Hourly Wage or Salary. Your wage refers to the amount of money you earn for doing your job. Employers may also include bonuses or commissions as part of your compensation plan, depending on your position.
Retirement Plan. A retirement plan is a significant benefit to look for when considering an employer. Not all retirement plans are structured the same way, so be sure to have a full understanding of yours. Most will match a portion of an employee’s contributions, typically between 4% to 6%. If your employer offers a match, be sure to opt-in if your circumstances allow – it’s free money!
Health insurance. Health insurance is the most important benefit for employees to understand because its costs and benefits can vary so widely. While it’s illegal for an employer to discriminate against specific classes of employees, they can decide how much of the premium to cover. As you compare costs and benefits, don’t focus solely on the bottom line price. Depending on your circumstances, it may be worth paying for more comprehensive coverage.
Paid Time Off (PTO). For salaried employees, employers often offer paid holidays, vacation days, sick days, personal days, and bereavement or funereal leave at no cost, typically at no cost. Be sure to understand how PTO accrues and if and when it expires.
Disability Insurance. Disability insurance replaces a portion of your income if you experience a qualifying event. Be sure to check what the insurance policy defines as a “qualifying event,” as well as the income replacement rate and how the contract defines “income.” There are two types of disability insurance: short- and long-term. Short-term disability may replace lost income over the first 90 days; long-term disability can potentially replace income for the rest of your life. Critically, most employer-paid disability insurance isn’t portable, meaning that the coverage ends if you leave your job.
Dental and Vision. Depending on your circumstances, it may worth opting-in for these benefits when your coverage renews each year. Dental coverage may help offset the cost of braces, implants, or even surgery. Vision coverage may offset the cost of glasses and may cover you for optometrist visits. Most employers offer these benefits at no charge or a reduced rate, so it’s often very inexpensive to opt-in!
Life Insurance, Major Medical, and AD & D. Many employers offer insurance to cover significant events like death, major medical expenses, and accidents. Major Medical and AD & D differ from disability insurance. Disability insurance tends to have a broader definition of what constitutes a qualifying event. On the other hand, these three coverages have a very narrow definition under which they will pay a claim. And, like most employee benefits, these three coverages often are rarely portable.
It’s critical to understand your comprehensive employee benefits plan and how those benefits can impact your take-home pay. If you or a family member have questions about your employee benefits coverage, please contact our office for help.
