Make the Most of My Job Benefits

This sounds ridiculously obvious.

It isn’t.

People can work somewhere for years without understanding all of their benefits.

They filled out paperwork when they were hired.

Clicked some boxes during open enrollment.

Picked something that sounded reasonable.

And went back to work.

Take a look.

What does your employer offer?

What are you enrolled in?

What are you paying for?

What is your employer paying for?

What benefits require you to take action?

What deadlines matter?

If your workplace retirement plan offers an employer match, learn how it works.

The basic idea is that your employer may contribute money based on your own eligible contributions, according to the plan’s rules.

That can be valuable.

But don’t stop at: “My company matches.”

Ask:

How much does the employer contribute?

What do I have to contribute to receive it?

Is there a limit?

When does the employer contribution become fully mine under the plan?

What happens if I leave the company?

That question about when the money becomes fully yours is sometimes called vesting.

Your own contributions to a 401(k) are yours. Depending on the plan, some employer contributions may become fully yours immediately or over time.

Suppose you contribute enough to receive the full employer match.

Excellent.

That doesn’t automatically mean you’re saving enough for your eventual retirement.

The employer match is a benefit formula.

Your retirement need is a life question.

Those aren’t necessarily the same number.

You see money disappearing from the paycheck for health insurance.

But understanding the plan means looking beyond that deduction.

Premium: What you pay for the coverage.

Deductible: What you may need to pay for covered care before the plan begins paying certain costs.

Copayment: A fixed amount you may pay for a covered service.

Coinsurance: A percentage of a covered cost you may be responsible for.

Out-of-pocket maximum: The most you may have to pay for covered in-network care during the plan period before the plan pays all covered costs, subject to the plan’s rules.

Provider network: The doctors, hospitals and other providers that have agreements with the plan.

Prescription coverage: What medications the plan covers and what you may pay for them.

Different plans divide costs differently.

The plan with the lowest paycheck deduction isn’t automatically the least expensive plan for the way you use healthcare.

A plan with a lower premium may have a higher deductible or other costs.

A plan with a higher premium may cover more of certain expenses.

The right fit can depend on your healthcare needs, expected use, preferred providers, prescriptions, family coverage and ability to handle costs when care is needed.

Some employers offer accounts or arrangements that can help employees pay eligible healthcare expenses.

You may hear names like: HSA. FSA. And immediately decide you have somewhere else to be.

But these benefits can have important tax advantages, eligibility requirements, contribution limits, spending rules and differences in what happens to unused money.

A Health Savings Account, or HSA, generally requires you to meet eligibility rules that include coverage under a qualifying high-deductible health plan.

Money remaining in an HSA generally stays in the account from year to year, and the account remains with you if you change employers.

A Health Flexible Spending Arrangement, or health FSA, is generally offered through an employer. Its rules for using or carrying over unused money depend on the employer’s plan and applicable limits.

HSAs and FSAs are not interchangeable. They can have different rules governing:

Vacation. Sick leave. Personal days. Paid holidays.

Those aren’t just days you don’t work.

They’re days when you may still receive income while not working.

That’s a financial benefit.

Know how your leave works.

Does unused time roll over?

Does some of it expire?

Are there limits?

What happens when you leave the employer?

The answers can depend on the employer’s policy, the benefit plan and applicable law.

We’ve talked about protecting your ability to earn.

What happens if illness or injury keeps you from working?

Some employers provide or offer short-term or long-term disability benefits that may replace part of eligible income under certain circumstances.

That doesn’t necessarily mean your entire paycheck will continue.

Coverage amounts, waiting periods, eligibility requirements, exclusions, benefit periods and tax treatment can vary.

People often don’t think about these details until they need the benefit.

Here’s the other side.

Just because your employer offers something doesn’t mean you automatically need every optional benefit.

Extra insurance. Legal plans. Protection programs. Special memberships. Purchase programs. Whatever else appears during enrollment.

Some may be useful. Some may not fit your situation.

Want a certification? Degree? Training? New skill?

Some employers help pay for education or professional development under certain programs.

If you’re already thinking about going back to school, don’t assume you have to pay the entire bill yourself before checking what work may provide.

Find out:

What education or training qualifies?

How much will the employer pay?

Do you pay first and request reimbursement?

Are certain grades required?

Must you remain employed for a particular period?

Would you have to repay anything if you leave?

New job! More money! Let’s gooooo!

Great.

Now compare more than salary.

Suppose Job B pays $5,000 more per year.

But the health coverage costs considerably more.

The retirement match is smaller.

There’s less paid leave.

A benefit you rely on disappears.

That doesn’t automatically make Job B worse. It means compare the whole package.

Every year the email comes: OPEN ENROLLMENT!

And some of us treat it like: “I’ll deal with that later.”

Then later becomes the deadline.

Open enrollment is a chance to look again.

Did your life change? Marriage? Divorce? New child? Different health needs? Different financial priorities?

Did the plan change? Did the cost change? Are your providers still in the network? Are your prescriptions still covered? Are you still paying for something you don’t need?

Benefits can be confusing.

You are not required to understand a 96-page benefits booklet just because somebody emailed you a PDF.

Ask HR. Ask the benefits administrator. Use the plan’s official resources.

Ask what a term means. Ask what something costs. Ask what happens if you don’t enroll. Ask what happens if you leave.

For certain employer retirement and health plans, a document called the Summary Plan Description explains how the plan operates, what it provides and what rights and responsibilities participants have.

Health plans may also provide a Summary of Benefits and Coverage, which summarizes important coverage and cost-sharing information in a standardized format.

Those documents may not make thrilling bedtime reading. They can still answer questions that matter.

For more complicated tax, investment, insurance or legal questions, qualified professional guidance may be appropriate.