How to Evaluate Employer Benefits Packages (Part 7): All the Extras
In the previous posts we discussed the “Big Five” components of the typical employer’s benefits package. Most employers also have other benefits that supplement those cornerstone benefits. In this post we explore some of the extra benefits that aren’t as high profile as the Medical, Retirement and Time Off benefits.
Other Benefits
Employers offer additional benefits, and it is worth exploring these options when evaluating employment and benefit enrollment decisions. These other benefits consist of coverage like Dental, Vision, Critical Illness and Hospital Indemnity plans. In addition, employers may have college savings plans and employee discount programs. They may also include “newer” benefits like Student Loan Repayment Assistance and Parental Leave.
Today’s workforce has four distinct demographic generations of workers, all with their own unique perspective and values that they bring to their career and employer relationship. They also have different life-stage needs. Many employers regularly evaluate their benefit package to determine how best to meet the needs of this diverse workforce, and to attract and retain talented employees in all generations.
Additional Benefits
Most employers will offer Dental and Vision benefits. These plans are not as complicated as Medical, so many employer plans will look similar. Employees receive value from the employer’s ability to negotiate group rates which makes these plans less expensive than if you were to purchase an individual policy.
It is probably inappropriate to call these benefits “insurance” since they don’t protect you from catastrophic loss. It is much more difficult to reach a catastrophic level of claims with Dental and Vision, so these plans basically provide a very low deductible and then provide additional discounts on other services up to an annual limit. Once you hit the cap, you receive no further benefit until the next year. Nevertheless, these plans facilitate provider discounts and can help offset your personal costs when receiving these services.
Employer Provided Benefits
An often overlooked and underutilized benefit is what commonly falls under the heading of the Employee Assistance Plan or EAP. These plans provide a limited number of free visits with a professional counselor that can help the employee or their family member through a difficult time such as a death of a loved one, divorce, or stressful work/home issues where it can be helpful to speak with a professional counselor.
The new “version 2.0” EAP programs include counseling services but also provide other helpful services. Many of them will include financial and legal support, providing advice, referrals and education on those topics as well as many others. Some provide concierge-like services to help employees manage their busy lives.
Many employers also provide an Employee Discount program. This program provides discounts and preferred rates for any number of services that employees might need. Available services typically include gym memberships, restaurants, entertainment, travel, cell phones and service plans, electronics and other merchandise.
Voluntary Benefits
Employers frequently make available an assortment of benefits that provide group rates for employees that are interested in additional financial protection. These benefits are typically provided at reduced group rates, but are usually not subsidized by the employer. These can include Accident, Critical Illness and Hospitalization plans. These plans provide enrolled employees with a cash benefit if they have an accident, hospitalization, or acquire any of several specific diseases or illnesses (like Cancer).
Although your health plan will provide benefits and ultimately provide protection against catastrophic medical costs, these plans provide an additional level of financial benefit paid directly to the employee. If you don’t think you will use the benefit you don’t have to enroll, but if your life situation changes down the road, you can enroll in a plan and provide yourself with some additional protection (just watch for any pre-existing condition limits or waiting periods). These plans can also paired with other benefits. For example, an employee enrolled in a high deductible health plan, may choose to enroll in a voluntary Hospitalization plan. That way if there is a hospitalization event the employee receives a cash payment benefit that can help them offset the costs of their deductible.
There is a growing trend of adding more voluntary benefit plans to the employer benefits menu. Employers carefully balance employee interest with the administrative costs associated with adding the benefit. I predict continued growth in this area as employers look for Voluntary Benefits to help meet the various needs of their diverse workforce.
Benefit Impacts on Your Employment Decision
In the introduction I mentioned that most employers have similar benefits, and that is true. People who manage employer benefits spend time benchmarking their benefits package to make sure it is competitive and will help their company attract and retain talented and dedicated employees. But that process also means that most employers are continuously tweaking benefit plans to make them attractive as well as cost effective.
You should be aware that Plan design and your contribution rates are subject to change. In fact, due to the increasing cost of medical coverage you should anticipate that your health plan design (your out-of-pocket portion, and the pay period premium deduction) will likely change (increase) each year. So don’t make long-term decisions based on the financial impact of today’s benefit contributions. Note that other benefits are also subject to change but tend to experience increases and design changes much less frequently that medical benefits.
While benefits are important, and I certainly hope my peers working with Employee Benefits are providing compelling benefit packages, they are just some of the factors you should consider when making an employment decision. Some considering job offers may neglect the benefits package to their detriment. Others may place too much emphasis on benefits versus other factors.
Your comfort level with the organization's culture and mission and opportunity to grow and develop are likely to have a stronger impact on your long-term job satisfaction than the benefits package. To put it bluntly, it won’t matter how much time off and retirement contribution you receive if your supervisor is a "jerk" and your work unit is a "dumpster fire".
You should evaluate your benefits package as a part of the overall picture when making an employment decision.
Watch for more articles
This article ends the series on evaluating an Employer's Benefit Package but please check out other articles that provider deeper dives into specific benefits.
Written by Brian Mitchell
Brian Mitchell has experience leading Total Rewards strategy and implementation for large employers. He enjoyed helping his own millennial children navigate first-time employment and benefit selections. He hopes his insights simplify the process for you as well.
Benefit Boosts by Brian Mitchell© – Vol 2024-008
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