Last November, thanks to a not so gentle nudge from a round of layoffs, I left the world of full-time employment to start my own business.
As much as I love building something that is all my own, there is one thing from my old job that I miss dearly. No, it isn’t the paycheck (although that would come in handy now that the severance has run out). It is the employee benefits package.
My former employer offered its employees a veritable treasure trove of perks, amounting to thousands of dollars in compensation above our salaries. It wasn’t until I was transitioning out of the company that I really dove into everything that was available.
Every year American workers leave thousands of dollars on the table in the form of company benefits. According to the U.S. Department of Labor, on average combined benefits are worth 30% of total compensation.
To ensure that you are getting the absolute most value from your labor, here are thirteen benefits you should take advantage of if your employer offers them.
1) Health Insurance
Due to the Affordable Care Act, any employer with over 50 full-time employees (30 or more hours per week) is mandated to provide healthcare coverage.
Healthcare is an expensive good and the cost is only rising. Using group buying power, companies are able to negotiate substantial discounts on health insurance plans. They also subsidize the cost of premiums. The Labor Department estimates that health insurance benefits are worth more than $4,000 annually per covered employee.
Even if you are 100% healthy it is a good idea to enroll in your employer’s health insurance. Having coverage can shield you from bearing the full financial burden of unexpected medical expenses due to an accident or sudden illness. It also covers the preventative care that helps you remain healthy.
2) Dental and Vision Insurance
Many healthcare insurance plans have coverage that is separate from dental and vision care. Thankfully, many employers offer additional insurance.
Most dental plans cover at least two professional cleanings and exams every year. Research shows that over 90% of systemic diseases have oral manifestations. Through regular checkups you dentist may be the first to see signs of diabetes, heart disease, kidney disease, and more.
In most states a dental exam will cost at least $50. However, with additional care like cleaning, x-rays, and fluoride treatment that cost can leap to over $300. Procedures like fillings and orthodontics can be thousands of dollars.
Many employer plan dental premiums are under $20 per month. That is well worth it when that toothache requires a root canal to fix or years of not wearing your retainer leads to needing braces as an adult.
Vision plans are also relatively inexpensive through employer plans and usually cover at least one eye exam and pair of glasses or set of contact lenses every year. Some employer plans even cover Lasik eye surgery.
3) Healthcare Savings Accounts/Flexible Spending Accounts
Insurance is definitely helpful when it comes to paying for healthcare expenses, but it does not cover everything. Out of pocket medical, dental, and vision expenses can easily cost a couple thousand dollars every year.
To help employees prepare for these costs many employers offer access to Healthcare Savings Accounts (HSA) and/or Flexible Spending Accounts (FSA). These savings vehicles allow employees to set aside pre-tax money for medical expenses every year.
While this benefit may not initially appear to be worth more money, it is important to remember that reducing taxable income via pre-tax deductions can equal big savings with the IRS. For 2018 the maximum contribution you can make to an HSA is $3,450 for a single coverage plan and $6,900 for a family plan. The max contribution to an FSA is $2,650.
On top of the tax savings, some employers even match employee contributions to an HSA or FSA. Take advantage of free money by enrolling in your company’s healthcare plan and accompanying savings accounts during the next open enrollment period.
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4) Paid Vacation and Sick Leave
There are some jobs that make it difficult to leave the workplace. However, if your employer offers paid vacation and sick days it is worth it to take advantage of the time. According to Project Time Off, a coalition of organizations dedicated to changing the thinking and behavior of Americans about vacation time, U.S. companies recorded roughly $224 billion in unused vacation time.
No matter how busy your profession is, research shows that time away from is good for employee performance. Taking a break prevents burnout, strengthens team bonds, and improves employee morale.
If you are sure your employer cannot survive without you for a week, consider taking your vacation days in smaller increments of two to three days at a time. It is also unnecessary to leave travel far from home in order to have holiday from work. Simply stay home, unplug from e-mail and phone calls and treat yourself to some much needed rest and relaxation. You are getting paid for it.
5) 401K Match
The days of working for thirty years then retiring with a hefty pension are reaching an end. More and more employers have shifted the responsibility of retirement saving onto their workers.
However, many employers give their employees’ retirement accounts a boost with matching contributions. It is very common for a company to match employee contributions at $.50 on the dollar up to 5 or 6% of salary.
Independent financial advisory firm Financial Engines found that one in four employees miss out on matching contributions to the tune of $24 billion dollars American workers leave on the table each year.
