Decoding Workplace Benefits

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Workplace benefits can add significant value to any position. 401(k) contributions, health insurance, and even paid-time-off can make many jobs more appealing, but what do they mean? Here are some benefits to consider before taking a job.

Retirement Plans

Companies offer retirement plans such as 401(k)s, which allows employees to make pre-tax contributions to a retirement savings account. Most companies have a certain contribution percentage they will match, meaning if you contribute 3% of your salary to your retirement fund, the company will match that 3%, bringing you to a grand total of 6% in your account. Generally, it takes up to five years for the company’s contribution to vest, which means that if you leave before the money vests, then they can take back their contributions, leaving you only with the funds you have personally contributed.

Health Insurance

Most employers present their teams with medical insurance plans and assist with healthcare costs. Usually, an employer subscribes to a plan and offers it to its employees at a discounted rate. Although plans will differ regarding the maximum out-of-pocket expenses an employee needs to be responsible for, there are many HMO and PPO plans to choose from. Dental insurance is also a great benefit, and like medical insurance, comes at a discount to the employee as well. There are various plan options though, so be sure to review coverage and co-pays before enrolling. If you’re expecting a serious treatment or surgery, like braces or wisdom tooth extraction, make sure the plan you choose covers some (or all) of the cost. If you wear glasses or contacts, having vision insurance can be beneficial as well. As one of the cheaper insurances, this is part of a comprehensive package that employers may offer.

Transit Allowances

Do employees commute to work every day? If so, you may want to ask about transit allowances. Some companies reimburse their employees for transit up to a certain amount or apply an allowance to the employee’s paycheck. Though it sounds small, the savings can be huge!

Disability and Life Insurance

Disability insurance serves as a replacement income if an employee is unable to perform their job due to illness or injury. While it is not commonly offered, some companies will offer short-term and long-term disability insurance to their employees to cover a percentage of the employee’s salary in the case of an accident or illness (if offered it is usually paid for by the employer). Life insurance is a common benefit for most companies, and are usually covered in full by the employer. There are, of course, options to increase the coverage, but the difference in amount comes out of the employee’s paycheck. This benefit is a great option to help your loved ones pay for burial expenses in the event of your death.

Paid Time Off

Whether you’re taking a vacation, or not feeling well, paid time off can be a great benefit. The standard for many companies includes 10 days of paid vacation and five days of paid sick time. For most companies, you accrue time as you work, meaning you’ll see a few hours added to your allowance every pay period. For others, you’ll receive the time in a lump sum that you will be responsible for managing throughout the year. Make sure to check with your potential or current employer about the paid time off policy. Regardless of where you work, benefits are a great addition to any position. 

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