How to maximize your employer benefits package

This article will ... Go over what you should check in typical benefit offerings. List the benefits being introduced by many companies, especially in the wake of the recent pandemic. Highlight what some companies allow with extra vacation days.

Want to increase your income today — without the hassle of renegotiating your salary with your employer? One possible way is knowing how to get the most out of your workplace benefits.

The U.S. Department of Labor estimates that your employer-sponsored benefits are worth roughly 30 percent of your salary.¹ And many of us aren’t taking advantage of everything our employers put on the table — we may not even know all that’s available.

Why employee benefits matter

Indeed, roughly one in four employees report to being confused about their benefit packages, according to a study from the Plan Sponsor Council of America.

That’s essentially money they — and most of us — may be leaving behind.

Even if you think you’re maxing out your benefits, you owe it to yourself to look at your employer’s most recent benefits package. Indeed, owing to the pandemic, many companies now offer benefits packages to allow more flexible work arrangements, according to the Society for Human Resource Management.²

Start with the basics: Core Employee benefits

First of all, whether you are a new hire or veteran, it’s a good idea to check on your basic benefit package to make sure you are taking advantage of all that may be offered.

For many, but not all, employers this includes:

• Long-term disability income insurance: 1 in 4 people in their 20s working today will become disabled before retirement age, according to the Social Security Administration. If your employer offers it, consider it. If not, you many want to consider getting it on your own. (Calculator: How would a disability affect my finances?)

Indeed, many people feel confident with the group disability plan provided by their employer — until a claim becomes necessary. Then, the limitations can become strikingly clear. (Learn more: The reality of workplace disability income insurance)

• Life insurance: Group policies offered through an employer can offer attractive rate, although there may be limitations on the amount of coverage. Also, some employer policies are portable, meaning if you leave the job, you can take the insurance with you. But this isn’t the case for all employer-offered policies. You should check what your employer’s group policy offers against your own life insurance needs. (Calculator: How much life insurance do I need?)

Certainly, the cost of employer-provided insurance will likely be lower since the policy covers the group as a whole, rather than individuals. But keep in mind that being part of a group means you lose some individual choice as well as some of the features various types of individual life insurance can offer. (Related: Is life insurance through work enough coverage?)

• Retirement plans and 401(k) matching: Some employers will match contributions to various savings programs, particularly 401(k) plans, up to a certain percentage. This is essentially “free money” that goes straight into your savings. Make sure you are taking advantage of it. It’s also a good idea to check what those savings are being invested in and whether it meets your risk profile.
• Health insurance deductibles: If you meet your deductible for a calendar year, try to get as much needed medical care before the deductible resets at the beginning of the next year.
• Flexible work arrangements: Many employers now offer flexible working hours and telecommuting arrangements. Investigate what’s available. (Related: Important employee benefits in a hybrid workplace)

Beyond these benefits, there may be others to investigate. These include:

Hidden gems in your benefits package

1. Health Savings Account (HSA). If your employer offers a Health Savings Account (HSA), check it out. There’s a triple tax benefit: money goes into your account tax-free; it grows tax-free and when you need to spend it on qualified health expenses, there are no taxes due. While an HSA can’t replace a traditional retirement plan, it can bolster retirement savings if pre-retirement medical expenses do not exhaust the account. Left to grow for decades when you’re younger and presumably healthier, you could have money to devote to medical expenses later in life. (More: HSA basics)

A Flexible Spending Account may also be available. This also allows you to set aside pretax income for medical expenses. But such accounts often come with more restrictions and timing requirements. Still, depending on your health situation and recordkeeping habits, such an account could be beneficial. (Learn more: Differences between FSAs and HSAs explained)

2. Employee Stock Purchase Program (ESPP). This type of program allows employees, usually after some sort of vesting period, buy stock in the company. Employees can use this benefit as a saving vehicle with an automatic upside, since many employers provide a discount on the stock. Indeed, some ESPPs have a “look back” provision that reduces risk and offers the possibility of a better return since the purchase price is based on the stock price either at the beginning of the offering period or the end, whichever is lower. Of course, there’s no guarantee the stock’s value will rise, but you’re buying it for less than the current market value. (Learn more: Taking advantage of your employee stock program: 4 tips)

3. Telemedicine services. Being able to take care of health issues without leaving the office can also add up to savings. Some employers offer access to services that provide non-emergency healthcare via video and smartphone app, allowing employees to get medical consultations, diagnoses, and prescriptions without setting foot in a doctor’s office or urgent care center.

Even if you prefer to see your doctor in person, consider telemedicine for follow up visits to save yourself time waiting at the doctor’s office and a second co-pay.

4. Tuition reimbursement. Getting reimbursed for a degree program is a great perk for employees, with 40 percent of organizations offering educational benefits, according to SHRM.² And some employers offer repayment for dependents’ college education. For some workers that benefit is a major attraction of their current job.

Take, for example, Stephanie Weirsman, who works for a major East Coast university. She describes the entire benefits package at her place of work as “very desirable” but concedes that the best part is the $15,700 per year of tuition reimbursement for any accredited college or university for employees’ children. She said in an interview that she’s looking forward to using it when her daughter attends college down the road.

5. Employee discounts. Many employers offer perk programs, with discounts on everything from event tickets to travel to car purchases.

At a basic level, these programs typically consist of passing along discounts to employees from local, regional, or national merchants through the company’s intranet or email. Or the program is handled by a vendor that oversees an online portal that employees can use to make purchases from a variety of retailers and service providers. The vendor collects fees from the merchants on its portal based on sales and with no administrative expense for the employer.

6. Paid time off (PTO). Paid time off is another benefit you shouldn’t throw away. Some employers have expiration or “use-by” dates on vacation time. Check with your employer. Remember, loyalty to a job is admirable, but it is important to take time away from the job to re-set. Also, in some industries, the work pace sometimes ratchets up to the point where employees may use only a portion of the vacation time they’re allotted.

This is something Daniel Gross, a manager of talent operations and recruiting at marketing and technology agency DigitasLBi, has seen firsthand. But he and his team stress the importance of taking time off to recharge. If you simply cannot take time away from your responsibilities, Gross points out a way some employees can get an out-of-office experience while still being on the job.

“Tap into your company’s global network of offices to see if you can work in one temporarily,” he said. With offices around the world, employees can request a temporary assignment in a far-off location. Gross knows of a several co-workers who have worked for various stretches of time in the firm’s Hong Kong, London, and Paris offices.

7. Client perks. Look at your company’s clients to see if there are perks available through them. For instance Gross’ colleagues receive discounts with agency clients Goodyear, Lenovo, and American Express to name a few.

Conclusion

To maximize your benefits, you have to know your benefits. So, whether you’re a new hire or a company veteran, take the time to study your employer’s benefits portal. Or talk to a human resource specialist. Chances are they’ll be eager to help you get the most from the benefits package that they’ve so thoughtfully put together for you.

Learn more from MassMutual…

Can you afford a career change?

Building a life insurance ‘ladder’

Saving in your 20s – Do the math

This article was first published in September 2016. It has been updated.

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