Looking over your employee benefits isn’t fun and can be a bit confusing. You need to know how to get the most out of your employee benefits so that you can save the most money now and in the future.
Just by spending an hour or two going over your health and retirement options can save you thousands of dollars every year.
You should evaluate your benefits every year during open enrollment to see if features have changed and if the plans still work for your family.
I put together a list of things to look for to help you get the most out of your employee benefits.
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How do I get the Most out of my Benefits?
Let’s start with health coverage. When it comes to picking a work medical plan, compare the costs of each plan side by side. Compare:
- cost of deductible
- cost of premiums
- copays and prescription costs
- out of pocket threshold
- cost of emergency care and pregnancy/birth
Compare the costs of your spouses employee health benefits as well. It may be more cost effective for you both to be on one plan versus separate. Especially if your employer pays your for declining coverage.
Dental and Vision Plans
Most dental plans are worth the money for most families. They will cover cleanings and checkups while also covering a percentage of more expensive procedures.
Vision plans are where things can get optional. If a member of your family needs contacts or glasses, vision plans are worth the cost. If everyone has good vision and gets their eyes checked during their yearly wellness exam, you may can skip this for a couple of years.
Flexible Spending Accounts
Many companies let you contribute up to $2,550 of your pre-tax income to pay for out of pocket medical expenses.
Some companies even offer FSA for child care costs. You can contribute up to $5,000. This can cover daycare, summer camp, and after school care.
If you max out on both FSA plans, you could save up to $2,000 a year in tax savings.
Health Savings Account
With an HSA you can contribute up to $6,650 pre-tax each year. If you can contribute to a HSA and have a healthy family, you may be able to go with a higher deductible health plan and lower your premiums.
You can use the money in the HSA to cover the cost of the deductible.
What you don’t use, can be rolled over to the next year and invested for future medical expenses. If your company offers both an FSA and an HSA, I would say to go with the HSA since the money continues to grow.
How to Get the Most our of your Employee Benefits: Retirement
Let’s talk retirement. You know that you should sign up for the company’s 401(K).
Make sure you are contributing the maximum amount if your company matches your contributions. That is doubling your money!
Some companies even offer a Roth 401(K). It’s a mix of a Roth IRA and a 401 (K). The money that is put in the Roth IRA can be withdrawn tax-free once you retire. It’s just another good way to diversify your retirement.
Most companies provide a short term disability insurance that covers up to 26 weeks if you have an illness or injury. This includes maternity leave. It usually covers 60% of your salary.
Instead of buying the company’s long term insurance if you are unable to return to work, it may be better to buy one on your own. You will be able to take the policy with you if you were to ever change jobs.
If your employer offers a free nominal life insurance policy, make sure to sign up for it. It will usually cover 1 or two times your salary.
If you want to buy a full life insurance policy it may be better to purchase an individual life policy . It won’t expire and you can take it with you when you change jobs.
The only exception to that is if you have a health issue that may make buying life insurance difficult or expensive, then you may want to by what you can from the company’s group rate.
By having a bit more understanding about what benefits you can get you should be able to the the most out of your employee benefits every single year.