When I was a little kid, day care was known as grandma’s house. When I got a little older, before and after school care was at one of my sets of grandparents’ houses as well. That’s where my sister and my cousins and I would go after school to get a snack and play until our parents got off of work and were able to pick us up (I don’t seem to remember too much homework getting done there). I’m pretty sure I’ve never spent a day of my life in a day care facility or preschool or before/after school care (besides at grandma’s, of course). Unfortunately, this isn’t an option for most people and preschool, day care, and before school and after school care are all expensive. Really expensive. If you pay for dependent care so that you can go to work and earn an income, then there may be an option offered to you through your employee benefits to lessen the sting of paying for those expenses. Although I wrote about the Dependent Care Flexible Spending Account (FSA) earlier this year, I’m going to freshen it up for this employee benefits series to keep it top of mind.
Employee Benefits
Guide to Employee Benefits Open Enrollment 2019 Part 4: Disability Insurance
Running your household takes a lot of money. From your mortgage to your car payment to your groceries, it all adds up. And we haven’t even mentioned the other expenses you have to maintain your lifestyle like daycare or eating out or entertainment. Now imagine trying to pay for those things without an income and with no ability to earn. How long would your savings last? What would happen once you spend all that money?
Guide to Employee Benefits Open Enrollment 2019 Part 3: Group Term Life Insurance
Group term life insurance is a very common employee benefit that many people take advantage of. However, not many people think beyond the scope of the coverage offered through their employee benefits to consider why they need the coverage, how long they’ll need it, and if the maximum amount they can get is enough. If there are people who depend on your income and would be financially devastated if something were to happen to you, then this is a benefit that you should be taking more seriously.
Guide to Employee Benefits Open Enrollment 2019 Part 2: Health Insurance
When making employee benefits elections during open enrollment, choosing which health insurance option you’re going to go with over the next year seems to be something that almost everyone guesses at. Some people opt to choose the plan with the lowest deductible, some choose the option with the lowest premiums, and some choose whatever is in the middle. The problem with choosing your health insurance plan this way is that no real thought around how your and/or your family’s health situation is taken into consideration. With just a little education, I’m sure we can all figure out which plan might be most appropriate for our own personal situations.
Guide to Employee Benefits Open Enrollment 2019 Part 1: Employer-Sponsored Retirement Plans
This is part 1 of a series where I’ll be providing general education on many of the employee benefits elections that you’ll be faced with during open enrollment season. While there are some employers whose employee benefits open enrollment has already closed, many companies don’t have open enrollment until October or November. I find that many people take their best guess at making their enrollment elections, but have never really been well-educated on the decisions that they have in front of them or what might be best for their personal situation and don’t necessarily understand everything that they’re opting into or out of. Something that can make this even more confusing is having a spouse who’s employed at a company that provides benefits and trying to figure out how each employer’s benefits can work together for you. I’m hoping that this series of posts can help provide some education around some of the common benefits offered by employers and help people make better decisions for what might be best for their personal situation.
The Most Useful Employee Benefits That You’re Not Taking Advantage Of
3 minute read
Of course, not all of these benefits are available to everyone and I haven’t included things such as life insurance because almost everyone signs up for it. Below, I’ve listed benefits that I often see people not taking advantage of when they really should be.
High Deductible Health Plan (HDHP) Paired with a Health Savings Account (HSA)
Although HDHPs may seem scary on the surface, they can provide great benefits to those who are healthy, especially when combined with an HSA. Not only can HDHPs save you money through lower premiums if you don’t visit the doctor often, but many HDHPs that are offered as an employee benefit are HSA-eligible.
HSAs are currently the most tax-advantaged accounts out there. They can be used as a means to save for and pay for any qualified medical expenses in a tax-free manner or you can strategize to use them as the only tax-free savings vehicle available to you. Additionally, if an HSA is available to you, then your employer likely offers to contribute to it on your behalf which ultimately lowers the cost of heath care for you even further.
Pre-Tax Dependent Care Benefits Through Dependent Care Flexible Spending Account (FSA)
If you’re paying for dependent care, then this is a no-brainer. You’re already paying for daycare, it’s really expensive, and you’re paying for it with after-tax dollars. If your employer offers a dependent care FSA, then you can contribute up to $5,000 to the account pre-tax for those married and filing jointly, or $2,500 for single taxpayers and those married filing separately, and then reimburse yourself tax-free.
If you are a married filing jointly taxpayer in the 24% tax bracket and you contribute $5,000 to a dependent care FSA, then you could save $1,200 on your taxes. There’s no reason not to take advantage of this if it’s available to you.
Long-Term Disability Insurance
According to the Social Security Administration, 1 in 4 of today’s 20-year-olds will become disabled before they retire. Many people don’t have disability insurance in place simply because they don’t know what it is, or they think they’ll never need it, but it could be disastrous if you end up needing it and you don’t have coverage in place. If you become disabled due to a freak accident, a disease, or mental health condition and can’t work, then how will you earn money, put food on the table, or provide for your family until you reach Social Security age? This is exactly what disability insurance protects against.
Not all disability insurance policies are written the same, and the devil is in the details when it comes to the policies, so it’s worth exploring private policies as well.
Vacation
As a whole, American companies offer fewer vacation days than many other nations. Yet, Americans still leave many of these days on the table. In fact, over half of Americans report having unused vacation days left over at the end of the year. Why? Even if you’re not going on vacation take that time to spend time with your family, enjoy your hobbies, or just relax.
The way I see it is that if your boss values you less for taking all of your vacation days than someone who doesn’t take all of their days, then you need to find a new boss.
Be a little more intentional when making your employee benefits elections. If there’s no one there to help you and answer your questions, then reach out to someone you trust who has knowledge about the benefits being offered to you and can accurately answer your questions.
