Benefits are a great tool for a company to attract candidates and retain employees but did you know that the majority of employees do not understand their benefits? In fact, up to 80% of companies report that their employees do not open or read benefits. So, how can we help? Below we discuss three tips to help you get the most out of your employees' benefits.
3 Tips To Get The Most Out Of Your Employee Benefits
1. Health insurance
Let's first talk about health insurance. There are a number of options for the health plan. Without digging into all the terminology, one of the easiest ways to use your medical plan is with tools like a Healthcare Flexible Spending Account (FSA) or a Health Savings Account (HSA). Both of these options have estimated savings that further stretch your money when you pay for medical, dental or vision expenses.
Benefits of the FSA
With an FSA for healthcare, the money is front-loaded as an advance payment and is repaid throughout the year to compensate for it. Think about if you had a child who needed braces. A typical dental care plan does not cover the costs of braces, so the FSA works as a payment plan, which makes it a little easier with payments spread out. One thing to remember is that an FSA is a "use or lose it" account. If you do not spend it, you will lose it.
Benefits of HSAs
If you have the opportunity to contribute to an HSA account, this money is always yours and it is triple tax free. This means that it is tax-free, grows tax-free and comes out tax-free. This account is a nice way to save on medical expenses that you may incur throughout the year, to save on future major medical expenses, or you may even save the money for retirement.
There are many benefits to both of these plans and they can make it easier to manage healthcare costs.
2. Retirement & Your 401
Are you thinking more about retirement, how do you save for it? Contributions to your 401 (k) pension fund are a great advantage; make sure you get the maximum employer contribution. These matching funds are free money! The more money you can put between yourself and your employer, the more money there is to grow in the years before retirement.
Check your retirement goals every year. Start by setting a goal for how much you want in retirement. Use a financial tool to help you decide how much you need to save each year to reach that goal. Talk to a financial professional about retirement options as they can provide more in-depth knowledge of how to save and can help you deal with ups and downs in the market along the way.
Remember that the more money you can save earlier in your career, the more money there is to grow each year. You may not think that contributing a few more dollars each year would make a difference, but you might be surprised at how just a few dollars can grow over a number of years. Also, if you start saving early, you will have less stress as you approach retirement.
3. Open Enrollment
If there is once a year to pay attention to your benefits, it is under open registration. Employers often make changes to their benefit plans due to things like government regulations, new tools that can help you save money, a carrier change with a better experience or a better benefit, etc.
Because of these changes, it is important to know which benefits are active. You must register with them (even if you had them before) to have them for next year. If you do not have a life event, such as a marriage or the birth of a child, you are stuck with the benefits you choose each year. If you do not have to register for something that you wanted or needed the following year, you are lucky for the next open registration. Think of it this way, if you have a major surgery coming up but you forgot to sign up with your HSA or FSA to get some of the benefits we talked about earlier, you will carry a sudden financial burden all at once.
On the back there may be opportunities you miss. If a company changes operator, they can have a one-time benefit for the first year with the company. For example, if there is a new carrier for life insurance, they can offer a one-time option for life insurance up to a certain amount without having to go through additional questions or tests. This can be a good opportunity for someone with an existing condition who was previously denied with their latest operator.
In fact, the benefits are constantly changing so the best thing to do during open registration is to know what is active so that you can either re-register or sign up for a plan for the first time. And if your business highlights a new advantage, it would be wise to get an idea of which potential offers may be most beneficial to you. As a minimum, you should always review your choices for next year so that you have exactly what you want or need.
Hopefully, these three tips will help you get the most out of your employees' benefits. Remember that employee benefits are an important part of your overall compensation package. Do not rush through the process of reviewing them.
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For more blog posts on relevant topics for your business read more of our HR blogs. Or contact a local community agent because your business is unique and so should your insurance!