So, you did it, huh? You’ve been offered a job. A good job. The kind of job you’ve always wanted; one that gives you the opportunity to explore your passions, refine your personal brand and expand your professional skill set.
Securing a great position is anything but easy. No, this step in your career journey was earned by hard work and through a series of interviews in which you eloquently communicated the value of hiring you over the field.
That said, although you’re excited to get started and know that this position will fit your skills well, analyzing a benefits package is something you’re less confident in doing.
Understanding each option available to you will help you match your employer-backed benefits to your lifestyle and needs — increasing the value you receive in exchange for the work you’ll do.
Here at Anderson Trucking Service (ATS), we offer employees a well-rounded benefits package with various options to select from. When the time comes for new hires to review this benefit package, it’s not uncommon for them to have questions about which items to opt for and which to forgo.
And, when it comes to making choices like this — choices that will impact your current and future quality of life — it’s important that you have all of the information necessary to do so.
In this article, we’ll outline and explain the most fundamental aspects of employee benefits packages and give you some insight into what to consider when compiling your own.
This process does not need to leave you feeling overwhelmed. Below, you’ll find all the information needed to make the most educated selection decisions possible.
This includes:
- What a benefits package is.
- What the main aspects of benefits packages are.
- What to consider when selecting and building your benefits package.
What is a Benefits Package?
A benefits package is a comprehensive collection of services that commonly include insurance, paid time off and other perks offered to an employee by their employer. As an employee, your benefits package is offered in addition to compensation and other less tangible rewards such as a company’s culture and employee recognition practices along with the growth and development opportunities afforded to employees.
Providing the option to pick and choose from a wide array of benefits gives employees control over many aspects of their overall compensation.
Balancing your benefits package selections with your total take-home pay is key to ensuring your individual needs are met. For this reason, it’s important you make educated, informed decisions when selecting yours.
Related Content: Salary vs. Hourly Pay Structures: an Overview of Exempt and Non-Exempt Compensation
The 6 Core Aspects of a Benefits Package
Although there is sometimes variety in benefit offerings between organizations — with things like “free book programs” landing far from the norm — most companies give employees a consistent list of options to select from.
Each of these core benefits — as we’ll call them — is meant to help people thrive and plan for the future. And, when managed properly, a great program of benefits helps employees get ahead, adding value far beyond what’s offered by a paycheck alone.
Here are the six most common categories of benefits companies offer employees:
- Health benefits
- Life insurance
- Disability insurance(s)
- Retirement programs
- Paid-time-off benefits
- Additional (optional/situational) benefits
1. Health Benefits
Health benefits and coverage programs are a staple piece of every benefits package. These insurances allow employees to maintain their physical and mental health by seeing doctors and medical specialists at a significantly reduced out-of-pocket cost.
In most cases, receiving health coverage through your employer is more affordable than paying for it outright. That said, depending on your situation, other affordable options may be available to you — options you’ll want to review before making a selection.
Additionally, many companies give employees the option to purchase coverage for additional members of their household. Though doing so will increase your monthly premium, choosing a more comprehensive plan — like one covering your whole family — might be worth considering.
Primarily, health benefits include:
- Medical insurance
- Dental insurance
- Vision insurance
Let’s explore what each of these means for the employees that opt for them.
#1: Medical Insurance
Medical insurance, also commonly referred to as health insurance, is offered to employees at a set cost per pay period. This fee, which may be taken out pre-tax (reducing your taxable income), will change based on the level of coverage you select.
The employer’s goal in offering medical insurance is to provide the best coverage and plan that meets the needs of the majority of employees.
There are different types of Health Insurance options an employer can offer employees. The most common are:
- High Deductible Health Plan (HDHP): Under this plan type, most covered services and prescriptions are subject to the deductible before the plan starts to pay for them. Typically, this plan is compatible with a Health Savings Account.
- Preferred Provider Organization (PPO): A very common type of health plan that specifies a network of providers where participants receive deeper discounts than they do when using out-of-network providers.
- Health Maintenance Organization (HMO): These plans typically offer participants a limited network of doctors to choose from. If an out-of-network doctor is used, you may have to pay the full bill yourself.