Although millennials often find it difficult to find the money to save for retirement now, it is important to start as soon as possible to not only take advantage of tax savings and compounding interest, but also to collect free money. Finding ways to increase current contributions by even 1% today can be instrumental in reaching retirement goals.
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6) Employee Stock Purchase Plan (ESPP)
Do you work for a publicly traded company? Many offer an employee stock purchase plan which allows employees to buy shares at a discount (usually 10-15% depending on the program). Employees can designate post tax dollars be deducted from their payroll checks to purchase this discounted stock.
For example, as an employee you can designate an amount or percentage from your check every pay period. If your company’s stock is trading at $50 a share the ESPP lets you use the post tax money saved to buy it for $45 (assuming a 10% discount). When that stock value rises to $55 per share you’ve made $10 per share while everyone who had to pay market price only made $5.
This is a great way to start investing because not only do you know the company’s potential to do well, you have an added vested interest and role in its performance.
7) Comp Time
For those who work more than 40 hours per week some employers offer their workers comp time. Comp time is sometimes provided to salaried employees who do not qualify for overtime.
To give people some form of reward for working long hours, employers offer comp time in the form of additional payment and/or additional vacation time. If you find yourself at the office early and staying late, this could be a great benefit to use to either boost your paycheck or get the extra time off you need to take that bike tour across South America.
8) Education and Training
Another benefit to be on the lookout for is tuition reimbursement and education assistance. Many times you do not need to be a student in a degree program to take advantage of this benefit. Often employers also cover the cost of certifications, trainings, workshops, and more. When I was taking standardized tests for grad school admission my employer paid for both an eight week test prep course and my exam.
Be sure to understand any commitments required to use these benefits. Sometimes employers require employees to remain on staff for a specified period of time after the education is complete and paid for.
9) Professional Services
Workers have lives outside of work. People buy homes, enter into contracts, start families and more. Many employers understand this and offer free or discounted professional services like real estate agents, attorneys, childcare, and adoption assistance.
These benefits can be extremely lucrative, saving employees tens of thousands of dollars during already expensive life events. Check your benefits to see if there is a group legal, real estate, or accounting plan. It may require a small monthly premium in order to opt in for services, but many who have used the services attest that it is well worth it.
10) Life Insurance
Most millennials do not spend much time thinking about their own mortality. Thankfully, many large employers cover their workforce with life insurance. There is often no premium to pay and some companies do not even require employees to opt-in for coverage.
Death benefits can be as high as two times base salary. While this is often not enough coverage for someone with a family, it can be plenty for a single person without dependents. It is important to note that this coverage is often not portable and is only in effect as long as an employee stays with the company.
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11) Discounted products and services
Before you sign up for another cell phone service, gym membership, or buy tickets to the newest feature film or amusement park, check your company benefits first. A lot of companies offer perks like employee discounts for fitness clubs, cell phone providers, movie tickets, amusement parks and more.
Receiving these discounts is often as simple as giving your employer’s name when signing up. Others are available through special websites and company contracted ticketing agencies. This can add up to big savings over time, especially if you use a lot of products and services for communication and entertainment.
12) Free Stuff
When thinking about their compensation, many employees forget to include employer freebies. It is common for companies to offer their workforce perks like free parking, meals, gym facilities, banking, and more.
Technology companies are notorious for their free cafeterias serving up breakfast, lunch, dinner, and snacks. One well known company even gives employees free professional massage services every quarter.
13) Transportation
Unless you work from home, commuting to work is a necessary cost. Thankfully many employers help subsidize this expense in different ways.
Some partner with companies like Wage Works to allow employees to purchase public transportation passes with pre-tax dollars. Others offer reimbursement for mileage if a certain amount of travel is required for the job.
It is very common for sales jobs to come with either a company car benefit (complete with gas and maintenance coverage) or a transportation allowance. Some of these benefits are taxed as income so be sure to keep track of how much you’re driving and for what purposes (i.e. business or personal).
Dive In
This list isn’t exhaustive. Companies are always finding new ways to compensate employees for their hard work outside of standard promotions and salary increases. Stay up to date on what’s available to you by visiting your company’s benefits website at least quarterly.
It would also be a good idea to attend HR’s next briefing on company benefits. Who knows? They may even serve free lunch.
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What benefits does your employer offer? Are you using all of them? How have your employee benefits added value to your life?
giulia says
interesting point of view, thanks for sharing!!!