know your benefits. So, whether you’re a new hire or a company veteran, take the time to study your employer’s benefits portal. Or talk to a human resource specialist. Chances are they’ll be eager to help you get the most from the benefits package that they’ve so thoughtfully put together for you.
This article was first published in September, 2106. It has been updated.
1 Department of Labor, “Employer Costs for Employee Compensation,” June 16, 2022.
2 Society for Human Resource Management, “2022 Employee Benefits,” June 2022.
4 Employee Benefit Research Institute, “Notes,” June 2010.
5 Employee Benefit Research Institute, “HAS Balances, Contributions, Distributions, and Other Vital Statistics,” June 2014.
6 Society for Human Resource Management, “2018 Employee Benefits,” June 2018.
7 Social Security Administration, Fact Sheet, Disability.
8 GlobalWorkplaceAnalytics.com, “Latest Telecommuting Statistics,” January 2016.
Provided by Commonwealth Financial Group, courtesy of Massachusetts Mutual Life Insurance Company (MassMutual). ©2022 Massachusetts Mutual Life Insurance Company, Springfield, MA 01111-0001 CRN202508-302632