Understanding the common terms of health insurance will help you make an informed decision when reviewing your medical needs against the insurance offerings of your employer.
Common Health Insurance Terms:
Premium: The amount you pay (typically from your payroll check) for insurance coverage.
Co-Pay: The fixed dollar amount set by the plan that you pay out of pocket for a covered doctor visit or prescription.
Deductible: The fixed dollar amount you pay out of pocket for a covered health service before your insurance plan starts to pay.
Coinsurance: The amount (usually a percent) of the costs you pay for a covered health service after you met the deductible.
Out of Pocket Maximum: The maximum amount you will pay out of pocket for covered health services in the Plan Year. After you have paid this amount, covered services are typically paid by the plan at 100%.
Health Insurance can be difficult to understand. Knowing these key terms will help you understand your potential cost of insurance (e.g., premiums, co-pays, out-of-pocket expenses) allowing you to make an informed decision on what plan offering is best for your individual situation.
#2: Dental Insurance
The second form of health insurance workplaces often offer employees is meant to help them cover dental expenses. Similar to medical insurance, the dental coverage offered to employees is often very affordable — usually hovering between $5 and $20 per month. As a result, utilizing employer-sponsored dental coverage — the majority of which cover individuals for both routine cleanings and emergency procedures — can be a great benefit to opt for.
#3: Vision Insurance
Vision insurance is another common offering that falls under the health benefit umbrella. Just like your dental health, your ability to see is important — making regular vision check-ups unavoidable. In recognition of this, and appreciation for the work their employees do, most companies offer them comprehensive vision insurance.
Employer-provided vision insurance plans usually help workers cover the cost of routine eye exams and may assist them with the purchase of corrective lenses and eyewear.
When deciding whether employer-sponsored medical, dental and vision insurances will meet your needs, here are two questions to consider:
“Is my Doctor in the covered network?”
When selecting your health insurance option(s), reviewing the covered network of doctors and providers can be important. Although the majority of employer-sponsored health insurance programs cover large networks of health care providers and facilities, you’ll want to ensure yours or a comparable option is on the list.
#2 “What happens if I separate employment?”
Typically your health coverage will end with your employment. However, programs to continue these benefits post-separation are widely available (e.g. COBRA).
In addition to health benefits, employers often offer additional tax-advantaged programs that may assist in planning for your healthcare needs.
The most common forms of these programs are:
-
Health Savings Account (HSA)
HSAs are meant to help employees cover the health expenses (vision, dental, medical) that aren’t coved by their medical insurance. This includes things like drug prescriptions which can get really expensive when paid outright.
As a benefit to employees, many employers help them reach their yearly maximum contributions outlined by the IRS. Over time, as dollars grow — bolstered through investments made within the HSA — they can be withdrawn and used for medical expenses at any time, tax-free.
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Flexible Spending Accounts (FSA)
FSAs provide some of the same benefits as an HSA, however, contributions made to them are typically only good for the current Plan Year. Dollars left in these accounts if not used by the end of each Plan Year may be forfeited. For this reason, when making these decisions, it’s crucial that you understand each of them and plan accordingly.
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Premium Conversion (POP Plan)
Under this tax-savings benefit, employees avoid paying both Federal Income Tax and FICA taxes on the income amount used to pay health insurance premiums. In doing so, these employees reduce their overall taxable income, thereby raising their take-home pay.
2. Life Insurance
Life insurance benefits provide financial support and stability to your family or listed beneficiaries should you pass away. Most commonly, companies give their employees the option to enroll in “group” life insurance at various amounts.
Because group policies cover multiple people, employers can offer them at an attractive rate — typically providing a certain coverage amount at no charge to their employees. That said, many companies allow employees to opt for a larger policy by paying an increased percentage of their paycheck. Doing so allows these employees to double and sometimes triple the payout totals of smaller policies.
3. Disability Insurance(s)
Though it’s important to make your disability insurance selection with care — and in certain situations, the advantages of having this layer of protection can be vast — this benefit stumps a lot of new hires.
You see, employees are usually offered two types of disability insurance, each designed to help them in different scenarios.
The first is short-term disability insurance. As the name suggests, a short-term disability benefit compensates and assists employees temporarily in situations where — due to illness or disability — they’re unable to perform the functions of their job.
