Have you ever looked through your employee benefits options during open enrollment and chosen to pay for something just because you weren’t really sure what it was, but it sounded important or you thought you might need it since it’s being offered to you? No one wants to pay for what they don’t need, but when it comes to employee benefits offered to us that we’re not sure whether we need them or not it seems like we often “play it safe” and pay for it instead of going without it. This can mean spending money on things that may not provide the benefits we thought they would.
Since we’ve gotten through the main employee benefits elections that you need to think through during open enrollment, I want to lump together some of the other benefits that you may have offered to you. When it comes to some of those options mentioned below I sometimes wonder, “If it weren’t offered to you through your employee benefits would you even know it existed or think it’s important enough to pay for?” However, since many people do have these benefits offered to them, that inherently makes them think that the coverages are important enough that they need to pay for them.
There are more employee benefits that may be available to you than what I’ve written about here, but these are the ones that I often see people paying for.
Dental & Vision
I think that most people understand how dental insurance and vision insurance work, so I’ll spare the details. If you don’t, or you just want to learn more about each of them, then you can read more about dental insurance here and about vision insurance here.
Dental and vision insurance are obviously two completely different coverages, but I have similar feelings on both so I’m writing about them together. Many people elect to pay for these insurances but never consider if they actually should. It’s important to know what you’ll be covered for when paying for insurance and these are a couple of instances where it might not always make sense to pay the premiums.
Both dental and vision insurance can sometimes end up being more expensive than paying for routine care out-of-pocket – most people have never considered this could be a possibility. All you need to do to figure out whether you’d be better off with paying for insurance or paying out-of-pocket is to ask your healthcare providers how much it would cost you if you were to pay out-of-pocket and compare that to your insurance premiums.
However, if you have dental and/or vision insurance offered to you as an employee benefit, then chances are that they’re pretty cheap and paying the premiums might only be an extra couple of hundred dollars out of your pocket that you didn’t have to pay but could provide peace of mind to you in knowing that the insurance is there to help pay in case you have to have a more extensive and expensive procedure.
Obviously, this is all subject to the terms of the individual policies and they may have maximum benefit limits – you’ll want to check and see what the policy actually covers, what the annual maximum of the policy is (how much the insurance company will pay for before you have to pay for bills), and if your doctors are in the network.
Spouse/Domestic Partner Life Insurance
If there’s a need for your spouse or partner to have life insurance coverage to protect you and/or your family, then there are likely better alternatives to getting this coverage through your employee benefits. Spouse/domestic partner life insurance offered through employee benefits can actually be expensive compared to a private policy life insurance policy, if you’re healthy, and typically only provides a very limited amount of coverage. If there’s a need for the person to have life insurance in place and there’s no other way for them to obtain it affordably, then picking up this benefit could be an option but may not provide the amount of insurance needed.
Child Life Insurance
As we’ve learned before, we have life insurance in place to protect our loved ones from financial disaster. Since a child doesn’t earn an income that anyone is dependent on, I have a hard time seeing why most people would ever need to pay for this benefit. There are certain cases where this may be appropriate, but they’re very limited.
Accidental Death & Dismemberment Insurance (AD&D)
Many employers offer AD&D insurance to their employees which, as the name suggests, provides a benefit if the insured were to die or become dismembered in an accident. However, these policies typically are very limited in when they will pay out and only cover things with a high probability of not happening. While an AD&D policy could be appropriate for a certain segment of workers who are at a high risk of being injured, the limited coverage and typically large list of exclusions make these policies that most of us can pass on.
Critical Illness Insurance & Accident Insurance
I’m lumping these two employee benefits together because you’re likely better off spending your money on health insurance and disability insurance than critical illness insurance or accident insurance. Critical illness and accident insurance both typically have very limiting coverages and pay a relatively small lump sum (for example, the IU Health critical illness plan provides a $3,000 lump sum) if something were to happen to you and you qualified to receive a benefit. As with all the other employee benefits that we’ve learned about, it’s important to actually read the particulars of the policy to understand how beneficial you believe it to be to your personal situation.
Legal Coverage
How often in your life have you needed legal coverage? (Hopefully the answer is “rarely”). Most people only use a lawyer a couple of times in their lives and having legal coverage as an employee benefit may not necessarily provide the benefits that you think that it will. Often, legal coverage as an employee benefit provides very limited benefits and may provide a small discount on some services. As with everything else, you need to actually review the policy to understand what benefit you’re really getting out of it and if it truly makes sense to pay for that.
Guide to Employee Benefits Open Enrollment 2019
There are many employee benefits that may be offered to you through your employer – that doesn’t mean that you need to pay for them all or that they’re all appropriate for you. Learning more about each benefit available to you and determining whether it’s actually beneficial to your personal situation as well as their limitations is something that everyone should do during open enrollment, but sadly many don’t. Be smarter with your money and educate yourself about your employee benefits before paying for something that you might not actually need.
This is part 6 of a series where I’m providing general education on many of the employee benefits elections that you’ll be faced with during the 2019 employee benefits open enrollment season. Find the previous posts here:
