7 Ways to Get More From Your Employee Benefits
Sure, cold brew on tap and unlimited snacks in the kitchen are great to have in the office—but the perks that are attracting employees these days are the ones that protect them and their families. A 2021 study on employee benefits trends by insurance company The Hartford, found increased participation in supplemental insurance benefits (such as life and disability insurance) during the most recent enrollment period, many for the first time.
However, the study also found that 37 percent of employees said they don't fully understand the value of benefits enough to justify the cost. While those benefits packets can be dense, they have important information in them that you should go through to have a full understanding of the benefits you're eligible for—and consult your HR representative if you have any questions or need something clarified.
For parents, a supportive work environment can also go a long way in helping you use your benefits to the max. "Without a positive culture that understands parents need to be flexible, have time off, leave at a moment's notice—it is impossible to make the most of out benefits that exist within policy, because they would be frowned upon," says Jenna Carson, mom and founding partner at investing site, MoneyLucid.
Having a thorough understanding of your benefits can help save money on things like child care and medical bills. Here's how to make the most of your benefits, according to experts.
1. Be Strategic About Your Health Coverage
If you're eligible for a medical plan through work, compare each option side by side: the deductions from your paycheck and out-of-pocket threshold; the cost for prescriptions, doctor visits, and emergency care; and the coverage for pregnancy and birth. Follow the same protocol if your partner also has a health-plan option. Find out whether either employer pays you for declining coverage, suggests Stephany Kirkpatrick, CFP, Moms Money Clinic advisor. If someone in your family has a chronic illness, it might be worth enrolling in both plans—with a coordination of benefits, more of your expenses may be covered.
Be sure to check if your company-sponsored medical plan comes with a Healthy Moms program, suggests Cassandra Rose, an employee benefits and DEI consultant. "Most insurance carriers provide a complimentary Healthy Moms program with dedicated resources to support each trimester," says Rose. "By enrolling, expectant moms can gain access to materials on nutrition, exercise, postpartum, breastfeeding, and more," she adds. Rose says some companies might even offer incentives for participating.
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2. Use Those Dental and Vision Benefits
Company-sponsored dental plans are worth the expense for most families. While they tend to have coverage limits, many pay generously for checkups and cleanings. If you're anticipating major expenses—crowns, root canal, braces—and both you and your partner have a dental plan, it might make sense to double up on coverage, says Ellie Kay, author of Living Rich for Less.
If you have a newborn, you might want to skip enrolling them in dental benefits—after all, they don't have any teeth yet! "Wait until the next employee benefits open enrollment period to enroll them onto the benefit and redirect the savings in dental premiums to your FSA or HSA," advises Rose.
Vision plans are less clear-cut. You and your kids may already get your eyes checked as part of your annual wellness visit. If just one family member needs specs, consider signing them up so they can qualify for new glasses or contacts each year.
3. Set Up Flexible Spending Accounts
Many companies offer a flexible spending account (FSA) that lets you contribute up to $2,850 pre-tax to pay for out-of-pocket medical expenses and a separate FSA of up to $5,000 toward eligible child care expenses—including after-school care and summer camp. New parents are eligible for a special enrollment period where they can enroll for the first time, or increase their contribution amount. "Healthcare FSA funds are front loaded so you can use up to the full elected amount before you've made all the contributions," explains Rose.
Make sure to use your FSA dollars before the end of the year, or you will lose the money. Luckily, there are many ways to use your FSA contributions. "These pre-tax funds can be used for co-pays, medications, and certain qualifying everyday items such as band-aids, diaper rash treatments, and thermometers," says Rose. You can even spend your FSA money on breast pumps.
4. Or Open an HSA
If you have a high-deductible medical plan, a health savings account (HSA) is an even better bet than an FSA: You can contribute up to $3,650 ($7,300 for family coverage) pre-tax per year—some employers even kick in bucks for you. What you don't use rolls over and can be invested for future medical expenses. "HSAs work a little like retirement plans, since your savings grow tax-deferred," says Kirkpatrick.
5. Crank Up Your 401(K)
If your employer offers a retirement savings plan, take advantage. And if your company matches some of your investment, contribute enough to get this "free money" (and more if you can swing it). A growing number of companies also offer a Roth 401(k)—a hybrid between a traditional 401(k) and a Roth IRA. You won't get a tax break up front, but the money can be withdrawn tax-free once you retire.
6. Understand Your Disability Plan
Many employers provide short-term disability, which usually covers 50 to 60 percent of your salary lost due to injury or illness (including pregnancy and childbirth) for up to 26 weeks. You may also be able to buy long-term disability coverage at a discount. This "just in case" insurance pays up to 70 percent of your salary if you're physically unable to return to work. However, it might be smarter to buy your own long-term policy, since you can take it with you when you switch jobs, points out Farnoosh Torabi, host of So Money podcast.
7. Take the (Free) Insurance
Lots of companies offer a nominal life policy (such as one or two times your annual salary) for no charge. Be sure to opt-in. However, take a pass on supplemental life coverage. You'll do better buying an individual life policy, and it won't expire when you change jobs, advises Torabi. The one exception: If you have health issues that might make obtaining life insurance on your own prohibitively expensive, buy what you can at the company's group rate.