Once you’ve gotten a job offer from an employer, you’ll need to evaluate their compensation package,
Salary is usually straightforward, but benefits can be trickier. How do you decide whether the insurance plans, income-protection plans and nonmonetary benefits meet your needs.
To learn more, we spoke with Tom Daly, founder of Benefit Administration Group, an employee benefits and HR consultancy in the New Orleans area.
Here’s are three questions he suggests to help make your decision.
Daly says a big trend right now in the benefits industry is bundles of benefits based around employee demographics. “It’s sort of like telling someone the specials in a restaurant,” he says. A young, active single guy may be offered a package with some basic health insurance and then additions like accident insurance and short-term disability. The employer, or a third-party broker, may assume he’s not likely interested in a cancer policy or long-term disability coverage and won’t push those products.
An employee with young children may be offered a bundle with a different health plan, accident insurance and life insurance to be sure her family is cared for in case something happens.
It’s fine if you ultimately choose a bundled plan, but make sure you see all your options first, Daly says. Make sure your prospective employer provides plan information for all your possible health plans; vision, dental and prescription plans; voluntary benefits; and retirement plans.
Also, get details for any nonmonetary benefits such as paid time off and flexible work arrangements.
It’s important to look at deductibles, co-pays and maximum out-of-pocket costs for all potential plans. It’s equally important to consider the premiums, since you’ll want to know exactly how much will be withheld from your paycheck. But these may not be the only costs to consider.
Your employer might be offering what’s called a Minimum Value Plan. These are designed to pay at least 60 percent of the cost of covered services and cannot cost the employee more than 9.5 percent of their salary for employee-only coverage. If your employer has more than 50 employees, it is required to offer this or must pay a fine. If your employer does offer this coverage, it disqualifies you for any kind of subsidy on an exchange, Daly says.
Some people really appreciate flexible work hours that allow them to volunteer at their children’s or grandchildren’s schools. Others may be focused on diligently saving up for retirement and value a healthy 401(k) match. Someone else may depend on a medication every month that, without the prescription plan, would cost as much as his mortgage.
What is your unique situation? Will these benefit offerings work for you in your unique context? Daly says you should evaluate the benefits, determine whether there are any gaps and decide how to fill them. Are you going to need additional coverage outside of work to make up small gaps? Are the gaps so big it would make more sense to find another job? Only you know your situation and whether this benefits package will meet your needs.
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