5/28/2017

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Choosing The Right Benefits Package

It could mean the difference between long term stability or financial instability.

No matter how much money an employee makes, a benefits package is very important. When a company offers a benefits package to employees and their families, it is in the best interest of everyone involved, employees and the employers, to make sure that, not only are the best possible benefits are offered, but that the employee gets all the right information so he or she can make informed decisions.

At the time of open enrollment, the package you take will have an impact on you and your family immediately and for the long term so it may be a wise idea to take time to learn and understand all available options and if there is anything you don't fully understand, now is the time to ask questions.

It is important to know that each plan is different. Some may offer more coverage with higher costs while others may cost less while offering less options. When you first start a job, your employer will give you forms to fill out concerning, medical, vision, dental, life insurance, disability care, and if available, a 401k plan.

Health and dental plans are a must for everyone, especially employees with spouses and children. Medical costs are overwhelming to say the least. Without insurance, a doctors visit may cost in the hundreds of dollars and a hospital stay, for just a few days, may cost $30,000 to $40,000 or more. A long term stay may in a hospital may cost in the hundreds of thousands of dollars. So the right health insurance is critical.

Your choice between health care options are generally between a HMO (Health Maintenance Organization) and a PPO (Preferred Provider Option). The main difference between the two is that:

(1) An HMO allows you to see doctors that are contracted with specific insurance companies. This means that you may be able to keep your current doctor if he or she is on that particular plan.

(2) A PPO may have a contract with the insurance company or you may be able to see a doctor that is not on their list. If so, you may get partially covered services or you may have to pay more out of pocket expenses. Even so, there are fewer restrictions with a PPO.

Dental plans are great, especially if you've had problems with your teeth in the past. If you haven't had major dental issues, you may want to forego dental insurance and pay for your dental work out of pocket. In the short term, it may be cheaper but you must be careful because your teeth can develop cavities, cracks, gum disease, or other problems at any time. Dental insurance is good if you have a spouse and children. You may need to have a root canal performed which requires specialized surgery or you or your children may require braces, caps, or full or partial dental implants which are very expensive.

Vision coverage is also a good investments. Your eyes are very important to everything you do so it is prudent to keep them healthy by having vision checkups often. This is true even if you have 20/20 vision. Many people start developing problems with their eyes as they grow older.

Disability and Workers' Compensation Insurance is more important than you think. If you become disabled, you would receive a payout in place of income. This would be very beneficial in the event of a long term disability after sick days have been exhausted. Worker's Compensation Insurance covers work related injuries and must be provided by employers.

Life Insurance: Death is a hard pill to swallow, whether it happens without warning or is the result of a long term illness or age. A life insurance policy is crucial to making sure that your beneficiary is able to pay for your funeral expenses and then pay off outstanding bills and other debt. If you have a family, your life insurance policy should be based on the amount of money your surviving family members will need to live on in the event of your untimely death.

401k Plan: One of the biggest benefit options today is the 401k plan. You don't have to get involved in a company sponsored 401k plan, but it is one of the best investment vehicles that working people can get involved in for retirement. You are allowed to contribute up to a set maximum that changes from year to year. As an investment vehicle, you should invest as much from your income as you can afford by signing up for the highest percentage contribution option you are allowed. There are different funds that you can opt into such as mutual funds, target date funds, money market funds, or bond mutual funds.

Income Taxes: Although you can request to pay your own income taxes from your salary, most companies take taxes out of your paycheck for you. This is based on you filling out an IRS W-4 form than requires your name, Social Security number, and the allowances you want to claim. You are considered an allowance, your spouse is an allowance and each of your children count as an allowance. The more allowances you claim, the less the employer will take out of your check for taxes.

Benefits provided from company to company can vary depending on what is offered. The most common benefits are listed above but there may be others that you may be able to include such as employee discounts, elder care, pension plans, counseling programs, wellness, and other benefits.

It may be wise to find out when your benefits begin because some of them may not start immediately. And it is also important to find out what happens with your benefits if you quit your job or if you are laid off. It is also important to know how soon you can make changes to your benefits if you decide to.

The best way to insure that you put away a sizable nest egg for retirement is to start working on it at an early age. The more you invest early on, the larger the amount you will accumulate as time passes. Keep an eye on your benefits at all times and make changes when you feel they are necessary.

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