So you just got an amazing new job and you’re super excited about your position and your new workplace — and you just got handed a massive packet of information that describes your benefits. But how do you read your job benefits package?
In a word, carefully. Although it can be overwhelming to receive so much information upfront, you want to be clear on what your benefits package covers.
Luckily, I’ve been able to speak with my resident expert, aka my mom, to compile some tips for you on how to read your benefits package. She has worked in Human Resources around employee benefits for over 30 years, including most recently at the Jet Propulsion Laboratory. She’s seen it all when it comes to benefits package nightmares and confusion.
Use these helpful tips to read your benefits package. In addition, you can always ask someone in Human Resources to explain your coverage further if you have any questions.
Things to Consider
It’s best to look over a job benefits package before saying “yes” to a position. Your benefits package is a huge part of what makes working for a company worthwhile, so it’s best to know if it is worth it — in some cases companies or organizations will have lucrative benefits package to compensate for other shortcomings. For example, I have only worked at nonprofits throughout my career. Although I have been paid a low salary, I have never had to pay for health insurance as it has always been 100% covered. That is a huge benefit to consider!
My last position also covered monthly massages and enabled me to put my partner on my health insurance, although we aren’t married. You will want to look at all aspects of your benefits package to ensure your bases are covered — and more importantly you know what is covered. Some vital questions to ask:
- Is the package comprehensive? Does it provide coverage for medical, dental, life, disability, accident, retirement and time off?
- How long must you wait until you can enroll?
- How much will the coverage cost you? Are these premiums deducted with before tax dollars?
- Who can be covered under the plans? Wife and children? (Especially important to ask if you have a domestic partner!). What are the rates and rules for covering dependents. (And don’t be surprised if you’re asked for proof of dependent status as this is becoming the norm).
- For medical/dental and vision, find out where you seek care (this is important if you have a doctor you want to keep seeing – make sure he/she is part of the plan. It’s also important to find out where to go if you need urgent or emergency services).
- Many companies are now offering high deductible health plans that may seem intimidating. If this is a choice for you (or the only option) ask which services are covered even before meeting the high deductible. For example, preventive services are typically covered before you meet the deductible but prescriptions might not be (which means you’d pay the full cost of the drug). Finding out in advance will avoid financial surprises down the road.
- Know your deductible and co-pay costs.
- Make sure you inform your family (those covered) how the plans work.
- For time off benefits, ask for the specifics on how many days for each plan. If you are currently earning more vacation time than the new job offers to new hires, ask about obtaining additional time. Ask how time is earned (accrue or flat number of days at start of years); what is the maximum number of hours you can have in your bank and if and when the allotment increases. (Many companies have a schedule that increases with years of service).
- What kind of PTO (paid time off) do you have? Do you get sick days? Holidays? Is there a cap on PTO and if so, what is it?
- For retirement benefits, ask when you’ll be enrolled. Who contributes? Is it the company only or can you contribute? Is there a matching contribution?
- Don’t forget to ask about other benefits such as educational reimbursement or flexible spending accounts (where you can set aside pre-tax dollars for medical and child care expenses).
- Ask about any other amenities or services that are offered such as an on-site gym, credit union, cafeteria, etc.
If you are not changing jobs it’s still important to read and understand your benefits package every year during annual open enrollment. Important considerations are as follows:
- Are there any changes to your plans? If so, find out how they apply to your situation.
- What are the rates for the next year?
- Do I have to take action to keep my plans? (caution – FSA plans don’t roll over year to year so you need to re-enroll to keep these year to year).
- If I change my life insurance amount, does it require approval from the insurance company?
- What is the annual enrollment period and when are changes effective?
- Understand when you can change plans. Most often this is only annually unless you have a life event such as marriage or birth.
- Your employer should have written materials to help you. Health plans are required to produce Summary of Benefits Coverages and Coverage (SBC) available.
As you can see, there is a lot to think about when looking over your job benefits package. It’s important to carefully read each aspect of your benefits, and be clear on what is covered. Without doing so, you might find yourself in a bind, unprepared, or incurring an unwanted cost out of confusion.
Avoid any issues by talking to Human Resources, following up with your healthcare and medical benefit providers and making sure you understand what you are covered for. It’s also key to actually utilize your benefits too! So make sure you have a primary care physician and you have the doctor’s name, telephone and address somewhere handy. If you get free massages every month, use them! Whatever your job benefits may be, understand them fully, and utilize all that they offer.