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The Candidate’s Guide to Understanding Employee Benefits

When you’re searching for potential employers and a step up in your career goals, your salary offers aren’t the only thing to be considering. Employee benefits can add to the quality of your life just as much as your direct compensation if you take advantage of them!

Employment benefits are indirect forms of compensation like health insurance or flexible work schedules that employers offer to increase job satisfaction and make your life easier. It can be confusing to know when to ask about benefits in the hiring process or even what you should be looking for in an employee benefits package.

Below we’ve provided an outline of some of the most common perks and benefits that employers offer and how to find the best package for you!

Health Insurance

Health insurance is the most common and sought-after employee benefit but the coverage varies depending on the employer. Most Americans rely heavily on their employer’s health insurance because the health care system is expensive and health insurance in America is predominately employer-sponsored. This means that the health insurance that you can attain through an employee benefits package is likely the most cost-effective insurance you can acquire, so it’s best to take advantage of it!

According to the Society of Human Resource Management (SHRM), 85% percent of employers offer a Preferred Provider Organization plan (PPO), making it the most common form of health coverage in an employee benefits package. 

The second most common is an HDHP (High Deductible Health Plan) that is linked to an HSA (Health Savings Account) or HRA (Health Reimbursement Account), though some employers don’t have HDHPs that are connected to HSAs or HRAs. Healthcare Flexible Spending Accounts (FSAs) are also very common forms of health spending and saving accounts.

Most health insurance plans offered by employers include:

  • Vision Insurance
  • Dental Insurance
  • Prescription Drug Coverage
  • Employee Assistance Programs (EAP)
  • Accidental Death and Dismemberment Insurance (AD&D
  • Long-term Disability Insurance
  • Mental Health Coverage
  • Chiropractic Coverage
  • Contraceptive Coverage

Some of the less common types of health coverage include:

  • Short-term Disability Insurance
  • Cancer Insurance
  • Infertility Treatment Coverage
  • Bariatric Coverage for Weight Loss
  • Gender Reassignment Surgery Coverage

Telemedicine has also been less commonly covered in the past but during the Covid-19 pandemic, it has become increasingly more offered in health care coverage. Life insurance is also a frequently offered benefit for current employees. If you are the head of household this may be an important benefit to look for in your job search. 

Healthcare and prescription medicines can cost you a ton today, so it’s important to properly evaluate your health care coverage needs and whether they will be covered under the offered package. 

Retirement Plans

All of us probably hope to retire someday and move to a sunny paradise in Florida or finally cross all those magical trips off our bucket list. But retirement in America is becoming increasingly more expensive. USA Today reported that the average American will spend $987,000 from retirement age on. This is why retirement plans offered by employers are so important in setting yourself up for the future you dream of in your life after work.

The most common type of retirement employee benefit is a 401(k). This plan allows you to dedicate a portion of your pre-taxed salary to a retirement savings account. Many professionals prefer this plan because their money is automatically added to their retirement savings account with each paycheck instead of having to remember to do it yourself every month.

Some employers offer to match your retirement savings or make contributions. These retirement benefits are the best ones to look out for because those contributions will help you out in the long run. Especially if you hope to retire soon, it would be best to choose a job that matches your savings contributions, and even if you’re far from retirement, these plans are hard to beat.

Student Loan Repayment Plans

Student loan repayment plans are becoming increasingly more common among company employee benefits packages as the student debt crisis grows. CNBC reported that nine out of ten graduates are searching for a job with student loan repayment assistance and about 62% of working adults consider moving to a company that offers these programs.

Though this benefit is extremely sought after, it can still be hard to find. Many companies have plans to implement student loan repayment plans in the future. But until then, if you are lucky enough to find a company with student loan assistance, it is important to pay attention to how the plan is structured.

Most employers with student loan repayment plans are structured to match your payments on your student loans. Some companies match your loan payments by adding to your 401(k) or retirement plan. 

It is important to note that many of these benefit plans cap their match payments at around $10,000. In addition, these contributions by your employer are also considered taxable income. With this in mind, a higher salary may be more beneficial than employer assistance because you will still have to pay taxes on the matched amount at the end of the fiscal year. 

Another aspect to consider is the restrictions that may be applied to these plans. For example, some student loan repayment programs require you to owe a certain amount of money and work full-time to take advantage of the assistance. 

Flexible Work Schedules

Since the Coronavirus pandemic, the way we work and how we work has changed. With many work duties and meetings moved online, flexible work schedules are a benefit that many companies have implemented. 

As the pandemic comes to a close and people get vaccinated, workers may likely return to the office for regular schedules. However, many companies plan to keep the benefit of a flexible schedule because it may increase employee productivity and is linked to a 137% headcount growth.

Paid time off (PTO) is another valuable type of benefit in which you may be paid for the holidays you have off or receive a certain number of days off that will still be paid. Some companies limit the number of PTO days you have and in other companies, you can earn them through the time you spend as an employee.

Other Perks

Many companies offer a diverse package of other perks and employment benefits that align with their company goals or improve employee satisfaction. Some of these perks include a company gym, daycare, employer-covered electronics or gas, and free coffee and snacks.

Some companies offer wellness courses, financial wellness programs, and personalized career development classes. Depending on your career path, these development classes may be super valuable to you in reaching your next goal and corporate culture has begun to put a priority on “upskilling” employees so these classes are increasingly more offered.

The Right Benefits Package for You

As a professional with experience, you will likely get a few offers when shopping for a new company. Most importantly you probably want an upgrade in salary and employee benefits. But before you accept a job offer, you’ll want to make sure that the benefits package is the right one for you.  

Start by deciding which benefits are the most valuable to you. Take some time to note the benefits from your previous job that was the most helpful and what benefits that company lacked. Once you make a list of what you had and what you want, it will be easier to compare and contrast with your new benefit offers.

Secondly, try to rate the aspects or types of employee benefits by most important to you to least important. This will help you narrow down the search for your dream job both in your application process and when it comes to the final step of accepting an offer. 

Most company websites list their employee benefits online, this is helpful for individuals with disabilities or professionals who are trying to pay back student loans. When you have a brief of the types of benefits a company offers, you’ll be more likely to gauge if the job is right for you.

Similarly, if great health care coverage is number one for you, it might be a waste of time to apply for a position that has less coverage than your former job. In your next job you want to be upgrading not stepping backward, so setting up your priorities with a strategic plan will save you so much time and stress in the future. 

Finally, when a benefits package is on the table, read it through fully. If you don’t understand something, do some research and ask questions. Employee benefits can be just as useful to your financial life as your salary, so you want to take advantage of everything that you can!

If you’re ready to take the next steps in your career and find the perfect job for you, we’re here to help! Contact us today to be matched with a recruiter.

For more information on compensation terms or job posting red flags to avoid, check out our other articles.