By opting for short-term disability, you’ll receive a percentage of your paycheck (usually around 60 percent) for a set period of time — typically 12 weeks. The money provided to you during your disability gives you financial protection while you are unable to work.
The second disability insurance option is long-term disability. Like short-term coverage, long-term disability insurance is a benefit to be utilized when injury, disability or illness prevents an employee from working. The partial wage replacement offered by long-term disability, however, offers far more staying power — usually kicking in when employees can’t work for 90 days or more.
Employees that opt for this coverage can receive partial wage compensation for years to come. As such, long-term disability insurance is highly valuable in situations where you won’t be able to work for a prolonged time period.
4. Retirement Benefits
Planning for retirement, for your life after work, is easier with a little help from an employer. A large portion of employers offer employees retirement programs through accounts like 401ks and 403bs (for educational institutions or non-profits).
Contributions to these accounts can be deducted from your paycheck pre-tax, lowering your taxable income, and/or on an after-tax basis into a Roth 401k account. Both of these options provide different advantages, with the same end goal: to help you build up retirement savings over time.
Whether you’re early or well into your career journey, it’s never too late to save. The earlier you start, the more time your money has to grow, providing more opportunity for you to have the type of future you desire.
Additionally, most companies match the retirement contributions their employees make up to a certain percentage of their salary/pay.
This “employer match” usually ranges between 3 and 6 percent, meaning if an employee earning 50,000/year contributes 6 percent of their pre-tax income ($3,000) to a 401k, an employer that matches this percentage would contribute the same — giving this employee an automatic 100 percent return on the employee’s “investment”.
That said, it is important to understand your company’s vesting schedule. Most companies set a holding period for this capital, a timeframe during which an employee becomes fully vested. Usually, tenure is used as a factor in determining each employee’s vested amount.
It should also be noted that the Internal Revenue Service sets contributions limits on retirement accounts like 401ks and 403bs. This number changes year over year and provides the opportunity to contribute an additional dollar amount once you have reached the age of 50.
5. Paid-Time-Off (PTO) Benefits
There are several ways for employers to allocate time-off benefits. Depending on the company you work for, you could have any number of avenues for taking time off, including, holidays, sick leave, flexible hours and vacation time.
Many organizations frame these time-off benefits simply as “paid time off (PTO)” which can be used for all occasions. With the option to carry balances from prior period(s) on to the next, most employees can build a reserve of time-off hours to be used at their discretion.
The number of hours you earn will depend on the policies of your employer and are usually tied to experience and tenure.
6. Additional (Optional) Benefits
Aside from disability, life, health, retirement and time-off benefits, there is a long list of optional benefits that an organization may offer you. These add-on benefits are not typically ones that would influence someone’s employment decision, but are instead simply considered “nice to have”.
Although these will range widely depending on the company you work for, some examples of additional employee benefits are:
- Profit-sharing, ESOP, company stock purchase programs
- Tuition reimbursement
- Health/wellness
- Relocation assistance
- Housing assistance
- Childcare help
- Flexible work arrangements
- Student loan repayment
- Volunteer programs
While this is by no means a comprehensive list, and your options will vary, every additional benefit your employer offers is meant to make your life easier — in some area or another.
The level to which you opt for these additional benefits is up to you and subject to program criteria.
If you have any questions about the optional benefits offered by your company, don’t hesitate to ask your recruiter/hiring manager. These individuals want you to fully understand your benefits package and options so that you can make the best decision possible.
What to Consider When Choosing Your Benefits
Now that you understand many of the things you’ll see listed as part of your new-hire benefits package, let’s talk about what you should consider when making these — potentially life-altering — choices.
When building your own benefits package, you’ll want to consider your financial, health and wellness needs. At the end of the day, only you understand these needs best. Even though each employer offers benefits packages in order to meet these needs, these elections are yours alone to make.
Today, ATS is proud to offer employees a set of competitive benefits to select from at their leisure. With an emphasis on employee satisfaction and health, our workers receive a comprehensive list of insurance and retirement options
If you’d like to learn more about the job openings we currently have available or have questions about what a career in transportation would mean for you, check out our careers page for more information!
