Understanding your work benefits program

This is an area that many of us may not think about too much.  In fact, benefits aren’t considered nearly as much by most people as salary when choosing new employment.  But benefits are usually valuable and often misunderstood.  In fact, according to a study done by LIMRA in 2011, only 15 percent of employees were able to give a reasonable estimate of the cost of their health insurance.

There are many things to consider when thinking about benefits.  Different companies offer different means of incentive to employees.  Pensions were historically a way to reward employees for years of hard work, but they’re going the way of the dodo bird.  Today, only 24% of Fortune 500 companies offer a pension.  Does your company?  If so, you’ll want to know how it works (i.e. vesting schedules, payout calculations, etc.) and how it will affect your retirement.  Does your company offer other things, like a 401(k)?  If so, do they have elective and non-elective contributions?  It’s vital that you know those numbers and match to at least those amounts–it’s free money, after all!

What’s your company’s vacation policy and what time of year does it add more vacation days for workers?  Do they cap the maximum days that employees can have?  If so, are you in any danger of losing your excess vacation days?  Does your company allow you to trade excess days in for monetary compensation?  What about paid sick days and holidays?

What about other things, like dependent care benefits?  Or Health Care Flexible Spending Accounts?  And if you have a spouse, how do their benefits complement yours?

I hope you see my point that there are a lot of things that you may or may not know.  Or there are things that you think you know, but may not fully understand.  For example, my wife is a teacher and I probably don’t understand her PERA program like I should.  But these are our benefits.  These are going to have an effect on us in one way or the other for the rest of our lives, so it’s important to understand them.

If you are your company’s benefits expert, good for you.  If you’re not, seek that person out and make sure that you fully understand (and are taking full advantage of) your benefits.  Another thing to ask your benefits expert is exactly how much your benefits are worth!  This is good to know and to consider if you’re thinking about making a job change.  Benefits may not show up on the stat-line, like your paycheck amount, but they ultimately do translate into money in your pocket.  Don’t take them lightly, and know how your personal benefits work (or should work) for you.